VentureBeat

Slacker, a portable music player/radio service that some have billed an iPod-killer (though the killer phrase is getting bothersome; Nokia is prepping an iPhone killer, Tube, for example), announced today that it’s signed deals with the big four music publishers. This is good news for Slacker, but it’s also another sign you don’t need to be a big tech player to strike deals the major music companies.

When Slacker was announced a year ago, it got positive press for being the first portable player that uses a satellite to deliver music constantly to your device. Similar to personalized internet music services like Last.fm and Pandora, users tell the program whether they loved or hated a song, and Slacker updates their playlists based on their responses.

By reaching agreements with EMI, Sony, Universal and Warner, Slacker will be able to deliver a substantial music library to its users. Slacker customers probably won’t notice anything, since the deals were actually completed before the San Diego-based company released its music player earlier this year, but it also means their service shouldn’t be affected by legal disputes later on.

The announcement marks Slacker as part of a growing trend of startups who are actually taking the time to talk to the music corporations, rather than just launching and worrying about the legal details later. (We cover companies taking both approaches in our overview here.) Despite a healthy amount of publicity and more than $50 million in funding, the company is hardly an Apple or a Microsoft.

Why are the labels suddenly talking with these relative small fry? Well, for one thing, companies like music-sharing social network imeem are getting popular using the ad-based, free music approach — and now that there’s a chance to make money, the music industry is willing to talk.

San Diego-based Slacker, the company that wants to take on the iPod with a new type of music recommendation service, has raised $40 million in a second round of funding.

The company, which we first covered in March, is launching in two stages. First, it launched its online player, which we’ve been listening to for several days now (image below), and have enjoyed. This part is similar to Last.fm, in that you can vote what music you like or dislike, and it will personalize a radio station for you based on those choices. It submits other music to you, based on what other people showing similar tastes have also selected.

The second phase will be the launch of a device, later this year, which will be always on through satellite and Wifi connections, and therefore it hopes to trump the iPod and its iTunes service — which are not so connected.

The round was led by Centennial Ventures and Rho Ventures, and go repeat investment from Austin Ventures, Mission Ventures and Sevin Rosen Funds.

This follows $13.5 million in a first round, as earlier reported.

Last.fm, of course was recently sold for $280 million to CBS last week, after raising a mere $5 million. Slacker, with its hardware, is much more ambitious.

Slacker is an ambitious new music service created by some industry veterans that takes aim at the iPod.

Slacker is a music player device, but it is also a music delivery service. It is path-breaking because it wants to let you take it anywhere: It will be the first service to use satellite to deliver music constantly to your device.

Slacker’s service is essentially a personalized Internet radio station, similar to popular services Last.fm and Pandora.

On Slacker, your “station” refreshes automatically with new music. It plays music that matches your tastes, which you determine by clicking “love it” on a song you like, and “ban it” for one you don’t like. Slacker then constantly updates the music it plays for you, finds new songs that match the bands you like, and songs from bands that are similar in style to those bands (those that have say, a similar energy level, popularity, or era; Slacker does not, however, assess “acoustic characteristics,” like Pandora does, to decide what music to send you). It reshuffles songs just like a radio station, but it feeds you newly released songs, and also other songs that match your updated tastes.

Slacker has licensed two million songs, so it has depth.

Slacker is so named because it is designed for the estimated 70 percent of people who like music, but who can’t be bothered to constantly update their playlists.

It is different from Last.fm and Pandora in other ways. You can go mobile with those services, but can play them on your device only if you’re within WiFi coverage.

The Slacker device, by contrast, is designed to be used anywhere. The device is about the size of a blackberry. So you can carry it around like you do an iPod. However, Slacker’s servers will communicate with your Slacker device constantly. It uses commercial satellites, and WiFi, refreshing your device’s drive with new songs when they are available. The communication happens every 15 seconds. If a new song found by Slacker matches your preferences, your device caches it. Then, if you do enter a place where satellites and WiFi can not reach the device, you can still listen to music from the cache. Slacker has a car dock.

This is an impressive team. Dennis Mudd, chief executive, was CEO at Musicmatch, a company he took to $70 million in revenue, and which he sold to Yahoo for $165 million. He has brought in Jim Cady as President (ex-CEO at Rio), and Jonathan Sasse as VP Marketing (ex-CEO iriver America).

The basic Slacker account will be free. A premium service of $7.50 a month lets you save tracks, and avoid ads. The hardware devices, depending on the model, will cost $149, $299 and $399. They’ll ship during the second half of the year. Slacker wants to integrate its music service within other devices, too, such as cellphones. You’ll be able to download up to 2,000 songs on the low-end device. Downloads will be $1 a track.

You can track your account on a Web player too (see image, at bottom).

The Web site will open tomorrow (Wednesday).

Based in San Diego, Slacker has raised $13.5 million in venture capital from Sevin Rosen, Austin Ventures and Mission Ventures.

Seperately, Marshall Kirpatrick points to news emerging from the SXSW Interactive conference in Austin, Tex.: Last.fm is developing a music video recommendation service based on the company’s Audio Scrobbler technology. More details here.