Rdio Filing For Bankruptcy, Pandora To Buy Assets Worth $75 Million
Nov 17, 2015 08:36 PM EST | By Mitchie Encabo
For 10 years, Pandora Media has been putting its focus on one corner of the music industry, the Internet radio. As it goes closer to a bigger market on the on-demand music, Pandora competes with big outlets such as Apple Music, iTunes and Spotify.
On the need to race with big music streaming services, reports say that Pandora has intended to acquire assets from Rdio, a well-known online streaming service, but is now reportedly struggling in the market, worth $75 million in cash.
Brian P. McAndrews, chief executive of Pandora, said "Viewed individually, these are logical investments in our future growth. But when viewed collectively, they are key parts of a truly transformative vision of our future, positioning Pandora to become the definitive source for music enjoyment and discovery globally."
Such deal between Rdio and Pandora, which has required Rdio to go through bankruptcy filing, would put a huge difference in the competitive run of online music in the industry by allowing Pandora to grow and innovate the way it provides music to more than 78 million subscribers.
Rdio issued a statement, saying "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 that is being managed by Moelis & Company."
While the Pandora users have only been limited to the choice of songs they can listen to, the new deal with Rdio enables Pandora subscribers to hear the songs of their choice. Besides a possible increase in the number of Pandora users following the deal, it will also help Pandora reach the demands of Wall Street.
Last month, the company revealed its quarterly financial report, showing that the stock market declined to 35 percent in just one day. Experts say that the downfall in the Pandora's growth has been triggered by its competitors Spotify and Apple Music.
"This is a way for Pandora to supplement its growth trajectory with other business models within digital music," Anthony DiClemente, a media industry analyst, said in a statement.
Pandora said that while the company hopes to soar higher by the end of 2016 with its added on-demand music in the market, the deal with Rdio's technology is not going to be an easy adjustment as they will also have to negotiate a new licensing agreements with big record companies.
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