Pandora will spend $75 million to acquire “several key assets” from streaming company Rdio. The deal is contingent on Rdio seeking protection in U.S. Bankruptcy Court, Pandora said.
In a statement, Pandora said this agreement “will accelerate the company’s plan to offer fans greater control over the music they love, strengthening Pandora’s position as the definitive source of music.” The announcement was made by CEO Brian McAndrews.
The company said it will acquire technology and intellectual property from Rdio, and that “many members of Rdio’s team will be offered roles with Pandora, subject to close of the agreement.” It believes it will be able to offer “an expanded Pandora listening experience by late 2016, pending its ability to obtain proper licenses.”
It quoted Rdio CEO Anthony Bay saying, “The Rdio team built an acclaimed product and technology platform that has consistently led innovation in the young streaming industry. I’m pleased that many members of the Rdio team will continue to shape the future of streaming music, applying our tradition of great design and innovative engineering on an even larger stage with Pandora.” Bay, a former exec for Amazon, Microsoft and Apple, had been brought in in late 2013, with big expectations.
If it wins approval of the bankruptcy court, Rdio “will be winding down the Rdio-branded service in all markets,” it said. The Bankruptcy Court will supervise an auction for the assets of Rdio.
Pandora emphasized it is not acquiring the operating business of Rdio, but “is acquiring the technology and talent to accelerate its own business strategy.”
Rdio was founded by Janus Friis, co-creator of Skype, in August 2010, and is headquartered in San Francisco. According to its website, it offers a catalog of over 35 million songs in 86 countries. The company last spring had announced a low-cost $3.99/month subscriber option in an effort to expand its footprint.
One of the notable investors in Rdio is Cumulus. It is not immediately clear what the impact on that company will be. Pandora has an investor call set up for this afternoon.