Slacker's new wavelength for satellite radio

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Trying to take on the three areas of portable music might seem overly ambitious for a company barely a year old, but Slacker has been hoarding digital music veterans from both the device and subscription service side.

Its CEO, CFO, vice presidents and chief counsel held the same positions at online music service MusicMatch, and the rest of the staff is peppered with former Rio, iRiver and Yahoo Music execs who have so far raised $13 million in series A funding. Their collective experience, analysts say, will serve the company well, but will not necessarily guarantee success.

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"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--especially, she added, since even a company with extensive resources like Microsoft didn't experience instant success with its Zune music player. Nonetheless, she said she expects good things from Slacker. "Having made good strategic decisions in the past, with products like MusicMatch...(the Slacker team's) prospects are strong, considering they're in a market dominated by Apple."

Apple's iTunes service is well-established, and it's essentially cornered the market on digital music players--almost three-quarters of all music players sold last year were iPods, according to The NPD Group. So the obvious question is whether the world needs another portable music player. And the answer seems to be, "Why not?" Despite its success with its player and download service, Apple hasn't established a presence in the on-demand subscription or radio businesses at all, which could leave an opening for Slacker to make a move, observers say.

The ubiquitous iPod is "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.

The same is true of leaders in other areas of digital music. "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.

Combining these features, and considering the enduring popularity of radio, Slacker's product seems a logical next step in the evolution of digital music listening, 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."

One of the biggest challenges will be getting the Slacker name (and hipster logo) out to the digital music-loving masses as well as the novices who haven't yet made a decision on a music subscription service or player. To do that, Slacker can't just be as good or interesting as iTunes and the iPod, it has to be even more interesting, Kevorkian said.

There are other drawbacks too, like the decision to run video versus audio ads. "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."

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car kit/ satellite radio?

Isn't this satellite radio? If so, aren't there only two licenses and XM and Sirius have them? Could this also help the Sirius/XM merger if Slacker gets the open license?