In 2004, when Howard Stern, announced his departure from Viacom and move to Sirius Satellite Radio, people questioned how old media radio would recover. In fact, they wondered if radio as we knew it was on the verge of dying. The Associated Press reported that NASDAQ shares of Sirius rose 60 cents while Viacom, on the New York Stock Exchange, fell 49 cents. It did not take long for me to wonder if satellite radio would be the next hottest media outlet. Thus, I asked a major money manager what he thought about my purchasing some Sirius stock. He asked me if I or anyone I knew had satellite radio. Hmmm. I knew one person who had satellite radio in their car, and that was it. The advisor, putting his hand on my shoulder, said, "Eric - if you don't have Sirius and you don't know anyone else who has it, it's not the best idea to invest your money in this."
In the past few weeks, both Senators Barack Obama and Hillary Clinton have launched their presidential exploratory committees via video technology on the web. Many have written about these videos, including Washington Post's Chris Cillizza and Dan Balz, commenting that the "2008 presidential campaign is likely to be remembered as the point where Web video became central to the communications strategy of every serious presidential candidate." We have come a long way since Al Gore claimed to have invented the Internet. In 2004 Howard Dean and Joe Trippi put the word "blog" into Webster's Dictionary. In 2006 we saw the world of YouTube destroy Virginia Republican George Allen's hopes of being re-elected to the United States Senate. For a couple seconds I thought the candidate's videos would be the next best thing as everyone was talking about their changing the way campaigns are conducted. Then I remembered my conversation about Sirius Radio: I had never seen the videos on line and only knew about them because of the media outlets that have been written off: television and newspapers.
Enough about YOU. Let ME tell YOU about MY friends and ME. I am still in college, living in Washington, D.C. for the semester, majoring in government. I think of myself as tech savvy, recently acquired a BlackBerry and am a card carrying member of the "iPod listening and blog reading" club. I follow news as if my life depended on it. My friends are pretty much the same way (but they do make fun of me for the BlackBerry). Yet, I first heard that Clinton was running when I flipped on CNN the morning of her announcement. Many friends read about the candidates announcements in the newspapers, but I could not find anyone who actually watched both videos. I read Rachel Sklar's "Obama's Running for President - And He told YOU first" post before I actually saw the video. Obama didn't tell me - my television (and then Eat the Press) told me.
While there is no doubt that the Internet has changed the face of politics, politicians still need that "old media" which everyone has moved on from. A video might be placed on the web, but if it does not receive any play on television or is not written about in the newspapers, what good is it? TVWeek's Ira Reinowitz wrote "If candidates and political action committees snatch all their political advertising slots, they'll likely turn to the Web." See! Even campaigns are going for television adds (which have been considered dead as well), before they turn to the Internet.
Bottom line: don't buy too many shares of stock in those Internet videos. Just as Gore did not invent it, 2008 will not be the year the Internet revolutionizes the political process any more than it already has. Today, two years after Stern went to Sirius, hardly anyone I know has satellite radio, and the only person I know who saw the Clinton video (but not the Obama one) is someone who works for the Senator.
The day Sirius obtained Stern the stock price was $3.95. Last Friday it was $3.68.