rDIO shutting down, Pandora to Buy Assets
Rdio has filed for bankruptcy in the US and will shut down its operations in all 85 markets, in an effort to rid itself of accumulated debt.
Meanwhile, internet radio giant Pandora has announced that it is acquiring certain assets of Rdio for US$75 million, subject to further negotiations and approvals.
Speaking exclusively to The Music Network this morning, Pandora said the purchase includes “technology and intellectual property from Rdio”.
A Pandora insider added that Rdio will be winding down its service in all markets as a result of its bankruptcy proceedings and will begin that process once the bankruptcy court approves the transaction: “As we understand it, that means the Rdio brand will no longer exist.”
Pandora currently operates in just three territories; Australia, New Zealand and the US. News that it was planning a global expansion came earlier this month when reports suggested a return to the UK market. Pandora’s plans to expand further into the live sector were teased early last month when it acquired ticketing platform Ticketfly for US$450m.
TMN understands that global CEO, Anthony Bay will not be staying and the majority of international staff will be made redundant immediately, while some US-based product, engineering and content licensing teams are being made offers, subject to the close of the agreement, meaning they will become Pandora employees on the day the deal closes. At this point it is not clear whether the two remaining Sydney-based staff will remain.
Today’s news follows TMN’s exclusive report last month that Rdio’s Australian and New Zealand head Colin Blake had resigned from his position, along with some other senior global executives. The Music Network spoke exclusively to former Australian & NZ Head, Colin Blake again this morning.
“I am very disappointed to hear today’s news and I am thinking about all of my former international colleagues who were given no warning that they would be potentially out of work this close to Christmas,” Blake told TMN.
“I am very proud of the marketing work that my team and I have done here in Australia and New Zealand over the past three years. We invested into the music industry when not many streaming services were and that yielded great initial results with the Rdio app at one point being the Number 1 music app and Number 1 grossing music app in the Australian iTunes Store, with almost 1 million downloads in the challenging AU/NZ market. I believe some poor decisions and issues in the US market led to this outcome.
“However, Pandora is a fantastic business,” Blake added. “The AU/NZ Pandora team are very good operators. If this transaction is complete I wish them all the best and hope they gain some benefit from the work we have already done in this market.”
TMN understands there are still over 10,000 Australian Rdio customers who will continue to receive their current service until a deal is confirmed with Pandora, at which point they will likely be moved to a Pandora-branded offering.