From Digital Music News: "Ubiquitous music recommendation service Slacker has now grabbed a $40 million second round, according to information from numerous sources...

"The Series B investment follows an earlier, $14.5 million Series A, and signals an ambitious outlook by investors.

"Slacker first started rattling earlier this year [RAIN coverage here], and recently launched the desktop version of its larger vision. The system learns listener favorites through interactive radio stations, a model that resembles Pandora.

"It also bears resemblance to London-based Last.fm, recently acquired by CBS for a lofty $280 million [RAIN coverage here], though Slacker is complementing its experience with next-generation connected players...The first player is expected later this year, and prototypes reveal an oversized display that presents artist images and other metadata...

"The executive cast includes Dennis Mudd, founder of MusicMatch; Jonathan Sasse, former president of iriver America; and Jim Cady, former chief executive at Rio."

This entire Digital Music News article is online here. Another analysis of the deal from E-consultancy.com is here.




From PEHub: "If Last.fm was worth $280 million after raising just $5 million in venture capital, what about a social music company that’s raised more than $50 million? We may soon find out with Slacker Inc...

"Why would Slacker need so much cash when Last.fm got by with so little? Probably because the Slacker biz plan is a lot more ambitious.

"The initial launch was just a Web-based music player, which in many ways mirrored Pandora... Next came the desktop music player (quasi-Last.fm), whereby users could organize music already on their computers...

"Here is where the novelty comes in, and why Slacker needs so much cash: The company is creating its own WiFi-enabled mobile player device, which will allow users to take the personalized service with them on the go. Going even one step further, the Slacker device also can be enabled with a satellite linkup, so that service can be maintained even when WiFi is unavailable (like in the car).

"Now that I think about it, maybe $53.5 million won’t be quite enough… If only because it will have to compete with iTunes, Zune, Sirius/XM, etc…"

Read this entire PEHub article here.

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x Here's what we said back in March: While Slacker is a perfectly workman-like Internet radio product, the VCs behind it may be missing the point here: There is going to be no need to create a complete, separate infrastructure (leasing satellite time, branded players, etc.) to deliver Internet radio to mobile consumers, because soon ALL Internet radio properties will be available via the entire SPECTRUM of wireless Internet connectivity (WiFi, cell phone companies' 3G data networks, etc.) on a PLETHORA of devices (cell phones, smartphones, PDAs, MP3 players, etc.). Even already, loads of Internet radio channels -- for example, over a dozen AccuRadio channels that we offer in the streaming MP3 format -- are available on many millions of smartphones (e.g., Palm OS and WindowsMobile OS devices). (See mobile.accuradio.com.) And as the media players on mobile devices get better, you'll see more brands and better functionality available. -- KH x x

From James Cridland's blog: "Martin Stiksel is a quiet man. He’s balding, dresses in the understated and almost scruffy casual wear of young London companies. He speaks quietly with an Austrian accent, and smiles a lot. He’s a very nice chap...

"As of this week, Martin [pictured right] is also a multi-millionaire: £19m came his way this week in a new personal fortune, courtesy of U.S. broadcaster CBS [RAIN coverage here], when they bought the company he founded with Felix Miller and Richard Jones. That company, launched in 2002 and now with fifteen million users, is the music website last.fm.

"Of everything that’s been written about last.fm’s sale, one point has been missed, apparently: the not insubstantial point that the company has made it’s fortune by not playing by the rules...

"Commercial radio doesn’t have 'listen again'.. If you’re a fan of The Geoff Show, you can only listen to the podcast, and not the entire show, music and all... There’s no licence arranged with the RadioCentre ['formed in July 2006 from the merger of the Radio Advertising Bureau (RAB) and the Commercial Radio Companies Association (CRCA)'], unlike with podcasting, so therefore it’s difficult and arguably even impossible for each radio company to pursue a separate deal. And, because there is no deal, there’s no way to 'listen again' ...

"Sure, they recently -- very recently -- signed a few deals with Warner and EMI, but most of what you hear on last.fm’s jukebox music services is not apparently licenced. Again, last.fm has been trying to get a blanket deal for a long while, but not managed to get the likes of PPL ['a music industry organisation collecting and distributing airplay and public performance royalties in the UK on behalf of record companies and performers'] to agree. They’ve built their business on telling the record companies to go away and come back with a deal that makes sense; and producing their service anyway.

"A business that, this week, was worth £142m.

"So: commercial radio couldn’t get a licence, so didn’t launch new services. Last.fm couldn’t get a licence, but launched anyway, and built a great business.

"It’s slightly irritating if you follow the rules and pay many millions of pounds to record companies, that the record companies appear not to take action against services like last.fm -- and allow them to produce a great business while ignoring the rules...

"I note that one station has quietly launched ‘listen-again’ services within their radio player, despite the lack of a RadioCentre-brokered deal... Wonder what the record companies will do?"

Read Cridland's blog entry here.

James Cridland (pictured right) is best known as the Digital Media Director at VirginRadio UK. He recently announced he is leaving that position to become head of Future Media & Technology, Audio & Music at the BBC.

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x On the one hand $280 million seems on the surface like a high price for Last.fm. On the other hand, a large-market FM radio station -- one with a weekly cume of about 500,000 people and an AQH of about 100,000 people -- would probably be bought or sold for around $150 million. Last.fm is positioned such that it may end up being one of the most popular radio stations in the world (including one of the most popular in each country in which it does business). Is that worth the price of a couple of Chicago FM radio stations? CBS apparently thinks so. -- KH x x

From the San Jose Mercury News: "Fans of Internet radio sites like Pandora and Live365, as well as about 10,000 smaller Webcasters, are up in arms over a ruling by the semi-obscure Copyright Royalty Board...

"The practical effect of the change in payment structure -- scheduled to go into effect July 15 -- would be to put virtually all of the stations out of business, say the advocates for Internet radio, because the cost would far exceed any profits.

"Mike Riksen [pictured], vice president for governmental relations at National Public Radio, says NPR and other non-profit entities would also be harmed. NPR has fought against the ruling since it was announced in March, and last week officially filed an appeal challenging it [RAIN coverage here]. Also, pending bills [in RAIN, here and here] in the U.S. House and Senate would void the ruling and replace it with a plan more agreeable to Internet streamers...

"Isn't (public broadcasting) treated differently than commercial stations?

"The two most troubling aspects of the ruling are that public radio stations are not being treated as public entities, and that the whole reporting requirement, measurement metrics (to calculate how many people are listening at any given time) is a very foreign notion to public radio. It's not that we don't want to track who is listening to us, it's because we can't do it...

"Did the board simply rubber-stamp a music-industry plan?

"We don't really know a lot about the three judges (on the CRB), but I think it's safe to say that they departed drastically from how things were done in the past...

"How should Web streamers pay for the music they use?

"What we propose is very straightforward. (The legislation would): one, void the CRB decision; two, put in place for public radio an interim transition fee of roughly 150% of what it was under the old agreement; three, (include language that) recognizes the special and unique conditions of public radio.

"How does it look for the legislation? Is there enough support for it?

"I think we've really only tapped into the very edge of the support since (the CRB ruling) March 2. What I think this is moving to is a very pragmatic choice that Congress is going to have to make about how public radio should be treated.

"What is the bottom line for the average person who happens to listen to an Internet radio station they may have run across?

"For the average public-radio Web stream listener... the chances of expanding the breadth ... of what is offered will be lessened, and could in fact be halted."

Read this article from the San Jose Mercury News online here.