Word: radio
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That could change if the pioneers behind personalized radio continue to win over music lovers who are burned out on regular radio but can't be bothered to constantly refresh their iPods with 99¢ iTunes. On websites such as Last.fm, Pandora.com and the new Slacker.com personalized radio lets you train it to understand your tastes. You can, of course, just listen to the music passively as it plays on your computer. But it's even better when you make it your own, by marking each song as a favorite, skipping past it or banishing it from the station's playlist...
Each customizable radio service has its own way of assessing what you like. Pandora refers to its database of more than 600,000 major-label songs--all of which have been categorized by musical attributes such as voice, tonality and chromatic harmony--then serves up similar-sounding tracks. That can get a little monotonous, so Slacker, which launched in March, uses professional DJs to dream up constantly changing playlists that give you more variety while still adhering to your basic tastes. If you ask for Gwen Stefani, for example, you'll also get the Cars, Talking Heads and Bj?...
Personalized radio isn't just a quirky idea for tech geeks to fawn over and venture capitalists to gamble their millions on. Although its revenues are minuscule compared with the $21 billion of the terrestrial-radio industry, more than 4 million people in the U.S. visit Pandora and Last.fm each month, according to comScore Media Metrix. That makes them the fifth and sixth most popular Web radio stations in the country. "It's the ideal middle ground between having an intact experience and being in control of what you receive," says Last.fm co-founder Martin Stiksel...
Making personalized radio portable could be the key to its long-term success. "The biggest problem with Internet radio is that it's stuck on the PC," says Slacker CEO Dennis Mudd. "What you really want is this device you can play in your living room, in your car or in the desert walking around." In addition to Sprint's move to put Pandora on phones, SanDisk recently demonstrated a prototype portable player that could run Pandora, and Slacker plans to sell a $150 iPod-like player this summer that can get wireless music downloads from its website...
Unlike iTunes, music from Slacker is free. "Most people don't want to pay for radio," says Mudd, who hopes to bring in revenue through audio advertising spots. That model is showing some promise. The overall Internet-radio market brought in more than $400 million in ad revenue last year, according to JPMorgan Chase. About half of that came from online ads on websites owned by conventional radio broadcasters like CBS Radio and Clear Channel. "Internet radio, when you tie it in with our business model, I think it works," says Clear Channel CEO Mark Mays, who is beefing...