Rdio Files For Bankruptcy As Pandora Moves To Snap Up Assets

17 November 2015 | 12:08 pm | Staff Writer

And all it cost them was a cool $US75 million

Online music-streaming service Rdio has become the latest casualty of the ever-changing digital landscape, with the company filing for chapter 11 bankruptcy and leaving rival service Pandora to pick up $US75 million (about $105.6 million) in "key assets".

According to TechCrunch, early reports speculating that Pandora was eyeing off a deal with its ailing competitor were ultimately confirmed in separate statements from both companies, with Pandora noting in its release that the deal "is contingent upon Rdio seeking protection in the United States Bankruptcy Court for the Northern District of California".

"Upon approval of the proposed transaction by the bankruptcy court, Rdio will be winding down the Rdio-branded service in all markets," Pandora's statement read. "Pandora is not acquiring the operating business of Rdio, and is acquiring the technology and talent to accelerate its own business strategy. The transaction is subject to the approval of the Bankruptcy Court, which will supervise an auction for the assets of Rdio, as well as other customary closing conditions."

Pandora's statement notes that, as well as the newly acquired technology and intellectual property purchased from Rdio, the company will offer roles to many members of Rdio's team, "subject to the close of the agreement", with the ultimate goal being for Pandora to make optimal use of its new assets by late 2016.

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"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," Pandora chief executive Brian McAndrews said in the statement. "Wherever and however fans want to hear music, we intend to be their go-to destination."

"The Rdio team built an acclaimed product and technology platform that has consistently led innovation in the young streaming industry," Rdio chief executive Anthony Bay added. "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."

The statement from Rdio — which was founded in 2010 by Skype creators Niklas Zennstrom and Janus Friis — was slightly more heartfelt, with the company noting that there would not be any immediate interruptions to the service, though more updates will follow in the near future to guide users through the shutdown process.

"We couldn't be more proud of the entire Rdio team and the product we have built," Rdio's representatives wrote. "We're honoured to have connected so many listeners around the world with the music they love. We thank you for your continued support over the years and look forward to bringing you even better music experiences in the future as part of the Pandora team."

However, it did note that, while it seems most likely that Pandora will ultimately purchase the assets from Rdio, it's not totally in the bag yet.

"While we are filing for bankruptcy, because the planned sale to Pandora is contingent on such a filing, by law Rdio is required to entertain competitive offers during the bankruptcy process," the statement read.