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Supplanting the King of All Media

8 Feb, 2006 By: Erik Gruenwedel

Howard Stern, the self-proclaimed “King of all Media” and vocal critic of federal obscenity laws, is apparently being illegally downloaded by — aghast — increasing numbers of former loyal listeners.

The shock jock last month took his racy radio show to Sirius Satellite Radio for a five-year, $500 million whopper of deal, betting a sizable number of his 12 million listeners would flock to the new medium for $12.95 per month.

Since last month, more than 1 million reportedly have. And so have the pirates, up five-fold this year, helping send Sirius stock down 20%. Backlash against Stern's extravagant contract, including a $200 million stock payout? Maybe. More likely, though, Stern is on the precipice of a living hell that has saddled the music industry for six years.

Now compare that to TV DVD and episodic downloads now playing on an Apple iPod Video near you. What was once available on TV has been repurposed for increasing incremental revenue by the studios and networks with nary an impact from piracy.

To be sure, technological advancements needed to illegally download video content aren't widely available or as easy to navigate as ripping MP3 audio files. But that's only half the answer.

TV has always been perceived as free. If you have cable, when you watch programming you are not consciously aware of outlaying cash for that experience. When that content is put on iTunes for $1.99, there is a perceived value for it.

There is no long history of consumer displeasure regarding movies and TV as there was in music, where consumers felt they were buying an album just for a song and getting ripped off in the process.

So could that all change when Susie Smith realizes season five of “The West Wing” had just one good episode?

Yair Landau, president of Sony Pictures Digital, doesn't think so. “You don't see people saying, ‘I bought last season of “24” and I got ripped off because not enough happened in episode four.’

Ultimately, technology will empower the consumer to tell content holders how they want to consume their content. Experts say it's just a matter of time until it transforms the business to the extent it has in music.

If the traditional food chain of content distribution collapses, it is unclear what that would mean to the economic equation. Until then, enjoy the ride to Hell, Howard.

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