Okay gang. After two weeks of hype, we here at the Free Line proudly present our interview with Jonathan Sasse, Senior Vice President of Marketing at Slacker. Special thanks go out to Seana Sullivan, who helped make this interview possible. With that said, here we go…
Andy Mancini: What exactly is Slacker?
Jonathan Sasse: Slacker is a radio music service. We deliver music to our listeners for free at our website at Slacker.com. We have licenses with the major labels and publishers along with thousands of independent labels and publishers as well. We have about a million songs in our library.
Now there are a couple of different ways people can listen to music on Slacker. You can come to the website and choose one of our genre stations that are hand programmed by music professionals from across the country. You can then tweak the station so it would be more like what you prefer. You can either rate songs by marking them as favorites or banning songs or artists that you don’t like, or you can go and edit a station. You can even go and make a very custom station with hundreds or dozen of artists. There are a number of choices that you can make to make the station more like what you like. We also have a free service that you can listen to for as long as you like.
AM: Aside from the website, where else could users access the service?
JS: We have players on the Blackberry and iPhone. We also sell hardware devices that let you take the same, free music experience with you on the go.
AM: Aside from the radios, what sets your company apart from the other radio services?
JS: Everybody has a different philosophy about how to deliver content to people. We tend to be more like traditional radio in the sense of how we program things. Your radio experience will be driven more in the sense of a “breadth of programming” that stays somewhat relevant to what you are looking to listen to. Our selections, especially in our genre stations, are hand picked from someone who knows the genre very well. They might be a former or current terrestrial radio programmer, or they could have come from satellite radio. Either way, these are people who know their genres very, very well and they are selecting songs that are appropriate for that genre.
The difference between that and a terrestrial and satellite station, though … When you talk about “broadcast radio,” their playlists and set lists are going to be set up for when you’re more likely to be listening to the station. [Because of this], their stations tend to be a bit narrower. They’re on a heavy rotation to make sure that you are hearing certain popular songs that you expect to hear. They don’t know exactly when you’re listening, so they have to keep the rotation pretty small. You end up not getting a good music experience with broadcast radio. With our site, since it’s programmed essentially for each individual person, it doesn’t matter when you may or may not be listening. You are always going to get a unique experience for you.
Against online radio … There are a number of different things. There are some sites that just play music. There are others that do “sounds like…” selections — if you like a certain song, you might like this song because they sound similar. What we do is more based upon popularity and artist relationships, along with our DJ’s influence. So you’re going to get a very personal touch from a very deep library.
AM: Do you see Slacker as being a viable competitor to more traditional, “over-the-air”-based products like terrestrial radio and satellite?
JS: We are certainly a strong alternative to those [technologies]. If you’re listening to broadcast radio today, and you’re listening to music, we’re a good alternative. You’re going to get a better music experience for sure. The question then becomes “can we provide it in the same way, or in the same places that you listen to that content today?” That’s probably our biggest gap.
AM: Has Slacker benefited from disaffected satellite radio fans angry over the merger of Sirius and XM?
JS: We’ve seen a tremendous amount of traffic come to us from the merger, [due to the] fallout from stations that might have been cut of formats that might have been changed. [Many are] looking for that kind of experience that they used to have with XM and Sirius. That [experience] may not exist today in the way that they may have liked previously. We’ve seen them come to us, as we don’t have limitations on our number of stations.
AM: What sets you apart from the more traditional radio providers?
JS: Whether it’s FM radio, HD radio, or satellite radio … The one thing that they share is that they’re broadcasting one content to everybody. There’s no personalization that happens there. Obviously, one of the biggest downfalls in FM radio is the lack of selection and the quality of the content. HD radio improves the sound quality and the number of channels, but there’s no “personal touch” to it. It’s still very limited. They can’t have hundreds or thousands of stations that they can play for different people. And XM/Sirius … Both previously and with the merger now, there are bandwidth limitations. You’re going to have some suffering of audio quality, but you’re also going to have a limited number of stations to choose from. That’s always going to be a problem with that kind of delivery mechanism.
AM: The “Internet radio” stereotype is that of a geeky person in his or her basement, playing nothing but Japanese pop songs or obscure Frank Zappa records on their own private SHOUTcast station. How does your company combat that image?
JS (chuckles): A lot of things have changed. As Internet radio emerged, what you described was quite common. You’d get these kind of obscure streams of music or other content. Some of that of evolved into podcasts, and other parts of that content evolved into “personalized radio.” One of the big changing factors there was the evolution of digital music players. Whether it was mp3 players or digital music services … it definitely [removed the image of needing] to be a technophile in order to enjoy music like that. It started bringing more of a mainstream audience into that type of a platform.
Now the problem is, with the “mp3 player” architecture … It’s certainly something that’s very personalized, which is something that radio had never had before, but it is a lot of work. One of the things that made Internet radio so great was that it was pretty easy [to use]. That’s what makes radio great in general. All you have to do is push a button and the music just plays. You don’t have to go get music. You don’t have to manage music. You don’t have to rip CDs or plug in USB cables and all these other things. It just happens. Now behind the scenes, there’s work being done for you, but you don’t have to do it. [Slacker] has kind of merged these worlds together a bit. We’ve taken the very highly personalized mp3 player experience and the playlist experience that you get with that, and merged it with a radio experience that is very easy and powerful. Our name kind of implies that as well. We take the “work” part out of having a great music experience.
AM: Online player aside, which is a “bigger priority” of the company: the radio or the mobile programs?
JS: First and foremost, our priority is around “service.” At the end of the day, we’re still a music radio service. That’s what we do. It’s personal radio. The fact that we have our own hardware that we’re available in other types of hardware is really just a way to make sure that people have greater access to Slacker content. So as we move to the iPhone, the Blackberry platform, our own Slacker hardware and to other hardware that supports the Slacker service, even to Sony television and Logitech streaming devices … It’s to further enable our listeners to have a chance to get Slacker where ever they go. In the long term, that’s what we are. We are a radio music service company, and we will enable as many platforms, partners, and devices as we can.
AM: Was it difficult negotiating with the major record labels?
JS: Certainly. There’s a challenge to creating new types of licenses and new types of content delivery. To their credit, I think the music industry has been embroiled in this challenge of delivering music to people over the Internet longer than most. The video and motion picture companies are just getting to it themselves. But the music guys have been around long enough to see where the pitfalls and challenges are and when they need to step up. The type of solution that we were proposing seemed to [point at] the direction that the industry was [moving towards]. We have experience working with the labels. We have worked with them as parts of previous companies, so knowing [them] is a key component. As you’re going into the business of delivering music, having the content owners and publishers in support of what you are trying to do is certainly better than creating enemies.
AM: Are there any currently any record label “hold outs?”
JS: No, not really. We’re constantly working with smaller labels and emerging labels to make sure that they know how to put agreements into place with us. That is going to be an ongoing process. We’re constantly securing new content for the service. But at the end of the day, every major label, even the “second tier” of the larger labels, distributors, and independents are all on board. At this point, all of the major content is already in the system.
AM: How does the free service contribute to the overall “bottom line” of the company?
JS: There’s a number of things. One thing about [offering a] free service is that it gives our customers and listeners a very easy way to come and experience something, whether its a music service or otherwise. The opportunity to have people come in and start listening to music, creating stations, and experiencing what we have to offer without having to pay anything or get into any long-term agreements certainly helps “expand [our] universe.” We intentionally set up our business model and our revenue streams to make sure that there’s revenue opportunities for us [in the free service, while setting] up a great experience for our listeners. I think that that is really the key. Certainly you can go in a say “this is a subscription only service,” [but then] the cost to acquire customers goes way up, your total audience goes way down, and you have to be extremely successful in bringing new traffic in and monetizing them right away. In this case, we have millions of people who enjoy listening to the service. They become advocates of the service. It changes the way they listen to music, which is an important step for us. The more people we have [listening and talking about the service], the better it is for both the company and the industry as a whole. The free service is a great way to get that audience expanded. As long as we have revenue opportunities, whether its through advertisers or from free listeners who are looking to purchase hardware or what have you, [we're fine.] It’s an ecosystem that works.
AM: While doing my research for this interview, I ran across plans for adding a “satellite” service. According to the write ups, the system would allow radios that are not near WiFi access points to refresh their playlist. Is this something that your company is still interested in doing?
JS: It’s technology that we have. The one thing that we found is that if you look at the world as a whole, there’s a number of regions that are not as connected. Certainly there are some “very” connected places from a wireless perspective — most of Asia, Europe, the United States — where the major markets have great WiFi access in some form. There are other parts of the world that just don’t. In some of those areas, there’s a growing need for something like a satellite distribution model. You can turn on entire regions of the world just by broadcasting satellite content and smartly caching it. What we’re focused on right now is on the US market. We’ve seen the [the expansion of] WiFi networks. We’ve seen the popularity and ubiquity of 3G networks on the mobile side increase. What we can do now is deliver a great Slacker experience in both the United States and North America [in which] the satellites are not as critical to the system. As we “step out” to different parts of the world, it could be something that becomes a bit more important to us. But certainly today, in our market, we can rely heavily on wireless and 3G for content acquisition. Because of that, the satellites become a little less relevant.
From our perspective, it doesn’t really matter what the network type is, be it satellite, a WiMax network, 3G, EDGE, CDMA, WiFi or what have you. [Right now], we sort of cache content ahead of time — sometimes thousands of songs in some of our hardware models — so you can listen without any sort of connectivity for weeks or months at a time. In the other case, if we have potentially a 3G or a WiMax network, we can have live access to content, or even caching it in a hybrid model. As the networks evolve and the connected markets grow, those type of connections are something that we would probably use. Again, from our perspective, it doesn’t really matter right now. We have Blackberries that have 3G and WiFi connections and the ability to cache content to SD cards. We take advantage of all of those opportunities to make the experience better. And as better networks emerge, we’ll use those as well.
AM: I noticed that your company recently released a home dock. Are there any other peripherals in the pipeline, such as a car dock?
JS: We’re always looking at different opportunities there. The car is an appealing place to be. Slacker is great in the car. Getting the music into the car is the next tricky step. There are plenty of aftermarket opportunities out there. We’ve looked at everything, whether it’s Bluetooth receivers or FM transmitters or line-in methods to your auxiliary port. The home dock that we released is certainly a step forward in that. The home dock is flexible — I got one in my car and it’s actually fairly convenient. There’s no “magic bullet” for the car when it comes to getting a device to [work properly]. Again, we are evaluating ways that would make the car experience even better. I think that you’ll be hearing something from us in the future on that front.
AM: Once again, thank you for the interview.
JS: Thanks for your time.
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Friday, July 3rd, 2009
