What is the true cost of Howard Stern to the U.S. Sirius satellite network and how many subscribers will it need to break even?

Original estimates of this by the influential Banc of America Securities analyst Jonathon Jacoby have been raised as he warns that the initial Stern-related subscription upsurge has fallen off.

He is now estimating that Stern’s compensation package will cost Sirius about US$675 million (US$400 million cash) rather than US$500 million and that the company will need to add 2.4 million incremental subscriptions, up from his previous 1.5 million estimate.

Jacoby also pointed out that the retail market was showing that sales of receivers are slowing despite continuing discounting and that ad revenue for Stern’s show will reach about US$20 million this year. He says that Stern will result in about 500,000 net subscribers added in 2005, so there’s a long way to go to reach the break-even estimate of 900,000 subscribers.

Meantime, in a nationwide survey commissioned by American Media Services, a full-service radio brokerage, engineering and developmental engineering firm, the ‘Howard Stern Factor’ is shown as being overrated and that few Americans expect to purchase satellite radio.

The survey also asked the 1,008 respondents what they liked best about conventional radio. 33% of them said “local traffic and weather information,” while another 25% said they liked radio because “it’s always available when you need it.” 13% said they liked radio because it helped connect them to events taking place in their community, and 10% said they liked radio because they knew they could get vital information from radio in case of an emergency.

And what did consumers not like about radio? 57% responded that “the amount of time for commercials” is the highest on their lists.