Rdio to shut down its service, file for bankruptcy, with Pandora acquiring key assets for $75M in cash
then Apple, Google, and Microsoft showed up Jon Brodkin / Ars Technica : Rdio shutting down, and Pandora will buy its technology Shawn King / The Loop : Pandora acquires ‘key assets’ from Rdio, will launch on-demand streaming in 2016 Nathan Ingraham / Engadget : As Rdio files for bankruptcy, Pandora picks it up for $75 million Troy Wolverton / SiliconBeat : Pandora to snatch up what's left of Rdio MacNN : Pandora acquires Rdio technology, staff, other assets for $75M Samzenpus / Slashdot : Pandora To Buy Rdio Assets For $75M In Cash Bertel King, Jr / Android Police : Pandora Buys Rdio For $75 Million, Latter Service Will Eventually Shut Down Duncan Riley / SiliconANGLE : Rdio gives up the ghost, files for bankruptcy and sells core assets to Pandora for $75m Josh O'Kane / Globe and Mail : Pandora Media to acquire assets from music streaming service Rdio Christina Warren / Mashable : The long, sad and totally predictable death of Rdio Kia Kokalitcheva / Fortune : Rdio Will Shut Down and Sell Some of Its Assets to Pandora for $75 Million Elyse Betters / Pocket-lint : Pandora wants to buy and shut down Rdio as it files for bankruptsy Alex Wagner / PhoneDog.com : Pandora will acquire fellow streaming service Rdio for $75 million John Callaham / Windows Central : Pandora will buy ‘key assets’ from Rdio for $75 million Tim Schiesser / TechSpot : Rdio to shut down, Pandora to buy assets for $75 million Zack O'Malley Greenburg / Forbes : Pandora To Buy Rdio's Core For $75 Million Salvador Rodriguez / International Business Times : Pandora Acquires Rdio, Looks To Take On Spotify, Apple Music Nick Salerni / iPhone in Canada Blog : Rdio is Shutting Down, Pandora Acquiring ‘Key Assets’ For $75 Million Brad Hill / RAIN News : Rdio bankrupt; Pandora acquires assets Chris Burns / SlashGear : Rdio is dead: Pandora acquires the remains Zoe Camp / Pitchfork : Pandora Set to Buy Rdio's “Key Assets” as Rdio Files for Bankruptcy James Risley / GeekWire : Rdio to shut down streaming music service, sells assets to Pandora for $75M Clinton Nguyen / Motherboard : Why Pandora Bought Rdio Brent Dirks / App Advice : Rdio is history as Pandora plans to purchase parts of the streaming service Evan Selleck / iPhone Hacks : Pandora is acquiring Rdio for $75 million Janko Roettgers / Variety : Sources: Pandora in advanced talks to acquire Rdio, announcement could come as early as this week Tyler Lee / Ubergizmo : Pandora To Acquire Rdio's Assets For $75 Million AppleInsider : Pandora snaps up Rdio technology and employees for $75M Jordan Kahn / 9to5Mac : Pandora acquiring Rdio for $75 million as the music streaming service shuts down Patrick O'Rourke / MobileSyrup.com : Rdio to file for bankruptcy, selling assets to Pandora for $75 million USD Tweets: Alex Howard / @digiphile : Video did not kill the @Rdio star. http://techcrunch.com/... Better streaming music services did. Peter Kafka / @pkafka : This month: Pandora joins YouTube, Spotify. http://recode.net/... Peter Kafka / @pkafka : Last month: Pandora disses YouTube, Spotify. http://recode.net/... Erin Griffith / @eringriffith : Rdio raised $125 million. Pandora buying assets out of bankruptcy for $75 million. http://www.streetinsider.com/ ... Peter Kafka / @pkafka : You're Launching a Digital Music Start-Up? In 2012? Really? http://dthin.gs/TnGF5U Peter Kafka / @pkafka : Take a Trip Down Music-Startup Memory Lane. Don't Trip on All the Craters. http://dthin.gs/16ASBHI Peter Kafka / @pkafka : Pandora spends $450mm to buy ticket brokerage: http://www.techmeme.com/... Pandora spends $75mm to buy music service: http://www.techmeme.com/... Casey Newton / @caseynewton : WHOA: Rdio is seeking bankruptcy protection and shutting down its service. Damn. I'll miss it. http://www.streetinsider.com/ ... Ingrid / @ingridlunden : CEO Anthony Bay is not coming along to Pandora, will stay with Rdio to wind down company, McAndrews says http://techcrunch.com/... Ken Norton / @kennethn : Sad about Rdio, the best music service. None of you listened to us when we said that, and that's why this happened. http://www.businesswire.com/ ... Micah Singleton / @micahsingleton : In 2013, Rdio was valued at $500M. Sold to Pandora today for $75M, an 85 percent decline http://www.theverge.com/... See also Mediagazer
Context & Ripple Effects
Pandora is buying its way into on-demand music. The trigger was internal: as the related coverage shows, Pandora concluded its ad revenue could no longer cover content costs, so it paid $75M in cash for Rdio's technology, staff, and other key assets through bankruptcy rather than build a subscription product from scratch.
The acquisition is effectively a liquidation sale with a strategic buyer attached — Rdio's service winds down within weeks, over half its workforce is cut, and Pandora inherits the engineering it needs to enter a market where Apple Music, Google, Microsoft, and Spotify already compete.
First-order effects
- Around 123 of Rdio's remaining employees lose their jobs by December 31, though Pandora has extended offers to roughly 100 of them — the asset deal keeps the team while shedding the company.
- Existing Rdio subscribers are dropped to free accounts after November 23rd, with the service fully turned off by December 22 — customers must migrate to Pandora or a rival before year-end.
Second-order effects
- Apple Music, Google, Microsoft, and Spotify now face a well-funded radio incumbent converting its large listener base into an on-demand subscriber funnel, raising the stakes in retention and free-tier conversion.
- The fire-sale price sets a grim benchmark for any sub-scale streaming service seeking an exit: buyers will pay for technology and talent, not for the subscriber base or brand, which get written off entirely.
Third-order effects
- If ad-supported models keep failing to cover licensing costs, the market structurally consolidates toward a handful of scale players running hybrid free-plus-subscription tiers, with independents exiting via asset sales rather than competing on catalog economics.
- Content owners gain leverage as buyers shrink: fewer, larger licensees negotiating on-demand rights points toward pricing power concentrating at the label side of the table — though how fast depends on whether Pandora's subscriber conversion actually materializes in 2016.
The trend: Music streaming is consolidating around scale players, as ad-supported services unable to cover content costs exit via bankruptcy asset sales and incumbents buy technology instead of building it.