Rdio has filed for bankruptcy in the US and will shut down its operations in all 85 markets, including Australia, in an effort to rid itself of accumulated debt.
Australian music industry B2B publish The Music Network (TMN) is reporting that Pandora is acquiring certain assets of Rdio for US$75 million, subject to further negotiations and approvals.
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.”
Earlier this year Rdio’s Australian and New Zealand head Colin Blake (pictured below), who recently resigned from his position, discussed with B&T the problems facing the Australian music streaming market.
“Certainly the clutter and that over-saturation affects the thing moving forward, or affects the opportunities moving forward, because the more cluttered it is the more confusion that can be caused for the consumer,” Blake told B&T.
“For Australia in particular there are bunch of things here that contribute to us not getting to that point faster or sooner than we like.”
Rdio’s 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.
“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.”
The 10,000 Australian Rdio customers 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.
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