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This article was published on November 16, 2015

Rdio is shutting down as Pandora acquires key assets

Rdio is shutting down as Pandora acquires key assets
Lauren Hockenson
Story by

Lauren Hockenson


Lauren is a reporter for The Next Web, based in San Francisco. She covers the key players that make the tech ecosystem what it is right now. Lauren is a reporter for The Next Web, based in San Francisco. She covers the key players that make the tech ecosystem what it is right now. She also has a folder full of dog GIFs and uses them liberally on Twitter at @lhockenson.

Well, now we know how Pandora is going to enter the streaming music subscription game — it will be buying its way in. Today, the company announced that it will acquire Rdio for $75 million in cash.

“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,” said Brian McAndrews, chief executive officer at Pandora said in a press release. “Wherever and however fans want to hear music, we intend to be their go-to destination.”

According to a report from Variety, Rdio has failed to gain significant traction in the music streaming space — especially in the face of tough competition like Apple Music and Spotify. But its core features play to weaknesses Pandora has fallen to: playlists and anytime listening.

But after the acquisition, Rdio as we know it will probably be no more. Pandora is only purchasing pieces of tech from Rdio, contingent on a bankruptcy filing in Northern California courts. However, Pandora will offer many roles to the existing Rdio team, along with folding in those features. The company expects to have an “expanded listening experience” next year.

On a call, Pandora execs indicated that the service will phase out at Rdio’s discretion.

It is a sad day for Rdio fans, who will likely see their music service of choice shutter. But it’s a major move for Pandora, which is playing serious catch up to get into the streaming game.

UPDATE: Rdio sent over this statement to TNW that clarifies the move, as well as the bankruptcy filing:

We are proud to have created an innovative and critically acclaimed global music streaming service. Given the state of the streaming marketplace, we have reached an agreement with Pandora –- a leader in music streaming that shares our passion for delivering the best possible music experience to music fans everywhere –- to purchase key assets from Rdio’s business, including intellectual property and technology.

The companies visions’ share much in common.  Both believe that an ad-supported radio service experience is the right free streaming model. Both believe that a lower entry-priced subscription is a key to growing the market. Pandora is the leader in streaming radio with 80m monthly active listeners.  Rdio is recognized as one of the top global music subscription services. The addition of technology, product, IP and people from Rdio will unlock opportunities for Pandora — including speed to market for their on-demand services, global expansion and direct licensing relationships. The result will be the industry’s best combination of streaming radio and subscription songs on demand.

We’re pleased that many of our employees are being offered roles at Pandora, where they can continue our tradition of great design and innovative engineering on an even larger stage. 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.

Pandora to Acquire Key Assets from Rdio [StreetInsider]

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