5/13/13: Slacker reports big growth following its relaunch and Pandora's mobile cap

Paul Maloney
May 13, 2013 - 10:55am

Webcaster and on-demand subscription service Slacker last week revealed it's reaping the fruits of its February relaunch in the form of surging audience growth. The company also claims it's attracting Pandora users shut out by that company's recent 40-hour/month listening cap on free mobile streams.

What's more, CEO Jim Cady says his company is "gross margin profitable" on every listener in part because "direct" royalty deals have made it less expensive for Slacker to license music than for its competitors.

In a press release, Slacker says since its February relaunch (including a redesign of its web site and mobile apps), more than six million new listeners have registered, including over 100-thousand paid subscribers. And the amount of time the average user listens has jumped 25%. Among new listeners, 3.5 million listen via mobile devices. Its user penetration on Apple devices has more than tripled.

Slacker partners for content with ABC Radio. Its general manager Steve Jones told USA Today, "Our audience has grown 3% to 4% every week since February. We're thrilled."

And they're ready to bring on even more users. According to paidContent, Slacker is close to sealing a deal with "a major telco provider" -- a move Cady predicts could be worth "millions of paid subscribers" to his service. Last week we covered news (here) that Slacker had entered a partnership with Vodaphone which would enable them to enter the UK market, but it's not clear if this is the deal of which paidContent wrote.

Early in March, leading webcaster Pandora announced, as an effort to reduce music royalties, it would limit mobile listeners to 40 hours per month of free, ad-supported listening (paid listening by subscribers is not limited, nor is listening on Pandora.com). While services make significantly less on advertising to mobile listeners, music licensing costs remain the same -- meaning heavy users of free ad-supported mobile streams are hardest to monetize for webcasters.

Cady says his service has gained listening partly due to Pandora's move. Adding to that, he tells numerous sources (like VentureBeat), Slacker's "proven business model" enables Slacker (unlike Pandora) "to monetize users with free accounts" -- even mobile users.

First, Slacker simply runs more ads than Pandora. Wedbush Securities analyst Michael Pachter explained this to USA Today: "Slacker is one-sixth the size of Pandora, and both run ads. Slacker does three minutes per hour, Pandora one per hour. It's that simple."

But perhaps even more interesting is that Cady (pictured) says his "direct deals" with record labels and publishers save the company big money. Slacker told Evolver.fm it doesn't pay SoundExchange -- the music industry body that collects and distributes royalties for those services that operate under statutory licenses. Slacker claims their direct deals enable them to pay a lower royalty than do SoundExchange customers (like Pandora).

Slacker, which launched its digital music service in 2010, has raised $50 million in investment. The company also recently expanded its operations, opening offices in Palo Alto, CA and New York.

Read more in coverage from paidContent here, USA Today here, VentureBeat here, and Evolver.fm here.

Paul Maloney
May 13, 2013 - 10:55am

Clear Channel says it's topped 30 million registered users of its iHeartRadio webcasting platform, hitting the milestone in under two years since launch. The company says that makes iHeartRadio second only to Instagram as the fastest-growing digital service in Internet history.

While listeners can tune in to iHeartRadio broadcast streams without registering, registration is also free and not all accounts are actively used. This makes the "30 million" number a poor indicator of the service's reach.

Clear Channel says the iHeartRadio mobile app has been downloaded 175 million times, and more than 60 million monthly unique users come to the service across its digital network.

Paul Maloney
May 13, 2013 - 10:55am

Triton Digital has joined industry group NARM and its digital initiative digitalmusic.org to "further progress the digital audio industry."

NARM is the National Association of Recording Merchandisers.

"At NARM, our goal is to advance the promotion of music by providing our members with insights and education to support their business models," said Jim Donio, President of NARM.

Mike Agovino, Chief Operating Officer of Triton Digital, said, "We are in exceptional company and look forward to working as one to shape and transform the digital music industry through innovative technology and meaningful connections."

Triton Digital is a digital service provider for traditional and online radio. The company is a sponsor of our upcoming RAIN Summit Europe event, May 23 at Hotel Bloom in Brussels. CCO and general manager of data and measurement Rob Favre and SVP and general manager of international markets Jay Supovitz will participate in panel discussions. Info and registration links are on the RAIN Summit Europe page.