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Little Steven Discusses Satellite Radio’s Impact on Commercial Radio

March 30, 2005 at 12:00 AM EDT


TERENCE SMITH: What drew you, or what appealed to you about satellite radio?

LITTLE STEVEN: Honestly, I wasn’t that crazy about the idea at first. You know, XM had come to me first and they had heard my show, my syndicated show, “Little Steven’s Underground Garage,” which is on regular radio that they sometimes call terrestrial now, and it seemed like a silly idea at the time.

TERENCE SMITH: The satellite radio contest?

LITTLE STEVEN: Yeah, you know. I mean, I didn’t quite get it because it wasn’t standard equipment in the cars and I was like, so you’re going to ask people to pay for something that they’ve been getting for free and I’m like, give me a channel and I’ll think about it, you know. But they didn’t want to give me a channel, so that was that.

And then honestly the reason I got into it was because of Scott Greenstein, a friend of mine, and somebody I respect very much, basically talked me into it. He became a consultant for Sirius and started to sort of sway me as to the possibilities of this stuff.

TERENCE SMITH: What was his most persuasive argument?

LITTLE STEVEN: Well, that my two hour syndicated show was, in fact, a format, and that he would like it to run it 24/7. This was very much a great interest to me.

TERENCE SMITH: Which was the idea that you had originally when you were talking with XM?

LITTLE STEVEN: Yes. Yes, so right away I’m like well, let’s try it. And I realize I’m in the minority at this point, but I personally feel it’s a complementary relationship between so-called terrestrial and satellite, and I continue to have a very complementary, synergistic relationship between the two.

My show remains exclusively on regular radio with me as the host, and I have now created two channels for Sirius plus a third talk show, and it all works very well, you know, as far as I’m concerned.

TERENCE SMITH: What persuaded you over your initial objections that you just – or not objections but questions — that you just said didn’t seem to work in your head.

LITTLE STEVEN: It was an odd business model, to be honest. I mean, it really was.

But the way it’s turned out, it’s just a slower roll-out than I would have expected. If you’re going to invest billions of dollars in this new technology, don’t you have a delivery system in place to go with it? Well, they didn’t. And I was very surprised.

The XM guy explained it all to me. Personally, I said to him, you know, whatever – first of all, you should be in Europe first rather than America. But that’s a whole another issue, because there’s no competition there, you know. There is no radio at all in Europe.

Anyway, in the end it was explained that the car thing would slowly start to happen, and ultimately when Scott started laying out his plans for content, I realized this is okay. If it takes five or ten years to roll out, it’s going to be okay, and that’s how it’s turned out because he was so content savvy that I knew it was going to be a really cool place to be.

TERENCE SMITH: So for you, if I follow you, the opportunity was more time in a new medium to do more of what you’d already been doing.

LITTLE STEVEN: Yes, in an environment that I felt was good for everybody, in a sense, of the fewer, you know, commercials and all that.

And I spent a good deal of time with my terrestrial partners, getting them to limit to advertising on my show. My show is probably the only show on that has literally half of the commercial inventory than everybody else does. We do that intentionally. And I’ve told everybody at regular radio, hey, you know, it’s time to start cutting down these commercials. It’s too many. You can’t do 16 minutes an hour. It’s unlistenable. And I’m a fan first, you know. I am listening to the radio, you know. I love the radio. And those last 10 years, 15 years we’re losing the audience. The audience is not listening to the radio anymore, okay, and I really wanted to change that. I really did.

TERENCE SMITH: What kind of audience do you think you’re getting through Sirius satellite radio?

LITTLE STEVEN: I imagine similar to my syndicated show, which is a very, very wide demographic. I get e-mails from 11 year olds saying thank you for turning me onto this group called the Kinks. I never heard of them, to, you know, 61 year olds saying thanks for playing that really cool Eddie Cochran song that nobody else is playing, you know.

I have the only format ever that plays all six generations of rock ‘n roll in one place at the same time, and it works. I mean, everybody’s sort of thinking that young people are prejudiced against old people and vice versa. It’s simply not true when it comes to real rock ‘n roll.

TERENCE SMITH: The verb you used was you said “I imagine it’s the same.” Is that part of the problem, that you don’t know and can’t find out? You said the audience is probably very similar. In other words, how do you know who is listening, and how do you know how many are listening?

LITTLE STEVEN: Well, it’s early days as far as finding out – I mean, we know how many subscribers there are, obviously. But who is listening to which show, I’m not sure we’ve actually done any surveys on that stuff.

TERENCE SMITH: I don’t think I have, and my question is, is that a problem for you? Does that bother you? Does it concern you that you don’t know on a given day how many people are listening to your channel or channels on Sirius?

LITTLE STEVEN: Well, no, not yet. I mean, keep in mind we have to sort of be a little bit logical here.

I mean, business in general, at least the way it used to be, was three things, – content first, hopefully; marketing second; and then the business third. Assuming that is in place somewhere in this world still, we are just reaching that second stage now with Sirius.

So, you know, Scott and Joe Clayton at the time felt we have to begin with content, and I agreed 100 percent. So that’s what we spent our last whatever – year, year and a half, two years on.

We are now in a good place. I think Scott is probably 80 percent there where he’d like to be. I mean, he can answer that better than me.

TERENCE SMITH: In terms of content.

LITTLE STEVEN: Yes. I mean, we are just miles and miles and miles ahead of everybody. So the next stage is to let people know about it, which we haven’t done, and we’re just now beginning the whole marketing campaign to let people know we have this wonderful content.

I think what you’ll see in the next, whatever, six, eight months, you know. And then you start to evaluate the business. You know what I mean? That’s the order it should go in, and I believe it will go in.

You then start saying, okay, we’re spending money here, and maybe we should spend it there, and how are we doing, you know, what the demographics are doing, what shows are working, you know. But until you let people know that we have this wonderful content, we can’t begin to judge those things.

TERENCE SMITH: Was there any attraction to you in satellite radio in terms of artistic freedom in satellite radio, which is unregulated as opposed to terrestrial radio which is, of course, regulated by the FCC?

LITTLE STEVEN: Well, it wasn’t a factor for me because I have a very, very PG show, consciously, intentionally because I’m trying to reach as young an audience as possible. The reason why I’m doing my show is because it occurred to me that we have a generation or two of people who have never heard real rock ‘n roll. They can hear hard rock, they can hear hip-hop, they can hear pop. They can’t hear real rock ‘n roll.

If the Rolling Stones started today, there’s not one radio station in America that could play them. They don’t fit into any format. There’s no format for rock ‘n roll.

Don’t ask me how we got to this absurd position, but we have.

So my idea was let me create something for all ages, particularly young people who are going to be discovering this new, wonderful thing, you know, we now call garage rock, but was actually traditional rock ‘n roll.

So I have complete artistic freedom on my syndicated show every week on regular radio, and I continue to have, of course, complete artistic freedom here. So it wasn’t a big factor for me.

It’s more of a factor for people who want to be a little more edgy and use language that, you know, you can’t use on regular radio and things like that, a little more adult, let’s call it, you know, and we have sort of adult channels at Sirius for that.

TERENCE SMITH: So, in the end for you it was another medium, more time.

LITTLE STEVEN: More time, again the format 24/7. My main gig right now is an advocate for rock ‘n roll and an advocate for radio. So it was just a way of expanding that communication and getting to more people hopefully.

TERENCE SMITH: That’s fascinating. Different, obviously, than the motivations that Howard Stern talks about on the air on a daily basis.

LITTLE STEVEN: Yeah, which is why Sirius is great, because it can be a lot of different things for different people, right. It can be a haven for what I call the freaks, misfits, and outcasts to all come together and do their own thing.

TERENCE SMITH: Let me ask you one final question because you prompted me with that — what do you think is going to be the impact – good, bad, or indifferent – of Howard Stern when he does, in fact, finally get on satellite radio?

LITTLE STEVEN: The impact on satellite or the impact of Howard’s show itself?

TERENCE SMITH: Yeah, the impact of Howard’s show in an unregulated atmosphere.

LITTLE STEVEN: Well, you know, it’s funny, when you can really do whatever you want to do, you know, it actually makes you a little bit more — you know, it makes you think about it a little bit more in a funny way, rather than on a natural instinct to be rebellious, you know.

So I think at first it’s going to be just, you know, open season. It’s going to be just a wide-open fun pallet to paint on, and I think then it will settle down into what Howard actually wants to say and what he wants to do.

Either way, it’s going to be real freedom, and in the end for creative people, real freedom leads to something that is going to be positive and productive, I think, you know, for everybody. So it will be – he’s going to bring – certainly I expect him to bring a couple of million people immediately, you know. By the time he’s on, I mean, there certainly will be another million or two subscribers, which is great for all of us, you know. And in the end I think Howard’s show will reach some new level of truth, which I think he’s at the bottom of what he does.

I mean, he’s very funny, and he’s kind of, you know, a lot of it is disguised and sort of adolescent, you know, silliness. But actually, when you get to know him a little bit, I think you discover there is actually a search for a certain kind of truth and honesty there with his show, which is what people ultimately respond to.

TERENCE SMITH: …particularly for somebody who sees them as complementary, terrestrial radio and satellite radio.

TERENCE SMITH: Can you look ahead in a crystal ball and imagine what impact satellite radio with its freedoms might have on terrestrial radio?

LITTLE STEVEN: Yeah, I think it’s good. I mean, I’m seeing this in a very positive way. I think the balance between the two, obviously, will shift a bit. Obviously, the subscribers to satellite will increase. The listeners to regular radio, terrestrial may drop a bit. You know, there may be more of a balance.

Ultimately, though, it has to affect the amount of commercials on regular radio, I think, in the sense of there will be less. And, you know, what I do on my syndicated show is we have less commercials and we charge more because the show is better. My audience is a higher quality audience. They’re tuning in for my show. They’re not hitting the buttons when the commercials come on. They respect my advertisers because I have so few of them, you know.

That is what’s going to happen, I believe. There will be fewer commercials on regular radio, and probably charge more, which is fine for everybody really, and maybe they’ll get a little more adventurous, you know, with the content perhaps, one would hope.

TERENCE SMITH: That’s what I’m wondering, whether you think it would have an impact on content — the terrestrial radio content, the criticism of which is that it has become homogenized across the country, and is largely indistinguishable.

LITTLE STEVEN: Which is true to an extent, but let’s not pick on the radio industry. That’s true with every industry, isn’t it? I mean, I see that across the board.

That’s what Wall Street likes. They like this homogenized short-term thinking in business, don’t they? They seem to.

Nobody is thinking long-term anymore. Nobody is thinking about what is the impact of the content or, you know, nobody cares about things like that anymore.

We should learn from the American Indians who think seven generations ahead, right? That’s not the way we do business in this country anymore. So, let’s not pick on this particular industry.

I mean, I think the merger mania leading to this lowest common denominator culture of ours is across the board. It’s bad for everybody.

So ultimately will radio have more interesting content? I think so. I think so. I think they will be forced to be – but it’s – the parallel is exactly what cable did for TV, isn’t it? I mean, it’s virtually identical, okay. Sirius is now the new HBO, if you will, and did that put ABC and CBS and NBC out of business? No. Everybody needs to relax, okay.

You know, the old mediums are always afraid of the new mediums, right? It’s happened all the way since radio started, you know. That’s not the case here. Nobody is going to go out of business.

Ultimately, it’s going to improve both things. Healthy competition. Let’s improve the content, you know. Maybe it will stop all this ridiculous reality programming of their kind, you know, and do something that actually means something. So I see it as nothing but good.

TERENCE SMITH: So that’s my question — you’ve done terrestrial radio. What did this new technology offer?

LITTLE STEVEN: It was just an expansion of what I was already doing, I think, you know. Rather than two hours a week, I get a chance to do this 24/7. That’s the biggest difference for me. My own show will continue. I am exclusively on that show. I am not a DJ on Sirius.

But to my DJ’s that I’m bringing in, I’m bringing in some fantastic ones, they will carry on my format and that’s what matters to me is getting the format across to as big an audience as possible because I have the only format in this country that plays real rock ‘n roll.

TERENCE SMITH: That does it for me.