More ads, lower music costs make Slacker "gross margin profitable" on every listener, it claims

Monday, 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 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 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 here.

Slacker reportedly partners with Vodaphone to enter UK market

Wednesday, May 8, 2013 - 1:00pm

According to MusicWeek, popular (and growing, see today's top story) pureplay webcaster Slacker will reportedly launch in the UK within the next three months.

Such a move would make Slacker the largest U.S.-based Net radio outlet available there (Pandora is not licensed in the United Kingdom).

Slacker will come to Britain by way of a partnership with Vodafone, the world's second-largest mobile telecom company.

You may remember that Slacker "relaunched" earlier this year, with a new look, new features, and an ad campaign positioning itself as an alternative to market leader Pandora. It also recently added voice personalities to some of its channels. The article sources Slacker president and CEO Jim Cady recently revealing that "Session listener times on Slacker without a host have been averaging around 29 mins, but with a host personality or presenter session listening is growing to around 79 minutes."

Read the full article here.

AOL Radio will reportedly survive AOL Music closing

Monday, April 29, 2013 - 12:00pm

Word began to leak on Friday afternoon -- via former employees on Twitter -- that AOL Music has shut down.

AOL Music's rock news property Spinner (itself an early pioneer in online radio) will reportedly continue to operate AOL Radio channels. Spinner editor Dan Reilly first began to tweet about staff layoffs early Friday afternoon. AOL Radio program director Thomas Chau later tweeted to clarify that AOL Radio would not be part of the closings.

At one time AOL Radio music streams were featured on CBS Radio's platform. In October of 2011, AOL Radio channels instead became available within Slacker's interface (see RAIN here).

AllThingsDigital reminds us of "Microsoft’s (2006) shuttering of MSN Music, while Yahoo closed the doors on its Yahoo Music services in 2008, as well as shutting down its MusicMatch service the year prior (just three years after acquiring it in 2004 for $160 million)."

Read more from AllThingsDigital here and Mashable here.

Slacker puts newly revamped service (plus a new station) on Xbox360

Wednesday, February 27, 2013 - 12:20pm

Webcaster Slacker has launched its service on Microsoft's Xbox360 gaming platform.

U.S. and Canadian Xbox LIVE subscribers can now access Slacker's full service, including hundreds of "expert-programmed" Internet radio stations.

Among those stations is a brand new stream dedicated to videogame music, hosted and curated by editor Dale North. The station streams selections from the soundtracks of well known videogame franchises like Halo, Gears of War, and Final Fantasy.

Earlier this month Slacker relaunched and redesigned its entire interface (more in RAIN here), including new mobile apps and improved user functionality. Accompanying the launch was an online video ad campaign that positioned the webcaster against sector leader Pandora.

Slacker promotes Isquith to head content programming

Wednesday, February 20, 2013 - 8:20am

Slacker SVP/Strategic Development Jack Isquith has added "Content Programming" to his purview by way of a promotion.

Last week Slacker relaunched its Internet radio service (RAIN coverage here) with new web and mobile interfaces, new functionality, and a web video ad campaign that touted the "human element" behind its music programming (clearly a shot at Pandora and its Music Genome).

Previous to joining Slacker in 2011, Isquith Executive Director of AOL Radio, and Warner Brothers Records SVP/Digital Music.

Slacker's new positioning focuses on "human element" of its music programming

Wednesday, February 13, 2013 - 12:25pm

Webcaster Slacker today relaunched its service, including new features and new visual design for its web interface and mobile apps. And to promote the relaunch, Slacker today rolls out an online ad-campaign positioning itself against market leader Pandora.

"The idea is that regardless the on-demand offerings of services like Spotify and Rdio, users don't really want to think too hard about listening to music most of the time," news source Gizmodo surmises. "They want radio—and radio in the truest sense, which means you put on a station you like and let a DJ who knows what they're doing take care of the rest."

CEO Jim Cady said, "We’ve quietly built a scaleable business with more than a half-million paying subscribers and more than four million monthly average users. 2013 will be a blockbuster year for Slacker as we ramp up our marketing efforts and take the service to a broader audience."

Gone are the complicated controls and black-and-gold design. The site and apps (the mobile app functionality was clearly built alongside the site, as they mirror each other) are a simple blue and white (with orange), and navigation is cleaner and more intuitive.

But Slacker's showcase features are the "more than 200 expert-curated stations," and its new "Fine Tune" system. Listeners can customize their stream on the fly using either a "word cloud" of song tags, or graphical sliders which adjust what they hear (much like SiriusXM's new MYSXM web stream here). Via the sliders, the listener can vary the amount of "deep cuts," artist recommendations, and new music that comes up.

The New York Times reports that Slacker will begin running its online-only spot Wednesday, in which "a young woman at a coffee shop vexes everyone in earshot when she opens a blue 'Pandora’s box' — labeled 'P,' like Pandora’s app icon — and unleashes a singularly annoying song.

"'It plays that over and over again,' the woman complains to a friend, who blames Pandora’s 'small music library' for the repetition. With Slacker helpfully loaded on her phone, the friend points out that Slacker has 10 times as many songs, and other features, too."

Slacker CMO Craig Rechenmacher told the paper, "We had to be very honest with where we were in the marketplace. We had to be disruptive in the marketplace, and we needed something that targets our competitors and the holes in their service."

Former MOG CEO David Hyman commented, "It costs a lot of money to build a brand if you didn’t hit it luckily through viral channels, like Pandora did."

Gizmodo seemed pleased with the new Slacker. Its reviewer wrote, "Specialty stations like 'Dive Bar Jukebox' that mix up contemporary indie, with soul classics and 80s new wave are just way more fun than anything Pandora, Spotify, or anyone else has to offer."

Slacker is allowing free access to its premium service on Thursday and Friday.

Read more in Engadget here, Gizmodo here, and The New York Times here.

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