DETROIT -- Sirius Satellite Radio's deal with controversial radio host Howard Stern should help convince more automakers to offer its subscription radios as an option in their vehicles, analysts said on Thursday.
Many automakers, such as Ford Motor Co. and Toyota Motor Corp., have yet to make satellite radio widely available as an option in their vehicles. Sirius rival XM Satellite Radio Holdings Inc. has Toyota testing its radios in some vehicles.
Stern, the popular "shock jock" whose raunchy humor raised the hackles of federal regulators and commercial broadcasters, may help Sirius with the Japanese automaker, which has not signed an exclusive deal with XM radio, said Kit Spring, analyst with Denver, Colorado-based Stifel Nicolaus.
"The Stern announcement increases the likelihood that Ford goes ahead with a factory install program... and could be potentially announced at the Detroit auto show in January," Spring said in a note to clients.
Ford, the second-largest U.S. automaker, said it was looking at offering Sirius radio as a factory-installed option in future models. Ford dealers currently install the radio in about 11 models if customers request it.
The installation of radios in new cars is seen as a key growth area for both Sirius and XM.
Sirius, which agreed to pay Stern $500 million to switch to the satellite radio beginning 2006, lags behind XM in subscribers and exclusive ties with automakers. XM has a head start in auto subscriptions with General Motors, offering XM receivers as an option on most new cars.
"We believe the automakers and consumer retailers will now make a stronger commitment to the Sirius brand," said David Kestenbaum, analyst with IRG Research in a note to clients.
The Chrysler group, which offers Sirius radio in most of its top-selling 2005 model year vehicles, said Stern's decision will boost the popularity of the option.
"We would expect Howard Stern's move to Sirius to be very positive overall and to be a boost for Sirius subscriptions in some of our more useful vehicles such as Jeep Liberty," said Jack Withrow, the Chrysler group's director of vehicle entertainment and communications.
The Chrysler group is "bullish" on the potential of Sirius to lure consumers, Withrow said.
Sirius, which has about 600,000 subscribers, is expected to add 3 million subscribers from Stern's 12 million-strong listeners, according to analysts. Stern is ranked No.1 in 46 large markets across the United States.
Sirius said it will make Stern's show part of its $12.95 monthly service.
