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Streaming service Rdio and Cumulus Media announced a partnership on Monday. This marks the second great partnership opportunity this summer for Rdio; the first being with Live Nation back in July. Being the second largest radio operator in the US with 525 station, Cumulus can offer Rdio much-needed awareness to compete with more established services like Spotify and Pandora. In exchange, Cumulus claimed a significant equity stake in Rdio’s parent company Pulser Media.

Most significantly, this deal will bring Rdio into the world of free, ad-supported streaming – a feature that has been absent from the Rdio service since its start in 2010. Currently, Rdio costs $5 per month for desktop streaming and $10 per month for phone and tablet access. While Rdio does offer a free trial, it cannot compare to the free versions of Spotify and Pandora. Cumulus boasts 1,500 sales agents around the country and will use this power to sell commercials for the new, free Rdio streaming service. The two companies will share in the advertising revenue. Rdio’s free version is expected to launch at the end of 2013 though the details of the service are still not clear.

“The biggest challenge we face is really awareness,” Mr. Larner said. The company has obviously been trying to address this concern with its partnership with Live Nation. Everyone is talking about streaming, but usually the only services that get a mention are Pandora, Spotify, and now the new iTunes Radio. With 525 stations across the US, Cumulus can promote Rdio to hundreds of thousands of music fans.

For Cumulus, the deal marks a significant step into the digital environment. In the past, they have supplied streams to Clear Channel’s iHeartRadio, but that deal was simply a “marriage of convenience,” according to Cumulus executive, Lewis Dickey. “We’re trying to be much more active in the audio ecosystem than just passively handing our streams over,” Mr. Dickey said. “That has severe limitations in terms of our ability to monetize.” Apparently, the deal with Rdio will allow Cumulus to do much more in the digital radio environment. Cumulus will certainly be creating specialized playlists for Rdio from its terrestrial radio stations.

With all the negative talk around streaming services like Spotify and Pandora this summer, it is refreshing to hear of a smaller service trying to move forward and adapt to the changing streaming environment. What are your thoughts on Rdio? Do you think partnerships are a good way forward for streaming services? Do you think streaming services be financially successful on their own?

The music subscription service, Rdio, has recently partnered with concert promoter Live Nation. As a result, Rdio will provide audio streaming on LiveNation.com and act as a sponsor for Live Nation-promoted festivals including the Sasquatch! Festival and the Watershed Music Festival. The partnership started last weekend and is part of Rdio’s efforts to gain more subscribing customers.

Resulting from Rdio’s recent partnership efforts with terrestrial radios, other services like Shazam and SoundHound, and Live Nation, Rdio has managed to increase its subscriber base. This article from Billboard describes some recent subscriber trends and numbers for the music subscription service:

Embracing live music requires being both online and on-site, CEO Drew Larner tells Billboard. Live Nation’s presence in country music gives Rdio an opportunity to gain visibility in front of country music fans. “It’s a demographic we want to approach and we felt this was a great way to hit that demographic.”

The company doesn’t share specific figures on number of registered users and subscribers, but Larner gives a couple examples of its recent growth. In Brazil, registered users were up nine-fold from June 2012 through June 2013, and up six-fold from January through June. Registered users were up six-fold from June to June.

Larner also points to the ranking of Rdio’s iOS app at iTunes as an indication of the service’s upward trajectory. Rdio rose to #1 among free music apps in June in the United States after steadily ranking between #10 and #20 for much of the year. It has also hit #1 in Australia, Canada, the United Kingdom and Mexico. “We’re killing it in Mexico,” says Larner.

What’s driving this growth? Larner says four factors are behind Rdio’s growth: partnerships, social media, marketing and the product.

Partnerships have been a growing trend for some online radio and music subscription services as they search for ways to add value to the listener experience. Most services already have the capabilities to allow users to buy music they listen to, but this connection with live music may act as a more effective link between the online and the offline experience. Many would argue that downloading music and streaming music are comparable, and many consumers do not find the need to own music if they can easily stream it online from any device in any location. The live experience, on the other hand, is irreplaceable. It cannot be duplicated online or through any music service.

As users browse the Live Nation site for concert tickets, they will also be able to listen to tracks via Rdio if they are subscribers, or listen to 30 second clips if they are not.  This direct connection between music discovery and the live music industry may act as a funnel, driving new, and current fans to purchase tickets to a band’s live show. If this driver proves effective, artists stand to benefit more than they would from a download as touring generally brings in more money. In an article by Bloomberg, Rdio Chief Executive Officer Drew Larner describes this beneficial cycle: “Marrying what we do with streaming and discovery, and promoting artists with live music, is a natural fit. A streaming service like Rdio and live concerts can be a virtuous circle.”

No official date has been set as of yet for the integration of Rdio’s services into the Live Nation site.

What do you think about this partnership? Do you think Rdio could effectively drive listeners through its service to a live show?