Sirius XM Radio Gets Kinky

by Jonathan Berr | January 10, 2013 9:47 am

Sirius XM Radio (NASDAQ:SIRI[1]) has learned what its star, Howard Stern, has known for years: Sex sells — even on the radio.

Now, it’s going to practice what Stern has been preaching to further tap into the $8 billion adult entertainment business.

The satellite radio operator just announced that its Spice Radio channel has changed its name to Radio Sex[2]. It will offer “uncensored, explicit adult entertainment” such as Naughty Gamers, a show featuring porn stars Alana Evans and Missy Martinez.

Though I was skeptical at first, the more I thought about Radio Sex, the more that I liked it … from a business standpoint, of course. (I need to make that last point clear in case my wife ever reads this post).

Sirius XM already has plenty of sexy fare, so the addition of Radio Sex isn’t a shot in the dark. The Playboy Channel[3] (102) offers what it calls “smart, sexy sophisticated adult programming,” including SWING — “a weekly exploration of the swinger lifestyle as seen through the eyes of people who are living it.” Maxim and Cosmopolitan magazines also have channels.

Porn on the radio isn’t as ridiculous as it seems. After all, the biggest sexual organ is the brain, and radio is the “theater of the mind.” Stern, perhaps Sirius’ biggest star, realized decades ago that plenty of men would listen — that’s right, listen, without even seeing — to a half-naked or entirely naked porn star talk about sex. A plethora of sexually oriented podcasts prove this point.

Of course, the self-proclaimed “King of All Media” has nothing to do with Sex Radio, but that’s not a bad thing, either.

Stern’s relationship with New York-based Sirius has been rocky at times. The shock jock has threatened to retire and has sued his employer over stock awards tied to his original contract. Any time Sirius adds content that would appeal to Stern’s fans that he doesn’t produce, it provides the company with an insurance policy in the event that Stern decides to call it a career without warning.

For those who find Stern offensive and could care less about the world of porn, Sirius has plenty of other content that they might like, from commercial-free music to conservative talk radio to Martha Stewart to sports. The breadth of its content offerings has enabled the company to defy the naysayers who have forecasted Sirius’ demise for years. Though Pandora (NYSE:P[4]) and Spotify are competitive threats, both are unprofitable and, unlike Sirius, give some of their content away for free.

Times are changing at Sirius. John Malone’s Liberty Media (NASDAQ:LMCA[5]) has won FCC permission[6] to take over the company. Mel Karmazin, a pal of Stern’s, decided to quit as CEO even though Malone wanted him to stay. As I recently pointed out[7], this uncertainty presents a good buying opportunity for investors to pick up the heavily shorted stock that Malone is expected to spin off.

Even without the colorful Karmazin, the future looks bright for Sirius as the economy continues to rebound. The company’s service is offered in most new cars sold in the U.S., and about 7,000 used car dealers are offering trials of the service. Plus, auto sales are expected to continue to rise this year.

Sex certainly will sell for Sirius, but then again, so do a lot of things — which is why the company has survived near-bankruptcy and will continue to endure for some time to come.

As of this writing, Jonathan Berr did not hold a position in any of the aforementioned securities. Follow him on Twitter@jdberr.

Source URL: https://investorplace.com/2013/01/sirius-xm-radio-gets-kinky/

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