Shock jock Howard Stern said Wednesday that he will move to satellite radio in 2006, launching what may be the biggest challenge to traditional radio since the arrival of television and freeing himself from government regulators.

Stern, whose salacious show reaches more than 12 million listeners in 46 markets, will move to Sirius Satellite Radio Inc. The fledgling subscriber-based radio system has been scratching for the right mix of content that will entice listeners to shell out $12.95 every month.

He’s not coming cheap.

Sirius is paying roughly $500 million over five years to land Stern and all of his sidekicks from Infinity Broadcasting, the nation’s second-largest radio station owner.

But some industry observers say it is worth it. The satellite industry is counting on Stern’s reach to help push it into the mainstream, much in the same way that pro sports and HBO helped cable TV muscle into broadcast TV’s territory.

Wall Street liked the gutsy moved, too. Shares of Sirius’ stock leaped 15 percent.

“Satellite radio is going to take its place as a mainstream force, and it may surpass AM and FM,” Michael Harrison, of the monthly trade publication Talkers, told the Associated Press.

“It’s very intriguing,” added Norm Winer, longtime programming chief at rock station WXRT-FM. “People have been speculating that all you need is for Howard to make that move to revolutionize that media.”

Sirius, like its only competitor XM Satellite Radio, offers subscribers 120 commercial-free radio stations that serve up a huge variety of musical genres as well as sports and news. To subscribe to the service, users have to buy specialized radios, either for the home or their cars.

Some die-hard fans on Wednesday were already planning to buy satellite units – as well as shares in the company.

“I actually bought stock (in Sirius) this morning,” said Tracy Hickman, 38, an interior designer in Chicago who plans to become a subscriber when Stern’s show becomes available. “I think most of his listeners will. He put talk radio on the map. He’s going to put satellite radio on the map in a different way.”

Sirius Chief Executive Joseph P. Clayton called signing Stern the “most exciting and transformational event in the history of radio.” Stern is “capable of changing the face of satellite radio and generating huge numbers of subscribers for Sirius.”

“It’s certainly an important acquisition for them,” said Harvey Wells, the former general manager of WCKG-FM, which carries Stern’s show in Chicago. “Satellite radio needs to throw some long touchdown passes to gain any kind of traction.”

For his part, Stern said he was frustrated by the Federal Communications Commission’s recent crackdown on radio and television content.

The FCC increased scrutiny after this year’s Super Bowl telecast in which Janet Jackson briefly exposed her breast during the live halftime show.

Since the crackdown, Stern’s raunchy show drew the FCC’s ire. In June, Clear Channel Communications Inc., the nation’s largest radio station owner, agreed to a record $1.75 million fine to settle indecency complaints against Stern. It had already dropped Stern from its lineup, fearing more fines.

Since then, Stern has dialed back a bit, avoiding certain words and phrases.

But the shock jock also stepped up his threats to leave, complaining that the FCC and the White House were unfairly targeting him and other radio personalities.

Because it is a paid service, satellite radio falls outside of the FCC’s jurisdiction.

Though Viacom, which owns Infinity Broadcasting, said Stern’s departure will not affect the company materially, his departure could dramatically alter Infinity’s business strategy, which has acquired news and other talk stations that line up with Stern’s mostly male audience.

In New York and Los Angeles, where Stern’s shows draw big ratings, the advertising fallout could be significant. His show in Chicago draws a lower rating and ad revenue is not as significant.

“It was always hard to sell the Stern show here,” said one Chicago radio executive who worked on selling the show in Chicago.

Still, analysts said Stern gives satellite one of traditional radio’s dwindling assets: a known personality that can attract an audience – something that can not be found on iPods – digital music recorders – or the Internet.

“You want to have something that people can’t get anywhere else,” said Jimmy Schaeffler, CEO of technology and media research firm The Carmel Group.

Both companies have been paying significant fees to get content.

Earlier this year, Sirius signed a $200 million deal to get National Football League games. And XM signed up former National Public Radio news host Bob Edwards. XM also hired shock jocks Opie & Anthony, who were fired from their WNEW-FM program in New York after they claimed to broadcast a couple having sex in St. Patrick’s Cathedral.

How much damage the self-proclaimed “King of All Media” can inflict on the rest of traditional radio remains to be seen.

At only 600,000 subscribers, Sirius, as well as the bigger XM Satellite, remains a money-loser. It has said it would need at least 2 million subscribers to break even. It’s hoping that Stern will bring in at least 4 million.

XM currently has 2.5 million subscribers.

Locally, radio executives in town are comforted by the fact that their stations still provide a local connection to the community that satellite cannot.

“It’s probably not a threat in a city like Chicago where you have a spectrum of alternatives, said WXRT’s Winer, noting the popularity of shock jock Mancow Muller on WKQX-FM.

And satellite may still have to pick off a number of other programming entities from traditional radio before becoming the major threat.

“Satellite radio is still a kid brother,” said Tom Taylor, editor of trade publication Inside Radio. “Two Hundred and eighty million Americans listen to (traditional) radio every week. Three million people listen to satellite radio, and that’s split among 250 total stations.

“Long term, that thing in the rear view mirror is wireless Internet broadband access. At some point, all of this goes to the Internet.”