Hollander said the upside is that many radio advertisers were turned off to Stern's controversial nature. "We absolutely believe there is an opportunity in this other bucket of advertisers," Hollander asserted.
Stern's contract with Infinity expires Dec. 16, after which he will launch a new show on satellite radio network Sirius. The Infinity slot, which currently broadcasts on 27 stations, will feature a regional mix of personalities, including: Former Van Halen frontman David Lee Roth and comedian Adam Carolla as the new morning drive hosts on the East Coast and West Coast, respectively.
"We want to be judged over a 12- to-24-month time period," Hollander said of the new replacement strategy. He noted that Stern's show benefited from 20-year brand awareness, and that it will take time for the new lineup to catch on with listeners and advertisers.
"The Howard Stern Show" accounts for $100 million in revenue for the Viacom subsidiary each year, and about 6 million listeners. Last fall, Stern was lured to satellite radio provider Sirius by a five-year $500 million deal.
One source familiar with the matter doesn't think Infinity will be able to retain many of Stern's former advertisers--not because Stern's replacements are no good, but because radio lacks the measurement protocol clients demand from their agencies when making a high-risk buy. "These new personalities don't really have track records on morning radio," the source noted. "Even when the first book comes out in May, they won't know how good or bad [these programs are] because [advertisers] will still only have reporting for one quarter."
Many industry pundits have long proclaimed that broadcast radio's system of reporting ratings--conducted each quarter by Arbitron, Inc. through a survey of user-diaries--is outdated, especially in a world where online media companies can report results for advertisers in real-time.
In line with the Stern replacement strategy, Infinity's stations have been rebranded "Free FM"; the rebranding campaign was launched yesterday in certain markets and is to be accompanied by marketing efforts in traditional, out-of-home, and Internet media.
David Lee Roth will be broadcast in New York, Philadelphia, Boston, and West Palm Beach, as well as Dallas, Cleveland, and Pittsburgh. His show premieres in January. Carolla will be heard in L.A., San Diego, San Francisco, Portland, Phoenix, and Las Vegas. Morning show host Rover--who is currently heard in the Cleveland and Columbus markets--now adds Infinity stations in Chicago, Detroit, Cincinnati, Memphis, and Rochester as a result of Stern's departure.