Things have been hard for Rdio, the lesser known music streaming service. While it was already struggling with its own dwindling userbase, the likes of Apple, Microsoft and Google showing up made things even more difficult. And a culmination of all those hard times is bankruptcy, a motion for which Rdio has filed in the Northern District of California.
The sheer cognisance of a lesser userbase can be taken from the fact, that while Rdio launched in India earlier in January this year, it hardly failed to gain any traction whatsoever. While this can be attributed to a lot of factors — including minimal or no marketing, it also happened largely due to Rdio’s inability to serve more of local content — an area where local competitors took over.
Along with Rdio’s bankruptcy comes another exciting news. Pandora, one of the more heavily-backed and known music discovery platforms, is acquiring key assets from Rdio for a cheap buy of just over $75 Million.
In addition to acquiring technology and intellectual property from Rdio, many members of Rdio’s team will be offered roles with Pandora, subject to close of the agreement. The company expects to offer an expanded Pandora listening experience by late 2016, pending its ability to obtain proper licenses.
The purchase price is $75 million in cash, subject to certain purchase price adjustments.
In a statement issued today, Pandora chief Brian McAndrews said:
Whether streaming through radio, on-demand or in-person at live events, Pandora is building the definitive source for fans to discover and celebrate music. Wherever and however fans want to hear music, we intend to be their go-to destination.
We are defining the next chapter of Pandora’s growth story. Adding live music experiences through Ticketfly was a transformative step. Adding Rdio’s impressive technology and talented people will fast-track new dimensions and enhancements to our service. I couldn’t be more optimistic about Pandora’s future and the future of music.
It is rather smart from Pandora to buy entire, pre-built, ready-to-use technology assets at a heavily discounted price than building the entire platform in-house — which apart from excessive manpower resources, could have taken up months to get ready and launched. With Rdio’s acquisition, Pandora will now be able to have a neck-to-neck competition, specially with the likes of Apple Music.
Rdio on the other hand itself throws up some interesting numbers. The company has had a flush $125.7 million in funding from Atomico, Skype, Mangrove Capital Partners, and famed entrepreneur Janus Friis. In October 2014, the company’s parent entity Pulser Media raised $108 million to fund Rdio — where did that additional money go is a big question. Rdio operates in a massive 60 territories across the globe.
Shares in Pandora closed down 0.15 percent at $13.42 in normal trading, but have fallen 0.50 percent more in after-hours.
The acquisition deal is expected to close in the first quarter of 2016.
