howard-stern-hates-iphonesLast week Sirius XM finally launched an app for the iPhone and iPod Touch. The app made big news in a couple of ways. First, the fact that Howard Stern was not available on the app was the major attention getter. The other newsworthy item is that despite Stern’s absence, the app has enjoyed a huge number of downloads, and quickly became one of the most popular apps to hit the market.

With all of the excitement, news, and reviews, there is still one question on the minds of many. Why isn’t Howard Stern available. Speculation ran wild, and calls to Sirius XM were met with an overall silence with regard to the issue. Some felt that Sirius XM was holding back, others felt that there was a potential worry about bandwidth on AT&T’s network, and still others thought the issue may revolve around Stern wanting more money.

While any official confirmation has not been made, there are several indicators that would point to the fact that Stern is a central part in this issue.

1. The general lack of discussion of any kind regarding the app coming from the Howard Stern Show.

2. Indicators on Gary Dell’Abate’s Twitter page that indicate possible rights issues. Note, the page appears to be Dell’abate’s, but verification could not be made prior to publishing. Note: It has since be verified to be fake.

3. Sirius XM taking on a virtual silence, which would indicate that the issue is in some form of negotiation.

It would appear that the Stern contract, which likely has many stipulations, must have some clause dealing with “mobile media”, and the potential of third party operations. In short, there are various aspects of the app that may trigger a “no-go” for Stern inclusion unless the parties sit down at the table and negotiate. Such possibilities include, conflicts with In-Demand, mobile media exclusions and inclusions, or perhaps even something specific to Apple.

Now, before everyone starts talking about all of the money Stern already has, and labeling him as money hungry (which he actually is), we need to step back and understand the dynamics at play. If Stern, or his agent, was smart enough to see the potential moving forward, than I take my hat off to them. However, in this case, it is quite possible that Stern is biting the hand that feeds him, and his actions have squandered the possible exposure associated with the launch of the iPhone app.

To be fair to Stern, there is no way to know exactly where things stand. His possible demands could be very simple and doable, and if that is the case, shame on Sirius XM. Karmazin is known as a cost cutter, and perhaps the parties simply came to an impasse as time ran out for the launch of the app. The launch date would have been the leverage Stern had, and with that now gone, perhaps more realistic negotiations can happen moving forward.

Sirius XM can never recoup the lost exposure they would have had if Stern was part of the app. Let’s hope that the financial decision made was worth it, and the parties can hammer out the details moving forward.

Thanks Mike!
Position: Long Sirius XM, No Position Apple.