One of the key players in the streaming game Pandora, has recently announced that they are purchasing ‘key assets’ from the remains of on-demand stream service Rdio, for an astounding $75 million. However, unlike most company buy-outs, this one was made possible due to Rdio being forced into bankruptcy, owing approximately $220 million to creditors. Once a popular service, over the last few years it has been repeatedly forced to step down a few rungs as its competitors leap ahead.
In order to compete against giants like Spotify, you’re gonna have to spend the big bucks. Which is exactly what Rdio did. Most of their debt is owed to Pulser Media, who financed the majority of company spends since its conception, but there’s many other significant creditors involved. Rdio owed money to Sony Music ($2.4 million), Shazam ($1 million), Facebook ($500,000) and Warner Music Group ($613,000) among others.
The company confirmed their shutdown, stating that “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.”
This is probably terrible news for Rdio’s long term users, but it means big things are coming for Pandora, who currently only operate in the USA, Australia and New Zealand. While Pandora uses algorithms to generate radio stations based on its users tastes, it lacks the ability to select specific tracks that streaming services like Spotify provide. Rdio allowed users to select any song or album they’d like from a vast catalog, so should this technology be integrated into Pandora’s, it could potentially give them a huge leg up on their competition.
Pandora has stated that they expect to offer an ‘expanded listening experience’ by the end of 2016, which will likely include Rdio’s old features.