As part of the deal, Rdio will file for bankruptcy, presumably to get rid of any accumulated debt. The Bankruptcy Court will supervise an auction for the assets of Rdio. “Upon approval of the proposed transaction by the bankruptcy court, Rdio will be winding down the Rdio-branded service in all markets”, Pandora noted in its statement.
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“Adding Rdio’s impressive technology and talented people will fast-track new dimensions and enhancements to our service”, said Brian McAndrews, Pandora CEO.
Pandora Media Inc.is building out its service after the acquisition of Rdio’s assets, looking to offer Spotify-like on-demand music in addition to its legacy online radio offering. Whether Pandora plans to broaden outside of its U.S. homeland remains to be seen.
Internet radio company Pandora said Monday it has made a bid to acquire Rdio’s technology assets – along with a handful of staff members. The company expects to have an “expanded listening experience” next year.
If you are a music lover, then when it comes to streaming services, you certainly do have a selection to choose from. It sounds as if Rdio has finally run out of cash while trying to compete with giants like Spotify and Apple Music, and Pandora will be stepping in to use its technology to enhance its platform. They also secured more direct licensing agreements with Sony/ATV, a major music publisher with songwriting rights for artists like Beatles and Taylor Swift, and another with Merlin, a group that represents thousands of independent labels. By purchasing Rdio, Pandora hopes to soon give its users more control over the music they listen to. The launch of Apple Music, which has been able to attract more than 6.5 million paying users, may have been the last straw for the company.
While its offering was solid, the company never gained a serious market share compared to large competitors such as Spotify AG, and the emergence of both Apple Music and YouTube Music this year may have been the final nail in its coffin. Pandora being one, Rdio being another.
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Rdio offers stations for free, with ads, while charging for on-demand plans that disable ads and let customers keep music libraries of specific songs. The company said in a statement “While we are filing for bankruptcy, because the planned sale to Pandora is contingent on such a filing, by law Rdio is required to entertain competitive offers during the bankruptcy process that is being managed for us by Moelis & Company”.
