October 25, 2004
By Eric Hellweg
CNN/Money contributing columnist

Boston - The satellite radio business has been cranking up the volume these
past few weeks.

Sirius Satellite Radio struck first with its hiring of Howard Stern. That
announcement pushed Sirius's stock up more than 15 percent. The stock has
since settled back down a bit. Then last week the company's much larger
rival, XM Satellite Radio, struck back: It announced that it would broadcast
Major League Baseball games.

(snip) The Wall Street Journal reported that XM paid several times Sirius's
offer for MLB rights. (Sirius earlier paid $220 million for rights to
broadcast National Football League games.)

(snip) A funny anecdote leads us in: I went to the Patriots game a week ago
(trying to distract myself from the Red Sox being down 3-0 to the Yankees at
that point) with a friend who is a Sirius subscriber. During a break in the
action, an advertisement for Sirius radio came over the loudspeakers, and my
friend -- apropos of nothing more than perhaps the beer in his belly and the
Pats doing well -- decided to stand up and scream "I have Sirius and I love
it!" He was immediately approached not by security but by people who asked
about the service and wondered if it was worth the $12.95 per month.

Why is this incident telling? Because despite being around for several
years, satellite radio has only recently jumped into the public
consciousness, mostly because of the Howard Stern announcement.

Love him or hate him, Stern is a radio powerhouse. In this relatively early
stage in the satellite radio war, strong content plus promotion works. That
can go a long way toward helping Sirius close the gap between its 700,000
subscribers and XM's 2.1 million.

Sirius is already seeing a strong boost as a result of the Stern
announcement, but this will pale in comparison with the number of consumers
who will sign up for Sirius once Stern leaves analog radio in December 2005.

Granted, Sirius is paying a lot to secure Stern, and when a company starts
to justify a move by claiming that it needs to sway only 10 percent of
Stern's listeners to pay for the deal, it's worrisome. That's fuzzy math.

But Sirius could make back Stern's salary if he brings in 200,000 additional
subscribers each year. And with a marquee name like Stern's, the
self-proclaimed "king of all media" just may make it work.

(see CNN/Money
http://money.cnn.com/2004/10/25/tech...estor/hellweg/ for the
full article)