Move Over Spotify, Rdio Is Moving To A Freemium Music Model, Too

The streaming music landscape isn't getting any less competitive -- just the opposite -- so in order to remain relevant in what's become a fast growing market, Rdio reportedly will join some of its more popular competitors by launching a free, ad-supported radio service. Rdio's transition to a freemium model will kick off with an updated app next Thursday.

The four-year-old service faces stiff competition from the likes of Spotify, Google Play Music All Access, Beats Music (now owned by Apple), and others. It's available in 60 countries, though presumed to have less paying subscribers than Spotify (10 million) and Rhapsody (2 million). Rdio, which was founded by the creators of Skype, hopes that will change.

Rdio

"What we've learned collectively over the last few years is that the most successful models are freemium models," Anthony Bay, Rdio's CEO, told The New York Times.

The move to freemium comes a year after radio network Cumulus Media secured a 15 percent equity stake in Rdio's parent company, Pulser Media, by agreeing to provide content and promotional services worth $75 million over five years. When the free, ad-supported version is rolled out to 20 countries next Thursday, Cumulus will sell ads in the U.S. Down the line, Rdio will be able to tap into content from the more than 450 radio stations Cumulus owns.

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