Cumulus Takes Ownership Stake in Rdio
Cumulus, which calls itself the largest pure-play radio company in the U.S., has partnered with subscription music service Rdio in a deal that involves content, promotion and advertising.
Cumulus is getting what it calls a “significant” equity stake in Pulser Media, Rdio’s parent company, in exchange for exclusive content, media and on-air promotional commitments over five years. The companies say the arrangement gives Cumulus a financial interest in the larger digital music ecosystem and allows Rdio to launch free, ad-supported products in the U.S. while accelerating the activation of new users and subscribers.
Rdio will also leverage the Cumulus sales infrastructure to monetize its upcoming ad-supported free products, including music on-demand, custom playlists and exclusive content curated by Cumulus.
It is significant news because it’s the first time a digital platform and broadcast platform have come together in this way, according to the companies. Rdio will also get a lot of radio promotion on Cumulus’ 525-station network.
Rdio was funded by the co-creator of Skype, Janus Friis. On Rdio, music fans discover, play and share songs and build a digital music collection that’s available to stream on the web, on mobile and offline. Rdio offers listeners several listening options, including personalized radio stations.
Cumulus CEO Lew Dickey says the arrangement “leverages our premier broadcast and content assets along with Rdio’s acclaimed digital audio platform — enabling consumers to listen to whatever they want, whenever they want, however they want.”
Cumulus streams are also heard on Clear Channel’s iHeartRadio platform. According to the New York Times that deal remains intact “through at least next year.”
A Cumulus spokesman says the Rdio deal should not be interpreted as any disappointment with the existing partnership between Cumulus and iHeartRadio. “Indeed, iHeart has been instrumental in driving huge increases in Cumulus traffic growth and that arrangement is complementary to our deal with Rdio.”