Streaming music service Rdio will play its last song soon.
The service, founded by Skype co-founders Janus Friis and Niklas Zennstroem, is declaring bankruptcy. But the streaming service may live on with the streaming pioneer selling its assets to Pandora for $75 million in an all-cash deal.
San Francisco-based Rdio has seen competition grow since it first came online in 2010. While it was competing with the likes of Spotify, Deezer and Rhapsody back then, today it competes with larger players like Apple, Google and Amazon in letting users play enormous catalogues of music on demand through ad-supported and ad-free models.
Pandora, which also uses ad-free and ad-supported business models, has kept out of the play-what-you-want music streaming business previously, instead focusing on its radio-like playback feature that learns what a user likes and plays music based on “stations.”
In purchasing Rdio’s assets, the Oakland-based streaming company may be looking to add services that compete more directly with rivals like Spotify and Apple Music.
“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,” Pandora CEO Brian McAndrews said in a press release. “Wherever and however fans want to hear music, we intend to be their go-to destination.” McAndrews is the former CEO of Seattle-based aQuantive, which sold to Microsoft in 2007 for $6 billion.
The press release also announced plans to “offer an expanded Pandora listening experience by late 2016.”
The purchase could also help Pandora expand in other countries. Right now, the service is only available in the U.S., Australia and New Zealand, but Bloomberg noted last week that Pandora was looking to expand to the U.K. as a gateway into the European market.
While Pandora isn’t buying the whole Rdio business, it will be offering some employees a chance to keep working the music streaming business.
“The Rdio team built an acclaimed product and technology platform that has consistently led innovation in the young streaming industry. I’m pleased that many members of the Rdio team will continue to shape the future of streaming music, applying our tradition of great design and innovative engineering on an even larger stage with Pandora,” said Rdio CEO Anthony Bay.
The sale of assets will occur after Rdio files for bankruptcy. The deal was announced shortly after markets closed today, but Pandora’s stock took a slight dip in after-hours trading before returning to its closing stock price. Pandora is valued at $2.8 billion.
