Satellite radio gets attention of listeners and DJs

Though the Janet Jackson reveal-all happened almost a year ago, its repercussions are still being felt today. The FCC’s reactive crackdown has slowly spread from TV to radio. Now the FCC is removing shock jocks—DJs known for their outrageous topics, outlandish interviews and gratuitous use of obscene language—from the public radio airwaves. Among other demands, there have been calls to raise fines for indecent programming from the current $27,500 per violation to as much as $500,000.

DJs are already feeling the heat. Just ask Howard Stern, the most infamous shock jock of them all, whose show was recently pulled off all stations owned by the country’s number one radio operator, Clear Channel Communications. Similarly, The Opie and Anthony Show was dumped after the DJs broadcast descriptions of listeners having sex in public places.

Instead of bearing with the current situation, Howard Stern and Opie and Anthony have forged a new strategy and have switched their shows over to satellite radio. Stern announced last month that he signed a five year, $500 million contract with Sirius Satellite Radio, while Opie and Anthony launched their new show on XM Satellite Radio on October 4.

Satellite radio is being hailed by many as the future of a dying form of mass communication. Satellite radio is akin to cable TV in that, like cable, you must pay extra for the service. (Currently Sirius costs $12.95 a month, while XM costs $9.99 a month, plus an extra $1.99 for The Opie and Anthony Show). Also like cable, satellite radio is largely free from the FCC regulations that dominate the public airwaves. As these regulations become more stringently enforced, the jump to satellite radio has become more attractive to those who refuse to modify their often scandalous commentaries.

If enough personalities decide to make the jump, the results could be disastrous for commercial radio. Shock jock shows are some of the most lucrative programs for radio stations. Stern’s show is currently estimated by analysts to bring in as much as $25 million a year in profits for Infinity Broadcasting.

Yet while the threat looms large, commercial radio need not fear becoming obsolete just yet. Both Sirius and XM have yet to show a profit, with XM losing $584.5 million and Sirius losing $226.2 million in 2003, according to Forbes magazine.

Both companies have announced several times that they expected to lose money for the first few years as satellite radio begins to acquire an audience. And slowly it has.

After three years, XM has attracted more than 2 million subscribers, while Sirius, which started a year later, recently passed the 700,000 mark. With Ford, Lincoln and Mercury now offering Sirius as part of a dealer-installed option on nine car models—and up to 24 more models in the next two years—the number of subscribers stands to increase exponentially.