Slacker Inc., a San Diego-based digital music service, has ousted CBS Radio in a multiyear deal to deliver online radio to AOL Inc.'s 6 million listeners.
The agreement, announced Tuesday and scheduled to take effect later this summer, will more than double Slacker's audience of 5 million monthly users.
Slacker's listeners are just a fraction of the 34 million people a month who tune in mostly for free to Pandora, a rival Internet radio service whose parent company began selling shares on the New York Stock Exchange two weeks ago.
Unlike Pandora, which makes most of its money from selling ads, 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-based digital entertainment consultant 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. I think Slacker is a superior service that has spent too much time in Pandora's shadow. This is their opportunity to shine in the spotlight."