Jan 1, 2006 12:00 PM

The Howard Stern Factor

XM rules satellite radio: It has 5 million subéscribers, double that of rival Sirius. But it doesn’t have Howard Stern. The self-styled king of all media can attract as many as 6 million listeners a week, and Sirius has committed more than $620émillion to bringing him and other marquee talent aboard to build its audience. […]

XM rules satellite radio: It has 5 million subéscribers, double that of rival Sirius. But it doesn't have Howard Stern. The self-styled king of all media can attract as many as 6 million listeners a week, and Sirius has committed more than $620émillion to bringing him and other marquee talent aboard to build its audience. This month, Stern takes his foul mouth to Sirius. We asked XM boss Hugh Panero whether he's worried.

WIRED: Howard goes live January 9. Will that date live in infamy at XM?
PANERO: It's going to bring a lot of publicity to satellite radio, and the cost associated with that will be passed on to my competitor, who's paying half a billion dollars for a risky fixed-content deal.

Still, Howard Stern, Martha Stewart, a channel produced by Eminem - has Sirius cornered the market on big-name talent?
We've got Ellen Degeneres, Snoop Dogg, Tyra Banks, Al Franken, and Bob Edwards, along with Major League Baseball and the NHL. But you have to balance programming, technology, and distribution. You need radios that are attractive and affordable; we've won awards for ours. And we have deals to factory-install them with GM, Honda, Toyota, Hyundai, and Nissan.

Competition with Sirius jacks up the cost of every deal either of you make. Could that strangle this industry while it's still in the cradle?
Competition is good: Sirius has made us better, and we've made them better.

People would go nuts if Jon Stewart were only on Comcast or if you had to pick Cablevision to get HBO. Why should we have to choose?
People aren't going crazy about that - it happens every day. You have to make a choice between getting EchoStar or DirecTV, and they offer different content.

Cable started out commercial free. Once satellite radio is established, are you going to sell us out to Madison Avenue?
We have always sold advertising on our talk channels, but our music channels will remain commercial free. People subscribe to us because they're tired of getting 18 minutes an hour of advertising on traditional radio.

- Lucas Graves

XM Satellite Radio CEO Hugh Panero