Rdio closes Vdio: 'We weren't able to deliver the differentiated customer experience we had hoped for'
Rdio has shuttered Vdio, its on-demand service for buying and renting movies and TV shows. — “We have decided to discontinue the Vdio beta service,” the company said in an email.
Context & Ripple Effects
The shutdown closes the loop on a service launched barely a year ago: Vdio entered private beta in the UK and US in November 2012 as Janus Friis' transactional video play alongside Rdio's subscription music business.
It also lands weeks into a broader retrenchment. In November Rdio laid off staff citing cost structure and scalability (the November restructuring), and on December 3 it named former Amazon executive Anthony Bay as CEO. Killing an unprofitable beta within his first month reads as the new leadership's first decisive cut — and the company's own framing, that it couldn't deliver a 'differentiated customer experience,' concedes the point against entrenched video storefronts.
First-order effects
- Vdio beta users in the US and UK lose the ability to buy or rent movies and TV shows through the service, with purchases made there needing a migration path.
- Rdio's resources and management attention now concentrate fully on the subscription music business that Bay was hired to scale.
Second-order effects
- The exit removes a marginal challenger from transactional video, leaving the established download-and-rental storefronts facing one less competitor just as Rdio's own ad-supported tier push — built on the Cumulus radio partnership from September — demands funding.
- For investors and partners watching Rdio's turnaround, a fast kill of an underperforming product signals discipline over expansion, which could steady confidence after two months of layoffs and management churn.
Third-order effects
- If the pattern holds, standalone subscription-music companies will find it harder to justify building adjacent media businesses from scratch against incumbents with existing video catalogs, pushing the sector toward focus on the core streaming subscription.
- Beta-stage services attached to larger platforms become more expendable: as capital tightens around streaming economics, companies increasingly shut experiments publicly and early rather than let them linger, making customer-facing shutdowns and library migrations a routine part of the market.
The trend: Streaming companies are pruning side bets and consolidating around their core subscription product as the cost of competing across multiple media verticals becomes untenable.