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Since October 6, 2004 Howard Stern announced (Howard Stern) signed a contract for up to 5 years, Sirius Satellite Radio (Sirius Satellite Radio) added nearly 270 million users, and for satellite broadcasting a household name. Howard Stern's contract price: nearly 7 million.Stern worth the price tag it? It depends on who you ask the. Sirius CEO of the U.S. Mallorca Palma Jin (Mel Karmazin) and who is Stern in the infinite Broadcasting Corporation (Infinity Broadcasting) and Viacom (Viacom) immediate supervisor, in June 2004 after the resignation of 11 joined Sirius. He said the prime sign to shock the world famous radio speech, "Kanye" is a wonderful investment. Karmazin last fall in CNBC's "Mad Money" program, said: "Howard deserved to win this price, there is no doubt. In fact, if he now wants to renegotiate, he can get more money, because [sales] did very sure. "Others on this point can not be so sure. Wharton marketing professor Bidefeide (Peter Fader) pointed out that Sirius signed Stern can not even with the current 3.3 million users. Wharton accounting professor Wayne Guay and compensation specialists (Wayne Guay) that Stern's pay is a simple supply and demand functions. He said: "In this industry, almost no one can bring such a large user base." Wharton marketing professor Zhu (Jagmohan Raju), said Sirius who bet on Stern , is "a reasonable gamble." The Business School, another marketing professor David Bell (David Bell) that Stern can deliver a consumer "eva


ngelism" (consumer evangelism), to make Sirius a permanent brand.Bell said: "Although this is a bit of Sirius element of gambling, but Stern had earlier in his radio program manipulation Sinai Pu (Snapple) like the brand to become the center of attention. He has a group of iron audience, they will advertise around the Sirius. "Although Stern's story will ultimately determine how to start too early - The Radio People on 9 January 2006 launched the first time in Sirius - but you can be seen from several key issues that clues. A few months later at the launch, Stern effect will exist? Sirius and XM can narrow their gap between satellite radio companies? The latter have been the end of 2005 more than 600 million users. Sirius because of Stern's program and for the National Football League broadcasting rights battle to create a powerful company can do to help the company end up more users than XM?No matter how this is staged legendary Stern's price tag will not be low. Banc of America Securities (Banc of America Securities) analyst Jonathan Jacoby (Jonathan Jacoby) estimates that the total contract price Stern true, including non-cash compensation, is around 6.7 billion U.S. dollars. Stern and his agent (Don Buchwald) to obtain copies of the company's 34 million shares. Stern to join the Einstein and the new subscribers than expected last month, the current value of these shares have been up to 2 billion dollars. Fader found it difficult to justify the high price obtained for the Stern. Although you can make up some measure of proof of the reasonableness of the price, but Stern's loyal supporters will have to wait and see Fuji. He said: "Stern's many supporters is because he bought Sirius, so the customer turnover rate may be higher. Difficult to imagine signing a person alone, even such as Howard Stern, enough to sit back and relax from Sirius. "Stern to use a data to reflect the effect of just a simple calculation. Sirius announced in 2004 the company signed with Stern, said that it only receives 100 million users will be able to recover $ 500,000,000 in contract costs. Lei Zhu convinced this figure, and agreed to pay if a Sirius $ 12.95 per month, and his life worth about 500 dollars.Guay noted that Sirius Road arithmetic that the only difficulty lies in how to measure the true value of Stern. He added that the pay is too high to determine Stern could not identify a company as management personnel, such as chief financial officer as clear the pay is too high. Why? Because you can pay with industry executives compared to other peers, then come to a general data and a reasonable salary range. Entertainment figures, the baseline is difficult to be determined. Guay said: "The entertainer is a completely different situation. Stern is the heavyweight in this industry, he has a bargaining power. Sirius had to try to meet his demands. It's like a baseball star and signing the same. "Guay added, compared to Stern baseball star is appropriate. A baseball team with a star sign, we will certainly be predicted that he would bring the number of jerseys and ticket sales and concessions. Sirius will also have to predict how much advertising revenue Stern (Stern's show in nearly 5 hours of air time in a number of commercial spots), and the media.In terms of attracting media attention, rarely match entertainment figures with Stern. Stern joined Sirius in practice more than a year prior to the time spent in his previous "terrestrial" radio show to join the campaign trail for him. He increased the company's subscribers Sirius gained huge success earned him an incentive clause, that the company's 3,400 million shares. However, no matter how hard Stern, XM and Sirius in the gap between the user remains on the amount of his 2004 contract previous levels.Fader believes that even without Stern, Sirius could get so many users. He said: "The gap between the misled people. If the technology has indeed been widesp, the two [companies] are going to have tens of millions of users. To take such bold steps are too early." Indeed, Fader Stern effect is expected to disappear quickly. Banc of America Securities Jacoby also endorsed the theory. In January 27 of the minutes, Jacoby said, Sirius radio in short supply (to the rise in consumer demand) since early January has eased the beginning, the initial lack of audience data, program ads Stern also for sale at discounted prices.Fader says Sirius bet under the Stern, who also faces a threat, and that is the Internet. "Los Angeles Times" reported last week, the newspaper reported in Internet file-sharing network is flooded with illegal version of the Stern show, the show rapidly rising rates of illegal ing. Stern's show has been widely circulated on the Internet, the fact that Germany can not help but suspect that those who make charges before buying Sirius for Stern Stern fans "will adhere to long.""Push-style" and "pull" marketingExperts at Wharton point out that Sirius and XM's strategy today is very similar to the company, but the future may be split.XM company took the lead with car manufacturers - General Motors (General Motors), Toyota (Toyota, the company has provided to the XM specific car models) and Honda (Honda) - signed an agreement in advance in the factory installation of these brands of cars XM radio, which laid the foundation of its leadership. The company won the carmakers by most of the users. Brokerage firm Friedman Billings Ramsey predicts that in 2008, equipped with XM Radio car from 2,000,000 in 2005 to 500 million. Factory-installed Sirius radio in terms of a step late. Currently, it has been and Ford (Ford), Daimler Chrysler (DaimlerChrysler) and BMW (BMW) signed the agreement. Ended September 30, 2005, Sirius, only 27% of the users is obtained through the car manufacturer. Lei Zhu said that the company's radio stations XM technically slightly better, adding that with the car manufacturers to sign an exclusive agreement to sell satellite radio's strategy is a typical "push-style" marketing strategy. "This industry is characterized by high fixed costs and the operation, we must first invest billions of dollars on satellites, but then the flow of low cost, clever marketing, who who will be able to win. This is a bit like Coca-Cola and Pepsi."However, Fader said that with satellite technology continues to improve, signed an agreement with the car manufacturers will become less important. At this time the company held in relation to the Sirius Stern While this piece play. Bell believes that Sirius seems to shift to "pull" marketing strategy, as it tried to highlight their unique content, and use Stern's affinity to attract consumers. Analysts pointed out that in the fourth quarter, Sirius appears to Best Buy (Best Buy) stores like retail sales achieved good results, the next two years the company plans to further expand through the sales of car manufacturers.Bell pointed out that if Sirius made with automobile manufacturers through the XM company's sales performance was flat, it is widely publicized strategy of their own star may become the key to success, because consumers are voting with dollars, as long as they stirred services can improve the user the amount of enthusiasm. If this demand could have been maintained, more and more car manufacturers will be on what services to provide a more tolerant attitude. In fact, Nissan (Nissan), Volkswagen (Volkswagen) and Lexus (Lexus) and other auto manufacturers have not yet and that the two satellite radio companies ed. Bell said: "In both strategies [with car manufacturers or directly to the audience may be], if the two services can replace each other, then the consumer-oriented model will be more successful."He pointed out that every successful brand, such as the iPod, is through the "evangelist" - between friends, co-introduced products - to maintain its growth momentum. Bell explained the effect of Stern's sermon: Imagine there are two Stern fans, they talk about Stern's show every day. One of them bought a Sirius radio station, and the other did not buy. Suddenly, a man still talking about this program, while another person is not receiving the. "To persuade friends to buy Sirius radio station" will have social benefits. Because Stern is a unique commodity, because XM is difficult to replicate this effect the company. "XM company can employ other people, such as Tang Yi Williams (Don Imus) [Stern, a rival morning show host at Viacom], but it is also very difficult."Sirius's strategy could work, depends largely on the customer's of the two brands. Bell said that if consumers take a negative attitude, that is the same as the two services, XM company - and it is with General Motors and Toyota in the agreement - may be more successful.World War II victory in the contentSirius hopes the recent signing of Stern and Martha Stewart (Martha Stewart) approaches can be rewarded are still unknown. In other words, the content really that important? XM company apparently think so. The company has a competitor XM Opie Stern