Satellite Radio and Howard Stern

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Satellite Radio: Will Howard Stern's move make us change the way we think about radio? Howard Stern's plan to move to satellite radio in January 2006 marks a major turning point for the radio industry. Not only has Stern brought the  possibility of subscribing to satellite radio into the minds of the millions in his audience, he has also gotten more people to start thinking and talking about what really distinguishes satellite radio from traditional radio. Satellite radio was first authorized by the Federal Communication Commission (FCC) in 1997, seven years after initial applications. The delay in approval was in part the result of protests by the National Association of Broadcasters which charged that the service threatened "traditional American values of community cohesion and local identity." Ironically, as these charges were being made, traditional radio was becoming nationalized through use of more national programming and industry  consolidation under Clear Channel Communications and Infinity Broadcasting.  The FCC dealt with these issues by restricting satellite radio to only national programming. Essentially this rule minimizes competition with traditional radio stations that only reach local markets and get the majority of their revenue from local advertisers. Despite there currently being very few small, independent, local broadcasters to protect, this remains the most significant regulation on satellite radio.[1] Today there are two main players in the satellite radio business: Sirius and XM. Though Sirius signed Stern, XM is currently the leader in terms of  subscribers. Both companies have neared bankruptcy at various points in their short history, and both have yet to make a profit. By signing Stern for $500 million over five years, Sirius must gain at least one million subscribers to pay this commitment.[2] Clearly satellite radio has a long way to go, but with steady growth and high-profile contracts (not only with  radio personalities, but with car companies who now install satellite radio  equipment in all new cars), the future remains wide open. Satellite radio is subscription-based, commercial-free, and largely unregulated. This last point appears to be the main draw for Stern. Since  the infamous Super Bowl incident this year, there have been calls for significantly expanding FCC indecency re... ... middle of paper ... ...quot; due to his success with radio, books, television, and movies, but whether his kingdom will extend to satellite radio is yet to be seen. Free  speech is one of the key rights Americans have, but this right has always been in some degree of conflict with decency laws. The progressively stringent restrictions on the content of traditional radio have gotten so extreme in the past few years that, perhaps, finally they have gone too far. Listeners will soon wake up to the reality that what they want to hear in the morning has moved and in order to maintain their rights they must move too. If this is the case and audiences truly value "free listening," satellite radio will mark the end of traditional radio as we know it. [1] http://slate.msn.com/id/2097247/ [2] http://money.cnn.com/2004/10/06/news/newsmakers/stern sirius/ [3] see [2] [4] http://www.forbes.com/feeds/ap/2004/10/06/ap1578735.html [5] http://www.forbes.com/business/2004/10/06/cx sw 1006stern.html?partner=rss [6] Telecommunications Act of 1996 § 507 [7] Being commercial-free and having a wider selection of programming in many areas are also deemed to be significant advantages of satellite radio.
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