Who makes $93,000 an hour?

Both satellite radio companies, XM and Sirius are battling for subscribers and until Sirius hired Howard Stern, it looked as if XM was going to go the quantity over quality route, emphasizing more channels and fewer commercials. Sirius hired more regular disc jockeys, while XM hired a few hosts to preside over some shows, but basically it remained a more music service. XM even emphasized the technology over the programming, by flogging the fact that you could drive across the country and have a continuous signal. Marshall McLuhan would be proud. Sirius' hiring of Howard Stern resulted in a big 4th quarter gain in subscribers, while XM says they're leaning towards running more commercials. Nevertheless, both companies have posted big losses.

As each company invested in attracting new subscribers, Sirius and XM reported net losses of $863 million and $666.7 million respectively for 2005. Sirius had the better return on investment with its fourth-quarter surge of subscribers, while XM signed only 900,000 new customers in the fourth quarter.

XM seems to have caught on to the fact that they're going to have to hire some recognizeable talent to justify people spending the money for the equipment and the subscriptions. They recently hired Oprah Winfrey to do a talk show for 30 minutes a week. While XM is gong to be paying Oprah $18 million a year to do her show. Certainly this is going to be an afterthought to her TV show, but who can blame her for not turning down $18 million to record a 30 minute show once a week, probably from her apartment in Chicago or her studio. I'm certain she won't be traveling to the Washington, DC XM studios to do it live. Stern's main focus is his Sirius show. MSN has an interesting article breaking down both salaries and pointing out that Stern's $150 million dollar a year contract works out to $93,000 a hour, an amount that most people don't make in a year. Certainly this is an exorbitant amount of money unless Stern becomes responsible for putting Sirius on the road to black ink. At that point, he'll be worth every penny and much more. XM will get some publicity out of the Winfrey deal, but she's not a radio person, and it may turn out that she's grossly overpaid if her hiring doesn't translate into a big subscription increase for XM.

As for me, you couldn't pay me $15 a month to put satellite radio in my car or home. I have all of the music I want on mp3 CDs and if I get a burning desire to hear "Satisfaction" or "Saturday In The Park" three times a day, I can listen to local radio and then turn it off when they begin their 15 minute commercial blocks. And NPR fills all of my real listening needs.