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Slacker.com Hopes to Lure Upset Radio, Satellite Listeners

There's no question that technology has forced traditional media to re-examine marketing models. The Internet continues to gut print journalism, while network television and its local affiliates fight ratings declines and a viewer's ability to fast-forward through commercials thanks to digital video recorders (DVRs).

Terrestrial radio is not immune to new entertainment options, either. Stale music formats with long commercial breaks have frustrated listeners who want more control. MP3 devices have probably been most responsible for cutting into radio's listening monopoly, while Sirius XM satellite radio, with its nearly 20 million subscribers, has put an actual number on terrestrial-radio disenfranchisement.

But Slacker.com believes there's still a niche to capture, most notably on the music front, and hopes its new portable-listening device, the G2, will take hold.

It's an extension of the Web site, an Internet radio portal that allows users to play a role in programming the music to which they listen. Rival Pandora.com has successfully integrated the same concept, with positive reviews from users. The goal is to take advantage of the MP3 process, but to do so in a more traditional radio style, with more personalized listening options.

"There's so much work involved in the personal music experience, so we went with the very obvious laid-back approach to the company," said Jonathan Sasse, Slacker's vice president of marketing, regarding the Slacker name. "To push a button and just have music play is what makes radio so great. It's something the MP3 world has completely lost.

"We have programmed genre stations with handpicked playlists. We have about 110 stations like that. About half of our listeners listen to the genre stations. They might tweak (them) a bit and move around songs, but for the most part, they take in the ultimate laid-back experience: 'I like Top 40.' 'I like country.' And that's what they listen to. They're very genre-driven radio listeners. The other half are listening to some bit of custom stations, where they're listening for specific artists or going all the way and creating custom stations based on the artists they like."

I own a G2; I bought the 8GB portable player for $250 online. It took a month to get here, because the Slacker folks said there was a backlog at the warehouse. As a result, they added a car charger and removed the $10 shipping fee. All told, it's a pretty darn cool device: It's extremely small and lightweight, about the size of a typical cell phone, with Wi-Fi that allows me to update the playlist through Slacker.com every time it's in range of an open wireless network. The version I own programs up to 40 stations; a smaller 4GB version allows users to program up to 25 stations.

The G2 is not perfect. I wish it had a preset function for favorite radio stations, as opposed to the toggle wheel on the side. Enhancing its capabilities in a car would be helpful as well. As it is, I lay the player on a seat and plug it into an auxiliary jack.

That said, it's clearly a better option for me than enduring the redundancy on terrestrial radio. Terrestrial's high-definition inclusions have hardly made a dent in listenership, with the stations relegated to secondary frequencies that most radios still can't access; these high-def stations are often programmed with little effort--basically, a switch is flipped, and the station streams a slightly less-generic format.

Meanwhile, the merger of XM and Sirius has many music fans up in arms. Many of the XM stations are gone, and for those who like variations in hip hop, that format has been all but gutted. It's hardly the à la carte model promised when the satellite-radio merger talks dragged on with the Federal Communications Commission.

Even though a portion of satellite radio's nearly 20 million subscribers are irked with Sirius XM's current music direction, it's not like they're flocking back to traditional radio.

Slacker, meanwhile, is working to take advantage of the discontent. I listen to a lot of progressive rock, a format XM once had but scrapped from its portable system years ago--and Slacker has a prog-rock station. I've also found the service to be a good educational tool, allowing me to better study unfamiliar bands without breaking the bank or spending a great deal of time.

"We're getting direct feedback from listeners who are new to Slacker who are disenfranchised, whether it's subscription fatigue, or their favorite stations are no longer there, or they aren't what they used to be," Sasse said. "We're definitely getting people coming in, and we're getting tremendous feedback from people who have discovered Slacker who have found stations they think are better than before, plus they're able to build their own if they really want to. Some people could pay upward of $60 a month for multiple satellite subscriptions, and they were still getting advertising; they were still getting a limited experience, and they could come to us for free if they wanted to, and listen to us and make their own station.

"Those people really get it. They went to satellite for a better radio experience, something better than what FM was giving them. Now that it's not filling the same void, they're coming to us and getting the next step up: unlimited stations and a very flexible payment structure."

Slacker is free for those who just want to listen online, and Slacker claims some 6 million do.

"Comparatively, there's a much smaller percentage that pays with a subscription or through hardware, but at that point, it doesn't have to be a huge percentage," said Sasse, who notes that Slacker has license agreements with major music labels and publishers. "The whole business is built on a population of free listeners who build the ad model, and a small percentage who subscribe and buy the hardware."

Sasse adds that Slacker is pondering the prospect of adding talk-radio options down the road.

"At some point, we'll move in that direction, for sure," said Sasse. "We're aware people want it, but we're going to stick with the music piece for the foreseeable future. I can certainly tell you today: We're not trying to land Howard Stern any time soon."

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