The streaming music industry is about to lose a player and gain a platform. On Monday, Pandora announced plans to acquire “key assets” from on-demand streaming service Rdio, which is seeking bankruptcy protection and will wind down its current business.
The deal, for $75 million in cash, covers Rdio’s technology and intellecutal property, and Pandora says it will be offering jobs to many members of Rdio’s team. Pandora isn’t buying Rdio’s entire business for a couple of reasons.
First, to launch an on-demand streaming service like Spotify or Apple Music, Pandora will have to make its own licensing deals with the record labels, because Rdio’s deals aren’t transferable. Second, Pandora executives explained in a Monday conference call that Rdio is financially “challenged,” and would have been a drain on Pandora.
I wouldn’t take bets on Rdio relaunching. It’s also likely the first of a few more consolidations in the next 12 months.