More woes for radio than Stern

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When Howard Stern announced his plans to bolt from FM to the FCC-free zone of satellite radio last fall, it was portrayed by the press as the first ripple in a sea change. Mr. Stern's employer as of next January, Sirius Satellite Radio, called it "the most important deal in radio history."

Others took up that hyperbolic tone with dozens of reports sounding a death knell for terrestrial radio and predicting that waves of talent and subscribers would defect to the largely commercial-free and wholly unregulated environs of satellite.

"Probably the ideal thing would be to find somebody with some star power" such as a rock star," says David Lange, VP-rock, McVay Media, which owns a number of radio stations. "Part of the problem is that every place we've had to replace a big morning show, the next morning show almost always" disappoints, he says. "It's tough to follow someone like Stern and keep the same audience. These shows don't rely on a plot where you just plug in a replacement when someone's retiring. I don't know that you can do that in radio. Too much of the performance is relying upon Howard."

Still, Mark Fratrik, VP at BIA Financial Network, and other analysts say it would be wrongheaded to view the fate of FM as resting on one figure, even one as popular as Mr. Stern, who reaches about 15 million listeners a day with his program. "Satellite is not the only threat, and right now it may not even be the most important threat," says Mr. Fratrik, citing clutter, as well as poor audio quality and often-homogeneous content as other culprits.

Regardless of how many subscribers XM and Sirius pick up because of deals with Mr. Stern or with the National Football League or Major League Baseball, the total number of satellite users, 4.3 million, is dwarfed by terrestrial's audience, about 94 million per week, according to Arbitron.

Nevertheless, the terrestrial radio industry in general and Infinity Broadcasting Corp. have to fill the void among the young male demographics that make up the bulk of Mr. Stern's listener base. Infinity has so far been quiet on the matter of a successor, leaving observers to speculate. Most agree that Infinity's new CEO, Joel Hollander, will have a great deal of flexibility, likely able to offer a networkwide replacement with individual markets having the option to adopt or go with a local solution.

"If they're trying to fill the void of the audience Howard had, they're going to have to go edgy," says Sue Johenning, exec VP-director of local broadcast at Interpublic Group of Cos' Initiative.

Ms. Johenning doubts Mr. Stern's exit means that Infinity will skew more tasteful to reap advertisers afraid of his crass humor. "His inventory is selling. Howard moves product."

Despite the cards that it does hold, terrestrial has been playing defense of late against the PR onslaught of Sirius and XM. Companies like Clear Channel Radio, Infinity and Entercom Communications recently launched an ad campaign from independent agency DeVito/Verdi, New York, with the tagline "Radio-you hear it here first." The 30-second commercials feature musicians like Alicia Keys promoting local radio.

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