Howard’s End? How SiriusXM Will Survive After Stern

A few years ago, audio platforms and media companies threw enormous amounts of money at creators to build their podcasting slates. Spotify, which spent more than $1 billion on its push, inked deals with the Obamas, the Sussexes and more, in addition to bankrolling its biggest star, Joe Rogan. Now, after a content spending pullback, it’s a different landscape. One that, in the telling of SiriusXM president and chief content officer Scott Greenstein, has matured to the point where it’s clear which big players in the audio space still can write checks. Namely, SiriusXM, Spotify, Amazon’s Wondery and iHeartMedia.

SiriusXM has been particularly aggressive in making rich talent deals this year, snapping up both SmartLess and Call Her Daddy, two of the most popular podcasts in the industry. The acquisitions were notable not only because of their price tags, both at $100 million-plus, but also for what they say about the satellite radio giant’s larger business strategy and reputation as a talent-friendly destination. 

“No one is kind of correcting us or saying, ‘Oh, I don’t know, you should do it this way,’ ” says Ted Danson, who’s new to the podcasting space with Where Everybody Knows Your Name With Ted Danson and Woody Harrelson (Sometimes), which is under Conan O’Brien’s Team Coco banner, acquired by SiriusXM in 2022. “We get this kind of carte blanche: ‘Go have fun and talk to interesting people.’ ”

The company wants to keep bringing in new names, and ad dollars, particularly in light of retirement rumors for Howard Stern, a blockbuster host who has added fuel to that rumor while also savvily reminding listeners each time he’s in contract talks of how he has built up the SiriusXM brand. But it’s also testing ways to convert free podcast listeners to its paid offerings, including the possibility of a paywall. That time hasn’t come — yet — for SmartLess or Call Her Daddy.

“When you look at what’s going on with the bigger podcasts, we are testing constantly by having certain things exclusive, certain things behind the paywall. Eventually, we’re going to take a gamble, if we find the right podcast talent and a willingness on the talents’ part, to go behind the paywall knowing we’ll lose some free listeners, like you always do,” says Greenstein.

“With those that’ll pay, if it’s enough, you’re now recreating the podcast model like satellite radio. So you can’t think of doing that without having your hands on a handful of the bigger ones to do it,” he adds.

SiriusXM needs to add new shows to keep feeding its large podcasting ad sales unit, which accelerated with the acquisition of podcasting company Stitcher in 2020. Greenstein says he looks for shows — he keeps an eye on the top 10 or 20 podcasts in the industry and when their contracts are ending — that have big, monetizable audiences with the potential to grow. He adds that the company evaluates metrics such as downloads, ad revenue and social media buzz. Those contracts also come with download floors and metrics that the podcasts must meet. “We just won’t make stupid deals,” he says. “And we won’t make deals that don’t make sense. It doesn’t mean some aren’t a gamble, even in a smart business setting. But that’s the nature of the media business.” 

Even before this year’s big swings, SiriusXM already had a notable podcasting slate with Ashley Flower’s Crime Junkie, which ranked as the second biggest podcast in the U.S. in the second quarter, and Dateline NBC, which ranked as the fifth, per Edison Research. Alex Cooper’s Call Her Daddy, an interview-style podcast with a large base of female listeners, was the fourth most popular podcast in the U.S. in the second quarter, while SmartLess, the celebrity interview podcast hosted by Jason Bateman, Sean Hayes and Will Arnett, was the sixth. SiriusXM has distribution rights for the podcast episodes, which are currently widely distributed, and exclusive ad sales rights. 

The exact nature of which show or shows and how many episodes would be behind the paywall is still to be determined, and also depends on the talent’s willingness to take the plunge. This may prove to be a tricky proposition given that Spotify has dropped its exclusive distribution strategy for its popular podcasts, including Cooper’s, with the upfront cost to the company and talent dissatisfaction at cutting off a wider audience both playing a factor.  

Greenstein says it’s a similar discussion to the one he had with Stern, in which SiriusXM would promise to retain the podcast’s creativity while getting the talent out of the “ratings rat race” and also offer a compelling financial incentive. “You preserve their creative exactly the way they want. You create an economic model that makes them excited. And at the same time, we’re now in a position where that big fan base, if they want that to continue, the only place they can get it is SiriusXM,” Greenstein says. 

Beyond serving as tests for a possible paywall and bringing in ad dollars, the big podcasts feed into the larger SiriusXM ecosystem, with many already having streaming radio channels with early and additional content on the company’s SiriusXM streaming app, a newer, lower-cost ($9.99 monthly) subscription service meant to bring Sirius content to listeners inside and outside of the car and pull in younger subscribers.

All of these moves are made with an eye as to when 70-year-old Stern — SiriusXM’s longtime talk radio leader, who has a contract through the end of 2025 — decides to retire. By that time, the company plans to have a built-up bench of audio talent, which also includes James Corden, Andy Cohen and O’Brien. And that’s thanks in part to Stern’s influence. “I chose Sirius because there is a lot of opportunity to go to different places and grow Call Her Daddy into something bigger,” Cooper told THR. “To see what they’ve done with Howard Stern is incredible.”

But Greenstein notes he has not heard from Stern about wanting to leave. “He’s been with me and the company going on two decades, and so he’s pretty happy, but he’s also able, like many great artists, to stop whenever he wants. Nobody will ever replace them. We would never try to replace them. It’s not what is even appropriate, but even practical,” he says. “What you always want to do in anything, whether it’s a sports team or a media company, you want to have a great bench of talent that have their own identity.” Even if he were to retire, SiriusXM will still own Stern’s library of content for a number of years, “so we’ll always have Howard’s voice on our air,” Greenstein adds.

The bulk of the company’s revenue still comes from the satellite business, while ad revenue was pressured in the first half of 2024 amid broader consumer uncertainty. Last quarter, SiriusXM, which also owns music streaming service Pandora, reported revenue of $2.2 billion, down 3 percent year over year, with $443 million of that coming from advertising revenue, which was flat-year-over year. Advertising revenue was pressured in the first half of 2024, amid broader consumer uncertainty, but podcasting advertising revenue has remained a strong point.

The number of satellite subscribers has been fluctuating at the company, with SiriusXM losing 100,000 subscribers in the past quarter and about 450,000 in the first half of the year to reach 31.5 million. This is an improvement from 2023, and the company still has a low average monthly churn, but there are some concerns about a longer-term downward trend amid satellite radio’s aging demographic. 

That’s also where both the streaming app (which will compete with Spotify and its 246 million subscribers) and the podcasts come in, as well as other lower-priced packages. “We have a very strong core market of subscribers, which is the older over-45. And we’re looking not only at content, we’re looking at different ways to reach out, including with the various pricing and packaging to reach the younger demographic,” SiriusXM CFO Thomas Barry said at a March investor conference. 

Barry added, “So we are adjusting our content, as you saw with SmartLess. and as I said, with John Mayer and with James Cordon, we’re starting to look at some of the content that will reach the younger generation.”

Cooper’s podcast network also comes with the chance to capture a large young female audience, but Greenstein says that was not the driving force behind the acquisition. “We couldn’t be more excited about that,” he notes. “Having said that, the way we might get there is because we signed a true talent who happens to appeal to that audience, not like we woke up and our mission is 18-to-34 young women and we said, ‘Who else fits that?’ ”

In the move from Wondery to SiriusXM, Richard Korson, president of SmartLess Media, says the company was looking at SiriusXM’s broad reach across audio mediums as well as the ability to host more live shows and build out additional podcasts across the company’s three-year deal. In the short term, he expects two more shows to launch from SmartLess Media this quarter and likely two more in early 2025.

“I think we were excited at the idea of expanding our fan base and for all of our shows at SmartLess Media,” Korson says. “I’m a firm believer of great audio is great audio, and people consume it as part of their media consumption. And Sirius offers us the ability to meet consumers where they are, whether it’s on satellite radio or in the podcasting network.”

In addition to the talent-friendly view and broad network, Greenstein says part of SiriusXM’s pitch is its booking team, which he notes is capable of getting most guests on the shows. Kamala Harris recently appeared on Call Her Daddy and The Howard Stern Show, as one example. 

The company also has an interest in finding and building up new talent, such as the newly signed Dylan Douglas (son of Michael Douglas and Catherine Zeta-Jones) — who has a political show aimed at a Gen Z audience on the SiriusXM Progress Channel — in the hope of growing them into the next SmartLess or Call Her Daddy. Those acquisition deals also include bringing a network of podcasts under the SiriusXM umbrella, including Cooper’s Unwell Network with shows including Hot Mess With Alix Earle, and the possibility of developing additional shows, all of which make the six-figure acquisition deals more “cost-efficient,” says Greenstein.

Investors bullish on the stock prize the company’s free cash flow, which is projected at $1.2 billion in 2024, given its generally low capital expenditures. (Warren Buffett’s Berkshire Hathaway recently became the company’s top shareholder after a stock combination that simplified the company’s ownership structure.)

But Wall Street also likes cost efficiencies. “There’s a concern among investors that they’ll sort of quixotically go after the younger demo by investing a ton of money and younger-focused talent, and that’s going to hurt the free-cash-flow story,” says Pivotal Research analyst Jeffrey Wlodarczak of the SmartLess and Call Her Daddy deals. At the moment, Greenstein says the company is pausing and taking stock of the landscape. “It’s really hard to find great talent,” he says. “We have the great talent, in my opinion, that’s available.” But, if another deal came along, he doesn’t rule it out either. 

A version of this story first appeared in the Oct. 23 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.