Internet Radio Startup Slacker Faces Digital Hurdles

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Slacker Inc, the new brainchild of executives responsible for MusicMatch, Rio and iRiver America, is facing a dilemma due to certain digital music music developments including the lack of rights within the emerging industry. Among the top hurdles for the San Diego-based Slacker include securing approval from labels and publishers to create what it deems the first portable interactive radio service.

Slacker is currently seeking rights which would allow the company hours of interactive radio programming beamed from PCs, wireless networks and satellite signals. The company is also developing a range of handhelds that would store the information.

Universal Music Group, Sony BMG Music Entertainment and several independent labels have agreed to give Slacker rights for the new service, which the company hopes to launch in the second half of 2007. Still, VP of marketing Jonathan Sasse said the company still has terms to work through with publishers, specifically Warner Music Group (WMG) and EMI.

Licensing hurdles have deterred other companies from launching similar services in the past. Other concerns include a lack of considerable advertising revenue to cover content costs of the free ad-supported model Slacker has proposed. Slacker continues to affirm its confidence in securing deals for revenue through the sale of the portable devices. Fees from third-party licensing and from premium services that allow users to listen to tracks on demand are also areas Slacker is looking towards for revenue sources.

According to Reuters, Sasse claims the company is close to an agreement with WMG and at least three leading music publishers.

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