×

As Revenues and Subscribers Fall, Slacker Radio Acquired by LiveXLive for $50 Million

Music subscription service Slacker Radio once wanted to compete head to head with the likes of Spotify. On Friday, the company announced that it had been sold for $50 million to LiveXLive, a company specializing in music festival live streams. Financials published as part of that acquisition don’t paint a pretty picture — and show how hard it can be to succeed in a business increasingly dominated by big players with deep pockets.

Slacker generated a total of $36.7 million in revenue in 2016, according to a LiveXLive SEC filing. During the first six months of this year, Slacker’s revenue was just $13.4 million, down 36.4% from $21.1 million during the same time last year, due to Slacker losing two key distribution partners for its paid service.

The service currently has 1.5 million monthly active users and 400,000 subscribers to its paid and ad-supported tiers, according to the filing. The company accumulated a total deficit of close to $148 million by the end of 2016, and reported a net loss of $3.8 million for the first six months of this year.

Founded in 2003, Slacker changed its strategy multiple times over the years, bouncing back and forth between focus on free radio and a paid on-demand service. At one point, Slacker also aimed to enlist YouTubers and other online celebrities as curators.

But the real money-maker for Slacker had long been to strike deals with mobile phone operators to bundle Slacker, and deals with other companies to power their services. Slacker had been the backbone of Samsung’s Milk Music, which the consumer electronics giant closed in 2016. Without mentioning Samsung by name, Slacker’s financials show contractual payments totaling around $10 million in 2015 and 2016 — payments that “concluded in 2016,” as the filing states.

All of this goes to say that Slacker’s finances were looking pretty bad for 2017 and beyond, making it hard for the company to survive on its own.

LiveXLive now agreed to buy Slacker for $44 million in cash and $6 million in stock, but it’s worth noting that LiveXLive doesn’t actually have that much cash on hand. The company only reported $225,000 in revenue for its fiscal year ending March 31, and losses of $14.2 million. It is now looking to finance the Slacker acquisition through a public re-listing, which aims to raise as much as $100 million, and notes that the acquisition may not close if the listing doesn’t go as planned.

A LiveXLive spokesperson told Variety that the company didn’t have any immediate plans to change Slacker’s brand, or let go of any of its staff.

The company now wants to make Slacker key to its efforts to build an entertainment company with multiple revenue streams across music, video, and social. It’s a tall order — but then again, so is competing as a standalone entity against the giants of the music-streaming world.

Popular on Variety

More Music

  • 'ZZ Top: That Little Ol' Band

    Film Review: 'ZZ Top: That Little Ol' Band From Texas'

    Settling in to watch “ZZ Top: That Little Ol’ Band From Texas,” you may have a burning question that applies to almost no other rock documentary, and that is: Who, exactly, are these guys? The ones behind the beards? If you’re old enough, of course, you probably know that ZZ Top started out, in 1969, [...]

  • NEW YORK, NEW YORK - AUGUST

    Jay-Z to Acquire Ownership Stake in NFL Team (Report)

    Jay-Z will soon acquire a “significant ownership interest” in an NFL team, TMZ reported on Friday. The team was not disclosed, but a source told the site the deal will happen in the “near future,” adding that the billionaire rapper “wants to continue to be a change agent for the NFL.” Jay-Z’s company, Roc Nation, [...]

  • (L-R) NELL WILLIAMS as Eliza, VIVEIK

    How 'Blinded by the Light' Brought Bruce Springsteen's Music to the Screen for a Song

    Blinded by the Light co-writer/director Gurinder Chadha knows firsthand what it feels like to be an outsider. Born in Kenya when the country was a British colony, she grew up part of the Indian/Asian diaspora who made their way from East Africa to London. For that reason, the 59-year-old’s movies has always dealt with the [...]

  • Blake Shelton, Trace AdkinsCMA Music Festival

    Blake Shelton Takes a Shot at 'Old Town Road' in New Single

    Blake Shelton and Trace Adkins have just released a duet, “Hell Right,” that seems to have a beef with “Old Town Road.” But is it a light-hearted, maybe even affectionate slam — or should anyone read culture-war significance into the two country stars expressing a preference for Hank Williams Jr. over Lil Nas X, the breakout [...]

  • Led Zeppelin Stairway to Heaven

    Department of Justice Backs Led Zeppelin in ‘Stairway to Heaven’ Copyright Case

    The U.S. Department of Justice has weighed in on the next big music copyright case on the horizon following the Katy Perry “Dark Horse” decision, and taken Led Zeppelin’s side in the long-running copyright dispute that pits the writers of the group’s anthem “Stairway to Heaven” against the publishers of the earlier song “Taurus” by [...]

  • Teddy Riley Walk of Fame

    From Blackstreet to Hollywood Blvd. as Teddy Riley Receives a Star on the Walk of Fame

    Many musical artists are responsible for hits, whether recording and writing for themselves or producing smashes for others. Teddy Riley’s got the success, having fashioned platinum-plated R&B works for, and with, Bobby Brown, Michael Jackson, Keith Sweat, Doug E. Fresh and more since the mid-’80s, not to mention the music of his own slick soul [...]

  • Album Review: Snoh Aalegra

    Album Review: Snoh Aalegra’s ‘Ugh, Those Feels Again’

    Apart from having one of the all-time greatest album-sequel titles, “Ugh, Those Feels Again” — which follows this R&B-leaning Swedish-Persian singer’s 2017 debut full-length, “Feels” — succeeds on a far more complex level: making familiar sounds unfamiliar. Snoh Aalegra signed to Sony when she was just 13 and released a more pop-leaning album under the [...]

More From Our Brands

Access exclusive content