Music streaming services are now the go-to places for people who want to bring their music with them. It doesn't take a huge chunk from a smartphone's storage, and there are free to premium offerings that provide users access to a plethora of tracks from their favorite artists. With that said, the competition is cutthroat indeed, and service providers want to edge out the competition to reach the top. This may also be why Pandora, one of the biggest service providers in music streaming, has just announced that it is acquiring Rdio for US$75 million.
In a press release published by Pandora, the company said that the deal will acquire Rdio's technology and intellectual property. Furthermore, many members of Rdio's team will also be offered roles within Pandora.
The deal was also contingent upon Rdio "seeking protection in the United States Bankruptcy Court for the Northern District of California." Furthermore, Pandora isn't acquiring the operating business of Rdio, but it will be acquiring the company's talents and technology to further improve and accelerate the company's own business strategy.
"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," said Brian McAndrews, chief executive officer at Pandora in the press release. "Wherever and however fans want to hear music, we intend to be their go-to destination."
Rdio is a music streaming service with features that lets its users play any songs or albums they want from its massive library of tracks, and Pandora could use their technology to offer specific music on-demand features. As such, this would then enable Pandora to directly compete with Spotify as it would most likely include Rdio's on-demand streaming features in its music streaming service.
The two companies are finalizing the deal by first quarter of next year. Furthermore, Pandora made it clear that it will launch a new on-demand product built as part of their acquisition and talent. However, its date of release as well as Rdio's imminent end of service, remains unclear.