Introducing Slacker, a new kind of Satellite Radio company
Debuting this week at SXSW, Slacker is sure to ruffle some feathers as they look to combine satellite radio, a digital audio player, and custom WiFi radio - all into a single sleek device.
A new satellite radio company? But how? The FCC only granted two licenses right? According to CNET, Slacker's radio service is powered by their own proprietary technology that takes advantage of unused commercial satellite signals to send data. A soon to be released car-kit enables the listener to receive the satellite signal which works together with the Slacker portable device (pictured).
Former Rio CEO turn president of Slacker, Jim Cady, said that at first, the company considered a "more satellite-radio-specific (model) as a direct competitor with Sirius and XM. But it morphed into something much broader than that."
First there's the Slacker Web radio service, which is completely free (and actually pretty cool). Rather than being supported by audio ads, they monetize on the traffic with video ads. If you rather not have ads, then it's just $7.50 per month. The Slacker Web radio service uses AAC Pro v2 to encode the audio.
Then there's the Slacker device. Little is known other than it will range in price and capacity - from $149 to $299. (The first version is expected to have 2Gb of flash memory.) The Slacker portable sports a 4-inch color display and it will support MP3, WMA, WMV and MPEG-4 files - and (unlike Zune) it supports subscription WMAs from other services, as well as video playback. With the WiFi support you can bounce in and out of unsecure connections and listen to the same free Slacker service.
The satellite radio car-kit will be available later this year. Pricing and features are unknown, other than you can connect the Slacker portable and play through your car stereo. No word on the pricing of the Slacker satellite radio service itself either.
So why's it called "Slacker"? Because the service is meant to be effortless. DJs control the broadcasts, but you can vote (using a "heart" or "ban" icon) whether you like the song or not. Free users can only ban songs six-times an hour (hearting is unlimited) while paid users - who also are spared the ads - can ban as much as they like.
Users of the radio service can republish any of their customized music channels to any blog or Web site - an incredibly cool feature (and a smart way to appeal to online influentials). Slacker claims to be immune to the recent Internet radio royalty shenanegans, though I don't get exactly how.
This looks to be interesting, and quite ambitious, and Slacker has a repertoire of digital music veterans from both the device and subscription service side to help them on their way. Slacker's CEO, CFO, VPs and chief counsel held the same positions at MusicMatch, and the rest of its roster is filled with former Rio, iRiver and Yahoo Music execs. Slacker has, so far, raised $13 million in series A funding.
Will it be a success? Analysts seem skeptical. "Any new company, including this company, needs to come into this market with modest expectations to start with," said Susan Kevorkian, an analyst with IDC.
Then there's the iPod which gives a "a portable-CD-player-type experience--a much, much, much better portable CD player--but it doesn't give you access to radio or an on-demand experience," said David Card, senior analyst at JupiterResearch.
"You look at Rhapsody and Napster; they're subscription services that give you on-demand, (but) not much momentum on the device side. It's kind of like the supply side of things is all scrambled right now," Card said. "There are a lot more people that listen to the radio than buy music regularly. In theory, they're tapping into a very big audience. In theory, I don't know if the numbers are going to work."
But the decision to run video ads instead of audio ads leaves some question as to how sustainable the business model is. "It's kind of weird they're delivering video ads because if you're listening in the car that's seriously problematic," Card said. "Some of the pieces don't weave together gracefully."