• by Tom Hespos , October 11, 2004

Last week, Howard Stern announced his departure from terrestrial radio, signing a deal with Sirius satellite radio to move his show to the fledgling medium. The reactions I've seen from people in the media business range from "This could change everything" to "So what?"

Personally, I have no doubt that this is exactly the kind of deal a company like Sirius needed in order to build critical mass. With 600,000 subscribers, Sirius needs an incremental 1 million subscribers to pay for the Stern deal. While this might seem like a lot, it requires only a small fraction of Stern's dedicated fan base to sign up for Sirius. I think the deal will either make or break Sirius, and I hope it accelerates consumer migration to satellite.

I also think this is a significant milestone for emerging media in general. Radio seems ready to shrug off its bandwidth constraints, as television did with the advent of cable (and, to a lesser extent, Internet broadcasting). In other words, whereas radio was limited somewhat by the constraints of terrestrial broadcasting - namely, limited bandwidth within each DMA - it is now taking steps into a world where the range of available content isn't limited by the availability of bandwidth.

As with streaming video, online radio has made somewhat of an impact, but it's still developing. Years after Broadcast.com was bought by Yahoo!, online radio is taking the next steps in its development. Specialty programming abounds, and companies like Ronning-Lipset Radio are aggregating these audiences for advertisers.

Permit, if you will, a glance into radio's future with satellite. Currently, the market is dominated by two players, Sirius and XM. But what happens if and when satellite bandwidth is made available to the general public? This can happen in several ways. Satellite companies like Sirius and XM could start leasing feeds, or a new entrant into the field could do the same. Satellite radio could then mirror the Web in terms of the breadth of its content offering.

Perhaps the club DJ who stuns audiences with his remixes on Saturday night and runs his own Internet radio station on the weekdays could achieve nationwide or global exposure via satellite. So, too, could the folks who run talk radio shows out of their basement studios.

Yes, radio could be well on its way to getting rid of the bandwidth constraints that hampered terrestrial radio. And when it's time to aggregate and advertise to the niche audiences that result, who will answer that challenge? Take a look in the mirror, online media planners.