In the April 8 listening thread there was a discussion of the impact that Opie Raqio has on the success of SiriusXM, the show's advertisers, impact of the show on subscriber retention and Opie's potential salary. It was a good discussion, but I was unfortunately a bit of an ass to /u/frrunkis , and apologize for that...so I wanted to start the conversation with a more appropriate, professional response to the these topics.

In early 2014 Macquarie Equities Research released the results of the survey in which Sirius XM subscribers were questioned in order to quantify the impact of Howard Stern’s presence on the service. The results found that a minority would feel the hurt if they lost their regular dose of Stern.

• Of the respondents, only 12 percent reported that they listen to Stern regularly.  (Note 12 percent of total subscribers is approximately 3.2 million listeners.)

• Among the 12 percent who reported they listen to Stern regularly, 30% reported that tune in to Stern’s show less than twice a week.

• Only 5 percent of Sirius XM subscribers said that they would consider leaving if Howard Stern was no longer offered by the company.  

• 96 percent of subscribers responded that they would NOT pay extra (either higher rates or an additional fee) to keep Stern in the programming lineup..

Macquarie Equities Research’s Amy Young, author of the study shared the logic behind Stern’s diminishing impact on the satellite radio company: “What this tells us: for new entrants or ‘niche’ players, obtaining high-profile anchor content is a key differentiator and important in building a critical mass,” she says. “As the business evolves, it becomes less vital.”

When Sirius launched in 2002 subscribers had to purchase receivers at retail locations (Best Buy, Good Guys, Radio Shack) and then either have the radio professionally installed in their cars or do it themselves; this is the process that the vast majority of consumers had to endure when Stern joined Sirius in 2006.  

Using his terrestrial radio show, Stern’s grandiose promises of what his show and his channels would feature when they launched at Sirius successfully convinced countless members of his terrestrial audience to purchase satellite radios and subscribe because if they didn’t they would be missing out on the coolest thing ever.  [Note: Almost all of Stern’s promises either never came to fruition or happened a few times; his channels never resembled what he promised his audience]  

Over the past decade the company has successfully partnered with U.S., European, and Asian automakers to integrate SiriusXM technology into vehicles. Today over 70 million are automobiles in the U.S. include SiriusXM radios.  This year over 71 percent of the roughly 16 million new cars rolled out in the U.S. have satellite radio built into the dashboard.

The auto partnerships have been key in diminishing Stern’s impact on the company’s bottom-line simply because it completely changed the customer acquisition and retention process: whereas in the past it required personalities and brands offered by the company such as Stern, Opie & Anthony and Major League Baseball to be the consumer what convinced the consumer to invest the time to go to a retailer to purchase and install the satellite radio equipment, today it’s very likely that it’s already included in their automobile as well as being available both online and on smartphones (with the company offering extended free trials on all of it’s delivery methods).      SiriusXM has proven that people will pay for radio if you offer them something easy to use and more enticing than what’s available free, Jim Meyer, chief executive officer of SiriusXM says. What most satellite radio customers pay for, he says, is the variety. “It’s not one piece of content,” he says.

SiriusXM is constantly making additions to its programming bundle of curated music channels, talk radio shows, and live sports, which has meant making deals with the NFL, the NBA, MLB, NHL, and Nascar. The company continues to develop programming offerings to appeal to key demographics to provide them with another addition to their many reasons for continuing their subscription to the service.   

Why Highly Visible Personalities Stay with SiriusXM:
FBR Capital Markets analyst Barton Crockett says SiriusXM is “highly likely” to keep Stern. He points out that Stern’s alternatives come with short steps backward in compensation, reach, or prestige.

If Stern returned to terrestrial radio, he’d find himself wrestling with government regulators. If he launched a direct-to-consumer product, he’d have to spend significant time and money building the infrastructure.

If he went to Google or Apple, his show would be less accessible for U.S. drivers. By 2017, according to estimates from IHS Automotive, Apple CarPlay and Android Auto will be available in only 3 million vehicles in the U.S. and Canada. By then, SiriusXM estimates that more than 100 million American cars will be satellite-radio-enabled.

Crockett doubts music-oriented services such as Spotify or Pandora would have enough money to poach Stern even if they wanted to. “I don’t know that anyone else can give him as good a combination of lifestyle and money as he can get at SiriusXM,” Crockett says. “If you go to one of these emerging things, it’s not going to be at the same level. SiriusXM has finally become a big platform.”

Why did SiriusXM renew Opie’s contract?
Much like when Stern left terrestrial radio for Sirius, new media companies that are looking to significantly increase their subscriber base among males 18-54 could have used the Opie & Anthony Show as the foundation to acquire new customers and work towards achieving that goal. By re-signing Opie and Jim, SiriusXM was able to prevent it’s new media competition from taking advantage of such an opportunity. Effectively killing the Opie & Anthony brand was advantageous to SiriusXM in several ways.

Does Opie make over a million dollars a year?
I don’t know and I have several doubts. One of the biggest misconceptions is that Opie & Anthony have been earning huge salaries since 1999; that is not the case, when they signed with XM their contract was not too impressive. Opie & Anthony earned all of their big money when Infinity/CBS signed them to their huge deal at WNEW; the reason they attained such a huge contract was two-fold: the show’s strong ratings produced substantial advertising revenue for the company which caused them to become the first show viewed as a potential real challenger to Stern’s supremacy in the key demographic in morning drive radio. Infinity/CBS threw a ton of money at O&A to prevent Clear Channel and others from giving O&A a similar offer to do nationwide morning drive for that company (it’s been said that the offer from Infinity/CBS was significantly higher than the others which makes it clear that Infinity/CBS knew that O&A were a legitimate contender to dethrone Stern).

Another reason I question if Opie makes 7 figures is that, if I recall correctly, it was revealed a few years ago that Jimmy was earning $250K/year from SiriusXM. I simply cannot fathom that Opie would be earning $750K more than Jimmy. I could be wrong.

Sources: http://www.bloomberg.com/news/articles/2015-03-11/howard-stern-siriusxm-contract-doubts-come-amid-upheaval-in-radio

http://deadline.com/2014/01/should-siriusxm-ask-howard-stern-to-take-a-pay-cut-669893/