Slacker - A Closer And Deeper Look

-Slacker Basic Radio is advertising funded

-Slacker Premium Radio will launch later in Q2 2007 at $7.50 per month and offers:

- No advertising

- Unlimited skipping

- Ability to save radio tracks to library

- Slacker Personal Radio Players available online and at retailers

- Slacker Car Kit allows users to "fill up" their Slacker devices and listen to their music in their vehicles

SSG – Sounds pretty impressive. Has Slacker considered a WIFI application?

SLACKER - Yes. The portable device caches music via Wi-Fi, satellite or USB.

SSG - So Slacker will support WIFI as well. WIFI seems to be the move of the future. Will Slacker be a social device that allows sharing?

SLACKER - Yes. People can simply click to send stations they have created to other users. We are also working to integrate with some of the major social networking sites so people can showcase their stations on those sites.

SSG - You have the bases covered in the social networking area as well. Is Slacker considering working with cell carriers, etc?

SLACKER - Yes. We've designed our platform to be highly portable, so we believe it won't be tremendously difficult to implement Slacker Radio in cell phones. . We plan to enable everything from mobile phones to car stereos. We can't go into specifics on timing but the groundwork is being done currently.

SSG - It is understandable that you can't get specific but it seems on the face of things that Slacker has thought through all of the innovations that are anticipated in the audio entertainment sector. Royalties and rights fees seem to be a hot topic with music being so widely available. How far along is slacker in that process?

SLACKER - We're in the process of bringing in the entire licensable music library from the major labels and many of the Indie labels. We have signed deals with Universal Music Group and SONY/BMG and a letter of agreement with Warner, along with over 100 Independent labels. We are actively working to secure the remaining open deals in the immediate future.

SSG – Looks like you will be able to hit the ground running. How deep is the slacker music library?

SLACKER - Content is being ingested on a regular basis as more licensable music libraries from the major and indie labels become available to Slacker.

SSG - Do you see Slacker as a viable substitution for I-Pod users?

SLACKER - Slacker is really a new category. It does have elements of Internet radio, portable music players and US-based satellite radio. However, the Slacker customers are initially all those Internet radio users who want to take that experience away from the computer. We are the first to enable this. According to the latest figures, there are 52 million Internet radio users in the U.S. and some have said about 200 million Internet radio users worldwide. This is our initial target market.

SSG - It is important to be a category creator. Who do you see as your primary competitors?

SLACKER - Slacker is creating a new category called Personal Radio that will attract customers from adjacent markets by offering an entirely new consumer experience. We appeal to customers who want to take Internet radio with them on a portable device; Satellite radio customers who are frustrated with paying for content that cannot be personalized, and people who do not have time to find new music and add it to their music libraries and portable devices.

SSG - Great solution, and your service offers entry point options. The free slacker service is supported by advertising, and the subscription price is $7.50 per month. How do you see the Slacker base in percentage bases free vs. paying subscribers?

SLACKER - Time will tell, though we feel most people will opt for the free service vs. paying a subscription fee.

SSG – Interesting. Does slacker have plans on offering talk format content? Traffic/Weather Reports?

SLACKER - Subscription service user will have access to personalized weather and news reports.

SSG - Cool, I am liking the model more and more. Getting into the car is a major step in this industry. How does Slacker plan to accomplish that?

SLACKER - In the second half of 2007, Slacker device owners in the U.S. will have the option to purchase Slacker Satellite Car Kits that update the Personal Radio Player with new content through a satellite broadcast system. Slacker car-top antennas receive high-speed music feeds from satellites throughout the continental United States, while the integrated Slacker DJ ensures favorite stations stay current. This product allows users to dock their Slacker device in their car and "fill up" stations as they drive. All these dates and products are with respect to the US market.

SSG – Good point. Slacker can be global on the portable device and over the net, but satellite space likely has to be negotiated to get to global for the car. Will Slacker be considering video service?

SLACKER – To be determined

SSG – On the technical side of things, what Codec is Slacker using?

SLACKER - AAC Pro V2

SSG - When is the anticipated launch of the Slacker portable device?

SLACKER – We will launch the portable this summer

SSG – Looking forward to it. By the way, great logo. When do the hats and T-Shirts become available?

SLACKER - Slacker merchandise will be available for purchase through the website (date TBD)
SSG - What demographics does Slacker see as primary?

SLACKER - Busy music lovers who don't have the time to build playlists or manage their music collections will find Slacker of great value. We don't necessarily see teens or the early 20's crowd as our core audience because they may have more time to devote to alternative ways to explore music. With that said any busy music lover will find our solution compelling.

SSG - Thanks so much for your time. I appreciate you filling us in about what to look forward to, and am eager to give the Slacker device a test drive. I have already subscribed to the internet service, and am impressed.

SSG readers who want to learn more about Slacker can visit their website at www.slacker.com and give the service a try.