NEW YORK ( TheStreet) -- Sirius ( SIRI - Get Report) nailed its numbers but has not yet secured Howard Stern, whose contract expires at the end of the year.

Sirius hoped to have an update on Stern, CEO Mel Karmazin told analysts on an earnings call Thursday. "The discussions continue," he added.

Sirius has been negotiating with Stern for most of the year and is expected to try to sign him for substantially less than the $500 million, five-year deal he got when he first came to satellite radio.
Howard Stern
Howard Stern

Sirius needs to retain Stern to keep the subscribers, who willingly pay for his comedy programs, and the advertisers, who help sponsor the show.

Sirius swung to a penny-a-share profit in the third quarter and added 334,727 net new subscribers in the third quarter. The pay radio shop has added 1.3 million new paying customers in the past year for a total of 19.8 million users.

"We are in a position to soon surpass 20 million subscribers," Karmazin said.


Speaking to the threat of free Internet streaming music shops like Pandora and Slacker and the rise of online subscription radio, Karmazin said that conventional radio -- not Sirius -- was facing the bigger challenge.

"Today's satellite radio has gained share against terrestrial radio for a 15% market share," Karmazin said. That leaves conventional free radio with some 80% of the market and presumably more vulnerable to Internet radio and the shift in ad spending.

Looking ahead, Karmazin promised to launch Sirius 2.0, which sounds like an expansion of broadcast capacity for additional channels like a Spanish language offering and a new generation of radios with so-called personalization features.

Sirius shares were down 1.3% to $1.55 in morning trading Thursday.

--Written by Scott Moritz in New York.

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