Rdio

Digital music service provider

General Information
Category
Music
Country
United States
Started
In 2008
Business Failure
Business Outcome
Bankruptcy
Closed
By 2015
Cause of Failure
Competition
Founders & Employees
Number of Founders
Three
Name of Founders
Carter Adamson, Janus Friis, Niklas Zennström
Number of Employees
Between 51 And 100
Funding
Number of Funding Rounds
6
Total Funding Amount
$125.7M
Number of Investors
5
Description

Rdio was among the first modern music streaming services to hit the American market. Rdio developers wanted to offer a product that was beautiful, flawless and social. One of the interesting features of that app was that it would show you what your friends were listening to and would give you music recommendations based on your circle of friends’ playlists.

Cause of Failure

Although Rdio developed
an excellent product, its weakness was in the close to non-existent marketing
and distribution department. The fact that they reached the market before
Spotify, didn’t help them as they little momentum they initially had was
completely lost once Spotify appeared on the scene.

For one, Spotify had an
impressive marketing strategy and a business model that made it easier for them
to gain more subscribers. While Rdio required users to become paying customers
to listen to their streaming service, Spotify broke that entry barrier and
offered free music thanks to the paid advertising it incorporated into its
product.

Rdio
tried a couple of pivoting strategies but these came too late and Spotify had
already gained 75 million users (they surpassed 140 million in 2017, 50 million
of which were paying subscribers). A mix of bad timing, reluctant leadership, and
wrong priorities was what finally caused Rdio to go out of business.

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