Be Careful Who You Welcome In, Seriously

Choose your words wisely – nothing is certain during these times and so what appeared to some as a brave welcome ended up being a brisk bankruptcy for Rdio in less than 6 months after Apple unveiled its new music streaming service.

As is often the case with many tech companies valuations are literally that, just paper value and they can tank as fast as the changing seasons. Despite the fact that Pandora has seen its share prices lose a third of its value reporting losses of $86 million – it seems to be betting big regardless in an attempt to recover its losses and come back fighting.

Where Pandora the online free radio service, has had it’s advantage is with monthly listeners of almost 80 million leading the market till now, but the growth of on-demand is putting pressure on its growth. Apple Music has clocked up to 6.5 million paid subscribers, which although has a way to go to catch up with Spotify’s 20 million, is still ahead of Pandora’s 4 million paid subscribers.

The reality is that without a real cash bucket like Apple, the ability to survive in music streaming is getting tougher by the day, Spotify is creeping closer in overtaking Pandora’s lead in monthly users, and now Pandora is attempting to get one up on the competition. Rdio, the on-demand music streaming site is filing for bankruptcy protection and as part of that process will hand over it’s key assets which is its technology and patents to its previous competitor Pandora for $75 million cash. As part of the proposed deal some of the Rdio team will also be absorbed into Pandora, subject to the agreement closing.

Pandora since its earlier purchase of ticketing company Ticketfly for $450 million, is seeking to build a tiered package for its customers and has recently secured a new direct licensing deal with Sony/ATV, aiming to launch it’s on-demand listening service sometime in 2016. Brian Andrews the CEO at Pandora said “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,”

In a statement to TechCrunch Rdio said this:

The companies visions’ share much in common. Both believe that an ad-supported radio service experience is the right free streaming model. Both believe that a lower entry-priced subscription is a key to growing the market. Pandora is the leader in streaming radio with 80m monthly active listeners. Rdio is recognized as one of the top global music subscription services. The addition of technology, product, IP and people from Rdio will unlock opportunities for Pandora — including speed to market for their on-demand services, global expansion and direct licensing relationships. The result will be the industry’s best combination of streaming radio and subscription songs on demand.

Competition with online radio is also tightening, YouTube Music has also recently launched as a new service offering radio stations as part of its package in a similar vein to Pandora. According to a review in C-Net ‘The app pays attention to your musical tastes to make suggestions and fine-tune your stations automatically.’

Who’s still got skin in the game? As it stands today the streaming subscription players still standing are Spotify, Apple Music, Google Play, Deezer, Rhapsody, Tidal – soon to be SoundCloud and likely new entrant Pandora.