>>>>>>>>>>Both sports plays were way over paid for - There are very few who will listen and almost none will be motivated enough to buy either brand for this reason.
I think MLB has much greater potential than NFL. However, XM's hand was forced and they really had no choice in the matter. XM's strategy obviously would have been to wait until the subscriber numbers were higher, thus justifying the cost. That's said, XM is in a much better position to handle the fixed cost of MLB than Sirius is to handle the cost of NFL, just due to XM's subscriber lead.
MLB has much greater radio appeal than does NFL. Thus, I much prefer the MLB deal over SIRI's NFL deal. The fundamental difference is that when people want to "pay attention" to a game, they will consistently choose TV for NFL, but many are just as happy (or moreso) with radio for MLB. It is easier to follow a MLB game while you get 3 hours worth of work done than it is to follow an NFL game while you work. The action in the MLB game is slower and that makes it much more susceptable to listening, I believe.
That said, you totally overestimate the effect of Stern. Stern WILL NOT bring "several million" listeners. He has a weekly listenership of something like 12M. A small fraction of those will pay to hear him -- 10%, 15% if they're lucky. There is a huge difference between getting it for free and having to pay for it. And most of those aren't going to jump at once. My guess is Sirius will receive a Q4'05 pop of 250K subs. There *ARE* some people who will pay for his brand of sophomoric humor, but those numbers may be surprisingly low.
The Stern deal was, IMO, stupid and desperate. If nothing else, it is lunacy to put that kind of dough into ONE PERSONALITY -- a huge risk. At any point, Stern is one slip of the tongue from obscurity. XM's approach of putting O&A on a premium channel at least insulates them from the problems of O&A saying something stupid.
Just as importantly, it was a mistake because they've committed this half billion to Stern beginning 15 months from now, when the entire picture may be different. XM will have had "shock jocks" for the entire period. Stern will be another 15 months older and frankly, there is some doubt about how long people are going to listen to this mid-50s guy telling fart jokes. The public is fickle about these things. Sirius has bet the company on a personality who may, 15 months hence, not have the same following he does even today.
Sirius just found itself in desperate circumstances and had to do whatever it could to try and get subscribers. So, they spent close to a billion on content, and surely, it will get them some customers. XM spent a ton of money on the GM deal for the same reason.
The industry has been injured badly by SIRI's ridiculous expenditure for Stern. I have a feeling they're going to have their head handed to them, though. |
