Tuesday, April 11, 2006

The Stern Effect

April 11, 2006

The term “The Stern Effect” was coined somewhere along the line amongst the internet posting community, and seems to be a buzz word used by supports as well as detractors of Sirius Satellite Radio.

We have seen terms like “watch the sub numbers due to the Stern Effect” and “The Stern Effect is over.”

Well SSG thought it was time to take a look into the Stern Effect and some of the components that surround it.

Howard Stern did bring a large number of instant subscribers to Sirius. This influx of subscribers was expected by everyone, but is that the end of The Stern Effect????

Not Really.

The Stern effect is about Advertisers, Advertising, and Advertising Revenue. Howard Stern has had many companies that have participated in his show through advertisement. Those are now clients of Sirius. In fact, many advertisers that get air time on Sterns 48 hours worth of programming per day also buy ads on other Sirius Streams.

The Stern Effect is about Brand Awareness. The very fact that Howard Stern was coming to Sirius raised consumer awareness of Sirius substantially. This effect does not disappear. In fact, it grows.

The Stern effect is about Friends and Family. All of those “instant” subscribers are going to be word-of-mouth marketing for Sirius. This “free” marketing campaign is something that Sirius will benefit greatly from.

The Stern effect is about News. Stern is constantly promoting endeavors such as the Howard Stern Film Festival which debuts later this month.

The Stern Effect is about Recurring Subscriber Revenue. Subscribers who came to Sirius for Stern are quickly seeing the value in the whole service. These subscribers are likely to be long time subscribers that will continue to keep the service.

The Stern Effect is about Growing his brand, and thus Sirius into markets where he was not available on Terrestrial Radio. Large segments of the country did not get the Howard Stern show in the past. Now his show is everywhere. These are previously untapped markets for Stern.

In simple terms, The Stern Effect is many things, but it is far from being over.

The link to this write up is http://tinyurl.com/jwcxt

4/11/2006 03:48:00 PM

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