Sirius XM Radio: The cult of Howard Stern

In the classic cult, minions flock to a strong and charismatic leader who thinks differently and holds distinctive and disruptive ideas. That's what you have with Howard Stern, the popular radio personality, says Antonio Marazza a general manager at the brand consulting firm Landor Associates and co-author of Lifestyle Brand.

The strength of Stern's personality helps explain why shares of Sirius XM Radio (SIRI.O), the struggling satellite radio company, have doubled since late 2010. You can listen to him only via Sirius. "You would be hard-pressed to find someone else in entertainment who has been a license to print money as long as he has," says Scanlon, of the John Hancock Balanced Fund.

(Unfortunately, Stern zealots who initially followed him into the stock above $5 are still hurting, since the stock trades for around $2.30.)

It helps that Sirius has landed other figures with their own followings, including Oprah Winfrey and Martha Stewart. Sirius also has some strengths as a business. It offers exclusive content with very few ads. And Sirius XM Radio is available for free for a few months in more than half of all new cars. So, as car sales rise in an improving economy, subscriber growth will increase. And of course the satellite radio hardware stays in cars as they move to the second-hand market, contributing to subscriber growth, points out Scanlon.

Still, detractors have long argued that regular free radio and digital music leave no room for satellite radio and Sirius. It helps to have a cult that insists the detractors are wrong.

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