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from Drudge:
Karmazin would rather have Hannity, instead of Stern

http://channels.netscape.com/ns/news/story.jsp?id=2005030221190002219939&dt=20050302211900&w=RTR&coview=


Karmazin Bullish About Stern's Advertiser Appeal

LOS ANGELES (Hollywood Reporter) - Radio shock-jock Howard Stern, whose daily show is too racy for many blue-chip sponsors, will usher in a new era of national radio advertising once he begins his new gig at Sirius Satellite Radio in January, the company's CEO Mel Karmazin said Wednesday.

He told a gathering of Wall Street analysts in Florida that Sirius might run various local feeds of Stern's show in such cities as Los Angeles and New York, whereby local weather and contests might be featured, in order to lure local advertisers.

The emphasis, though, will be on beefing up the national advertising model. With Stern, "We really jump-start our advertising business," Karmazin said at brokerage Bear Stearns 18th Annual Media Conference.

Karmazin, who used to be Stern's boss at Viacom Inc., took the reins at Sirius in November -- shortly after Stern announced he would move to satellite in January under a $500 million, five-year deal.


Karmazin hinted that the days of striking fantastically expensive content deals might be numbered at Sirius, which will spend in the neighborhood of $1 billion for rights to stream Stern, the NFL, NASCAR and other entities.


"Cost is something I have historically had a reputation for focusing on, and you should assume the reputation is accurate," Karmazin said. He added that Sirius is "going to pay a market rate for content," just as Viacom's CBS did when lining up David Letterman, the NFL and NCAA basketball.


He also hinted that Sirius might pursue exclusive deals with individual NFL teams, shutting out terrestrial radio entirely from broadcasting certain games and opening up more local advertising to Sirius.


His focus on advertising, though, didn't deter him from chastising traditional radio for airing ads on their music stations. Both Sirius and XM Satellite Radio boast commercial-free music channels.


Clear Channel Communications, for example, cannot effectively compete with satellite radio simply by stressing 15%-20% less commercial time each programing hour, as they have been. And the company's slow growth will restrict its ability to innovate.


When one Wall Street analyst called on Karmazin to defend his position that satellite radio didn't pose much of a threat to traditional radio -- an opinion he espoused as president and chief operating officer at Viacom -- Karmazin cited several factors for his change of heart, including deals struck between satellite radio and every major automobile manufacturer, the Sirius deals with the NFL and Stern and a 95% customer satisfaction rate.


"I was converted," he said. "The argument is, if I can be converted, anybody can."


Karmazin also said he would have liked to pursue Sean Hannity as well if the politically conservative radio and TV host weren't otherwise engaged.

"I'm a huge, huge Sean Hannity fan," Karmazin "If Sean Hannity weren't committed to ABC, as he is for a long time, and he were available exclusively in satellite radio, we would be interested in him."

Hannity recently agreed to keep his radio show at ABC for another five years for a reported $25 million, a figure that pales next to Stern's $500 million. In their gigs with traditional radio, though, Hannity commands a larger audience, about 12.5 million listeners per week compared with Stern's 8.5 million, according to the most recent data from "Talkers" magazine. Both trail No. 1 talker Rush Limbaugh at 14.5 million weekly.


Reuters/Hollywood Reporter

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