News Update Place

NEW YORK (Billboard) - The year is ending nearly two weeks too soon to catch the biggest radio news of the day: the debut of Howard Stern on Sirius Satellite Radio.

In the year-plus since Stern announced his upcoming departure from terrestrial radio, the battle lines have been drawn. He has lambasted traditional radio, Clear Channel, the Federal Communications Commission and even his bosses at Viacom-owned Infinity.

In October, Infinity CEO Joel Hollander unveiled his post-Stern strategy, announcing a new talk-based format — “Free FM” — for Stern flagship WXRK New York and stations in Los Angeles, San Francisco, Philadelphia, San Diego and Baltimore. As for the morning vacancy, Van Halen veteran David Lee Roth will cover Eastern stations, “Loveline” co-host Adam Carolla will take the shift on the West Coast and Ohio DJ Rover will pick up stations in the Midwest.

The Stern publicity machine cranked into high gear this month, with the man in high profile on CBS (”60 Minutes”), NBC (”Today”), Newsweek and the cover of New York magazine.

His move is arguably the make-or-break moment for Sirius. The company predicts it will have 3 million subscribers by the time Stern hits the air on January 9. Rival XM expects to have twice that.

If January holds satellite’s D-Day, then terrestrial radio took the covers off its beach-head armaments on December 6. That is when eight major broadcasters came together to announce their strategy to turn high-definition radio (terrestrial’s digital initiative) from a neat idea to a practical reality.

These companies seek to challenge satellite on the digital sound and programing variety fronts. Variety will be achieved by splitting up the digital signal on a frequency to allow multicasting. The mandate is for those “side channels” to contain programing not already found at mainstream radio.

Speaking December 7 at the UBS Warburg Global Media Conference in New York, Emmis Broadcasting president/CEO Jeff Smulyan admitted that radio has “been very stale . . . we’ve over-researched ourselves.”

But satellite is not the only competition for terrestrial radio. The success of Apple Computer’s iPod and the podcasting phenomenon that followed have worked to make everyone a radio programer and inspired the likes of NPR and Infinity to release podcasts of their own. The latter also took a San Francisco AM and crowned it the first all-podcast radio station.

The shuffle function of the iPod was equally inspiring to radio. Stations that had switched to the format du jour, Jack, touted it as the radio version of an iPod on shuffle. Jack became the new format by not having a format. The listener never knew who the next act would be (K.C. & the Sunshine Band into Nirvana was fair game) but would surely like it.

According to Billboard Radio Monitor research, 12 out of 18 top 60 market stations that flipped to Jack between summer 2004 and summer 2005 have improved their 25-49 ratings.

Almost as surprising as the Jack uptake is the amount of money that stations are investing in marketing the format. Infinity had Jack advertising on nearly every bus in New York.

Latin formats were another big format-flip target. By the time the summer ratings came out, a baker’s dozen of stations in the top 25 markets had flipped to Spanish-language programing. Ten had ratings increases.

Still gathering clouds over radio is the investigation by New York Attorney General Eliot Spitzer, whose office this year struck multimillion-dollar settlements with Sony BMG and Warner Music Group over pay-for-play tactics. The other players in these transactions have been radio stations, and the FCC is taking notice. Democratic commissioner Jonathan Adelstein released a statement late last month that said his agency has concerns regarding Spitzer’s findings.

With all of these pressures, the business of radio is no longer a stock market favorite. To combat that, traditional radio is aggressively investing in itself.

This newfound desire of the medium to put its money where its mouth is best-summarized by Greater Media president/CEO Peter Smyth, who told Billboard early this fall: “We (had) pulled away all of those marketing dollars and thrown them to Wall Street . . . Then Wall Street turns around, kicks us in the teeth and says, ‘Radio’s not cool.’ It’s not cool because we’re not investing in making it cool.”

Reuters/Billboard