Pandora to snatch up what’s left of Rdio

Pandora is snatching up parts of Rdio and plans to use them to help it get into on-demand music streaming.

The Oakland company, which has been a pioneer in Internet radio, but has not to date offered a streaming service that would compete with Spotify or Apple Music, plans to launch its new service by the end of next year, company officials said on a conference call with investors on Monday.

In order to jump-start that new service, Pandora plans to acquire Rdio’s technology, intellectual property and other assets for $75 million. It also plans to offer jobs to many of Rdio’s employees.

“We are defining the next chapter of Pandora’s growth story,” Brian McAndrews, Pandora’s CEO, said in the statement. “Adding Rdio’s impressive technology and talented people will fast-track new dimensions and enhancements to our service.”

The deal is contingent on Rdio filing for bankruptcy filing and the approval of the bankruptcy court. Pandora officials said they expect to complete the acquisition of Rdio’s assets by the end of the second quarter.

Pandora will not be taking over Rdio’s own music service, company officials said. Instead, Rdio plans to wind that business down as part of its bankruptcy filing, Pandora officials said. Rather, Pandora will use the assets it acquires from Rdio to build its own on-demand streaming music business.

Streaming services — whether Internet radio and subscription on-demand — have become an increasingly important part of the music business, with a growing share of overall revenue. But streaming companies including Pandora and leader Spotify have struggled to turn streaming popularity into profits.

Pandora has some 78 million “active” listeners whose musical tastes the company closely tracks. Company officials said they believe the company can use what it knows about those listeners to market subscription music and other services to them.

 Photo: The front desk of the Pandora Internet radio company in Oakland, Calif.  (Deeba Yavrom/Bay Area News Group)

 

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