In a blog post today, Rdio confirmed Pandora’s plans to acquire its “innovative technology and critically-acclaimed design.” The company will be paying $75 million in cash to buy what it can before Rdio files for bankruptcy and shuts down.
The date it will cease to exist has yet to be determined. In the meantime, its services will continue to operate as normal. Users will be contacted “in the coming weeks” to explain what is happening.
Rdio said: “We couldn’t be more proud of the entire Rdio team and the product we have built. We’re honored to have connected so many listeners around the world with the music they love. We thank you for your continued support over the years and look forward to bringing you even better music experiences in the future as part of the Pandora team.”
Pandora said in a press release that it is “building the definitive source for fans to discover and celebrate music.” It expects to be offering an “expanded Pandora listening experience” by late 2016, once it obtains the appropriate licenses to use the technology and music from Rdio. The Verge reports the company “made it clear” during an investor call today that the service will not be kept running and will instead be used to build an all-new product combining the technology of Rdio and Pandora.
The deal will give Pandora scope to expand into new markets. It is currently only available in the United States, New Zealand and Australia as it uses royalty rates defined by the government, making it hard to gain international growth. Pandora is one of the oldest players in music streaming. Launched over 15 years ago, it predates every other product it is commonly compared to.
Rdio has been a popular and praised on-demand music service for years but has failed to grow its user base in the same way as streaming providers like Spotify have. The sale represents a large loss for investors in the company. It was once worth $500 million but will now be picked up by Pandora for just 15 percent of its former value. It has been declining amid fierce competition from global, multi-platform services including Spotify and Apple Music.
The past week has represented a major shake-up of available music streaming apps. Last Friday, Apple announced Beats Music will be shuttered at the end of this month and on Sunday Microsoft finally powered down the servers providing content to its little-known range of Zune MP3 players.
The playing field now looks very different than it did just a week ago. Spotify is still in the lead but it is now being chased by Apple Music, Microsoft’s recently-rebranded Groove Music, a revitalised Pandora and the all-new YouTube Music, launched over the weekend.
