Does Howard Stern Want a Bite Out of Apple?

Last week Sirius XM (SIRI) finally launched an app for the iPhone and iPod Touch. The app made big news in a couple of ways. First, the fact that Howard Stern was not available on the app was the major attention getter. The other newsworthy item is that despite Stern’s absence, the app has enjoyed a huge number of downloads, and quickly became one of the most popular apps to hit the market.

With all of the excitement, news, and reviews, there is still one question on the minds of many. Why isn’t Howard Stern available? Speculation ran wild, and calls to Sirius XM were met with an overall silence with regard to the issue. Some felt that Sirius XM was holding back, others felt that there was a potential worry about bandwidth on AT&T’s (T) network, and still others thought the issue may revolve around Stern wanting more money.

While any official confirmation has not been made, there are several indicators that would point to the fact that Stern is a central part in this issue.

1. The general lack of discussion of any kind regarding the app coming from the Howard Stern Show.

2. Indicators on Gary Dell’Abate’s Twitter page that indicate possible rights issues. Note, the page appears to be Dell’abate’s, but verification could not be made prior to publishing.

3. Sirius XM taking on a virtual silence, which would indicate that the issue is in some form of negotiation.

It would appear that the Stern contract, which likely has many stipulations, must have some clause dealing with “mobile media”, and the potential of third party operations. In short, there are various aspects of the app that may trigger a “no-go” for Stern inclusion unless the parties sit down at the table and negotiate. Such possibilities include, conflicts with In-Demand, mobile media exclusions and inclusions, or perhaps even something specific to Apple (AAPL).

Now, before everyone starts talking about all of the money Stern already has, and labeling him as money hungry (which he actually is), we need to step back and understand the dynamics at play. If Stern, or his agent, was smart enough to see the potential moving forward, then I take my hat off to them. However, in this case, it is quite possible that Stern is biting the hand that feeds him, and his actions have squandered the possible exposure associated with the launch of the iPhone app.

To be fair to Stern, there is no way to know exactly where things stand. His possible demands could be very simple and doable, and if that is the case, shame on Sirius XM. Karmazin is known as a cost cutter, and perhaps the parties simply came to an impasse as time ran out for the launch of the app. The launch date would have been the leverage Stern had, and with that now gone, perhaps more realistic negotiations can happen moving forward.

Sirius XM can never recoup the lost exposure they would have had if Stern was part of the app. Let’s hope that the financial decision made was worth it, and the parties can hammer out the details moving forward.

Position: Long Sirius XM, No Position Apple.

Comments

[zorro6204:]

Forget about Stern, he takes every Friday off and every week he thinks he can get away. It's quite obvious money (and age) have removed any passion he had for doing radio, and he's just playing out the contract. I don't think he cares about the app, because he doesn't care about Sirius.

Jun 23 04:34 AM

[VMx:]

They did talk about it on the show. Yesterday.

Jun 23 09:04 AM

[DjVariance:]

The app took off because it offers a free trial, too early to see if that translates to new subscribers.

Jun 23 09:06 AM

[vassar:]

I can't understand the attraction to Stern. But then, I don't like professional wrestling, dog fighting and the various TV news entertainers like O'Rielly, Hannity, Obermain, Matthews et. al. either.

Jun 23 09:12 AM

[vassar:]

PS: Who needs Sirius/XM when you have Pandora and NPR on the iPhone for free?

Jun 23 09:12 AM

[R A F:]

That's like saying who needs premium cable on your TV when you can get CSpan for free.

Jun 23 09:18 AM

[vassar:]

I actually like CSpan better than most of the garbage on 'Premium' Cable.

Likewise, I prefer WSJ, Public TV and NPR to Stern, Limbaugh and the other talking heads.

On Jun 23 09:18 AM R A F wrote:

> That's like saying who needs premium cable on your TV when you can get CSpan for free.

Jun 23 09:41 AM

[107Sid:]

Are there realy a signiifcnat number of people who care if Howard Stern is available vis app?

Jun 23 10:15 AM

[peter02l:]

And Beck!

Actually ever since he went exclusive on sat radio, I have had a little more peace in my life. It was aggravating to hear his voice and his sidekicks laughing in the background when you stepped into a room with the radio tuned to his channel.

He is nothing but noise pollution. And a huge drain to Sirius.


On Jun 23 09:12 AM vassar wrote:

> I can't understand the attraction to Stern. But then, I don't like
> professional wrestling, dog fighting and the various TV news entertainers
> like O'Rielly, Hannity, Obermain, Matthews et. al. either.

Jun 23 10:22 AM

[jmsithy:]

this stock will be at .40 easy by Friday / the news is settling in that Sirius is here to stay

Jun 23 10:25 AM

[R A F:]

FYI: Barrington Research has upgraded SIRI today, to outperform from market perform and has assigned a stock price target of 70 cents. This was also just mentioned on Barron's Online.

Jun 23 11:28 AM

[brewer:]

>>there is still one question on the minds of many. Why isn’t Howard Stern available?

I think the real question most people have is why does Howard Stern still have a radio show?

Jun 23 12:32 PM