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Pandora To Buy Rdio's Core For $75 Million

This article is more than 8 years old.

As streaming has grabbed hold of the future--and present--of recorded music consumption, industry observers have spilled copious amounts of physical and digital ink questioning how many services the space could actively support, and when or how consolidation would begin. Today, there are more answers: Pandora announced an agreement to acquire key assets from Rdio for $75 million.

“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,” said Pandora CEO Brian McAndrews in a statement. “Wherever and however fans want to hear music, we intend to be their go-to destination.”

Pandora's purchase--which includes the transfer of intellectual property and likely many employees--comes as Rdio prepares to file for bankruptcy protection, and must be approved by the United State Bankruptcy Court of the Northern District of California. It's a steep fall for a streaming service that many music mavens have praised for its interface, and one that could never quite keep up with the likes of Spotify.

“The Rdio team built an acclaimed product and technology platform that has consistently led innovation in the young streaming industry," added Rdio chief Anthony Bay. "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 move comes on the heels of Pandora's $450 million purchase of Ticketfly in October, and gives the streaming radio giant a foothold in the interactive streaming space, which the company says will become part of an "expanded Pandora listening experience by late 2016, pending its ability to obtain proper licenses."

The latter part is crucial. Whereas the sort of online radio proffered by Pandora can rely on pay rates determined by the U.S. government, so-called interactive streaming--where the user can pick songs at will--requires working out deals with labels and publishers. In the past, labels have used such occasions to grab chunks of equity from interactive streaming services like Rdio and Spotify.

Whether or not they'll easily agree to license their catalogs to an interactive service owned by Pandora remains to be seen, though the streaming behemoth's recent deal with Sony /ATV over online radio rates suggests there may be a willingness for compromise on both sides.

For more about the business of music, check out my Jay Z  biography, Empire State of Mind, and my other book, Michael Jackson, Inc. You can also follow me on Twitter and Facebook.