There is little debate that the greatest radio host in history is Howard Stern.
In addition to reinventing himself multiple times, from the long-forgotten battles with the FCC in the 90s to giving Charlie Rose a run for his money over the past decade as ‘greatest interviewer alive,’ Howard’s savviest role is behind the scenes as a platform rainmaker.
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First he syndicated his show across the nation after being told his New York humor wouldn’t fly in other markets — heck, they told him he wouldn’t work in Boston and DC! He hit 60 markets and 20m listeners.
Then they told him he couldn’t do books, movies and TV, and he became the King of all Media.
When a new platform emerged called satellite radio, he jumped ship, made a couple hundred million, and literally put a Sirius and XM on his back.
Of course, what was great about satellite was that he could be in every market with one deal, but the drawback was that you had to pay. Can you imagine how huge Howard would have become if satellite radio chose to be ad-based?
Anyway, SiriusXM has reached the end of the line with satellite radio because, well, the Internet. With LTE/4G speeds and smart phones, listening to Howard on-demand is soooooo much better.
You no longer have to miss half an interview; you can simply listen to anything that occurred in the last 10 days. A huge benefit, but still only 1% of the potential.
It’s time for Howard to leave satellite and go direct to consumers or join Spotify. Either of these will make him $1b. Here’s what Howard 3.0 would look like:
- Howard tapes his show at any time. No more waking up at 4am and worrying about not being able to take Beth to parties. If you want to start at 10am or 1pm or 10pm, go for it.
- Howard tapes his show from anywhere at any time. Want to stay out in the Hamptons? Tape when you’re in LA? Sure, set up a couple of microphones and go.
- Never have another boss.
- Provide your entire catalogue free or for subscribers on the internet (Howard got his archive back years ago).
- Allow fans to remix and make clips from the archives — and repost to your site.
Howard could join the ‘tres commas club’ instantly by joining Spotify. It’s a match made in heaven that would result in the largest and most important audio company ever created.
Here’s the simple math:
- Spotify now has 15m subscribers paying $10 a month and is valued at $8.4b — or $560 a subscriber.
- Howard Stern would easily drive 1,000,000 new subs for Spotify, which at $10 a month would generate $120,000,000 a year in revenue and $560,000,000 in market cap increase.
- My guess is Howard hits 3m paid subscribers in three years. That’s $1.5b in market cap increase.
- If Howard comes to the platform other top broadcasts will come, too (we saw this at SiriusXM).
Spotify would bring Howard global and give him access to triple the number of subscribers as SiriusXM, while putting a tech team at his fingertips to do special projects with his archive.
If I were Spotify, I would give Howard 5% of their share ($500m) as well as $50m a year for 10 years. That’s a $1b deal for Howard that I predict would make Spotify $10b+ more valuable in five years. Which would make Howard another half billion with the increase in value of his shares.
Startup Route: HSR.com
If Howard wants to really build a legacy, he can easily raise $10m in venture capital (or fund it himself), partner with a group of founders here in San Francisco, and launch a direct subscription business and a dedicated Howard Stern App …. call it Howard Stern Radio, or HSR.com for short.
The App would let you listen for one hour per week free and unlimited if you pay $10 a month. I’m guessing he hits two or three million subs quickly. That’s $14-21m a month after Apple’s 30% take.
A company with $150-200m a year in revenue with a 50% margin (after paying Howard half the money as an artist), would be worth over $1b. Of course, Howard would have to launch 10 other shows and hope he finds a couple of actual stars to take over “HSR” after he retires in 10 or 15 years.
Howard’s App would be in the top 10 free apps and paid apps in the App store … instantly.
I could build that team and App platform in <100 days for Howard. Not that I’m floating the idea of being Howard’s angel investor or anything. (I wouldn’t stop anyone out there if they forwarded this to Baba Booey or Howie or Beth or Fred).
The Podcast Boom
If this were 10 years ago, my advice would have been to take the Sirius money and not do a startup because, well, podcasts just didn’t work that well. There was a discovery problem, which has been solved by a bevy of awesome podcasting apps including Apple’s Podcasting App, Overcast, Swell (bought by Apple – I was an investor), TuneIn, Stitcher, and countless others.
High-speed and low-cost bandwidth from carriers, public radio leaning into podcasts, and pioneers like Kevin Pollak, Leo Laporte, Adam Carolla, Marc Maron, and Adam Curry have made podcasting mainstream. (It only took 10 years!).
Credit is also due to savvy advertisers like Squarespace, Mailchimp, and Audible, who were early supporters of the new medium. (Disclosure: all three have sponsored my podcast, This Week in Startups).
What a legacy that would be and it showcases the ultimate power of loyal fans. The most loyal fans can build a billion dollar company.
All you have to do is get to 100 and then 1,000 and you can make a living (the 1,000 true fan theory), but if you can make it to 10,000 and 100,000 (where I am as a broadcaster) you have a $1m a year business. Get to 1m or 10m? You’re a legend … and Howard is the first person to ever do that.
What a broadcaster … I hope he keeps taking risks and doesn’t settle for the status quo.
PS – We launched a 30-city, global startup competition called SMARTCAMP with IBM. You can sign up at smartcamp2015.com. The big prize? A $25,000 investment from me … and one of seven coveted slots in our 12-week incubator (which has a <2% acceptance rate).
PPS – We have a SLACK room and a Google group for This Week in Startups super fans. You can join it at crowdfunding platform Recurrency.