Slacker replaces CBS in deal to power AOL Radio

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Slacker Inc., a San Diego online music company, has ousted CBS Radio in a multiyear deal to deliver online radio to AOL Inc.’s 6 million listeners.

The deal, announced Tuesday and scheduled to take effect later this summer, will more than double Slacker’s audience of 5 million monthly listeners.

Though its users are just a fraction of the 34 million people a month who mostly tune in free to Pandora, a rival Internet radio service, Slacker has focused on getting its listeners to pay for its premium subscription services. About 6% of Slacker’s users, more than 300,000, subscribe to its ad-free or on-demand music service. Slacker hopes to win over even more subscribers from AOL’s pool of listeners.

AOL, meanwhile, will get an online service that will help keep users on its sites. The New York Internet media company has been on a spending spree in recent years, snapping up hot Web properties such as the Huffington Post, TechCrunch and Engadget to beef up its online presence.

CBS, one of the nation’s largest radio broadcasters after Clear Channel Communications, has been focusing on driving traffic to its own online properties, including the newly revamped MP3.com. CBS also owns Last.fm, an online radio service similar to Slacker and Pandora.

“Slacker Radio on AOL is a win-win,’ said Ted Cohen, managing partner of TAG Strategic, a Hollywood digital entertainment consulting group. ‘As part of their much-publicized revamping, AOL’s Jeff Bronikowski and Geno Yoham have been working to deliver a better radio experience for their audience. Slacker is a superior service that has spent too much time in Pandora’s shadow. This is their opportunity to shine in the spotlight.”

-- Alex Pham