Music service Rdio raises $17.5 million

Ronny Kerr · February 3, 2011 · Short URL:

Music subscription service lets users stream songs on-demand to their computer and mobile phones

Rdio, a music subscription service for the United States and Canada, announced Thursday that it has raised a $17.5 million round of financing from new investor Mangrove Capital Partners with participation from existing investors Janus Friis (Rdio co-founder), Atomico and Skype.
Warner Bros. Records Chairman Rob Cavallo has joined Rdio’s board, which already included Mark Dyne (CEO of Europlay Capital Advisors), co-founders Janus Friis and Niklas Zennstrom (the original founders of Skype), and CEO Drew Larner.
Despite what the name might suggest, Rdio is not another Internet radio service like Pandora or, where you can’t choose exactly what you want to hear. On Rdio, users pay a monthly subscription fee ($5 for basic or $10 for premium) to gain complete, on-demand access to the service’s library of 100 percent licensed music. All four major labels are on board: EMI Music, Sony Music Entertainment, Universal Music Group and Warner Music Group.
Understanding that some people might be hesitant to (gasp!) pay for music, especially when you don’t actually get to own an MP3, Rdio offers a free seven-day trial. No credit card is required. The company hopes that people will get so hooked on the service’s vast collection and high-quality song files (256 kbps MP3), that they’ll have no choice but to sign up once the trial ends.
"We are changing the way we find and listen to music,” said Janus Friis, Rdio co-founder. “Anything and everything is instantly available from any computer and phone and easily shared with our friends. The days of expensive music downloads are coming to an end.”

There was a time when everyone was waiting for Spotify to forever change the music industry, but the startup has yet to make it stateside from its Swedish and UK origins. Meanwhile, customers are starting to turn to services like Rdio and MOG, a similar music subscription music service.

In fact, they are very similar. Both cost $5 per month for the basic service by which users can stream unlimited music to their computers. In addition, both offer $10 per month premium plans that also give users the ability to take songs with them and stream music to their mobile phones.

Rdio says the new funding will be used to expand to new platforms and regions as well as to hire more employees.

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Pandora, the leading internet radio service, gives people music they love
anytime, anywhere, through a wide variety of connected devices: laptop and
desktop computers, smartphones, connected BluRay players, connected TVs,
etc. Personalized stations launch instantly with the input of a single “seed” –
a favorite artist, song or genre. The Music Genome Project®, a deeply
detailed, hand-built musical taxonomy, powers the personalization or
Pandora. Using this musicological “DNA” and constant listener feedback
Pandora crafts personalized stations from the more than 800,000 songs that
have been analyzed since the project began in January 2000.
More than 75 million people throughout the United States listen to
personalized radio stations for free on Pandora through their PCs, mobile
phones and devices such as the iPad, and connected in-house devices
ranging from TVs to set-top boxes to Blu-Ray players. Mobile technology has
been a significant factor in the growth and popularity of Pandora, starting
with the introduction of the Apple app store for the iPhone in the summer of
2008. Pandora instantly became one of the most top downloaded apps and
today, according to Nielsen, is one of the top five most popular apps across
all smartphone platforms.

Pandora is free, simple and, thanks to connectivity, available everywhere
consumers are – at the office, at home, in the car and all points in between.
In 2009 the Company announced that Pandora would be incorporated into
the dashboard in Ford cars via SYNC technology; GM has already followed in
announcing plans to integrate Pandora into its vehicles and Mercedes-Benz
introduced their Media Interface Plus device that works with the
free Pandora iPhone app to provide direct control of Pandora from in-dash
stereo controls. This was all great news for the millions of Pandora listeners
who had been plugging their smartphones into car dashboards to listen to
personalized stations while driving. More than 50 percent of radio listening
happens in the car, making it a crucial arena for Pandora.

Today tens of millions of people have a deeply personal connection with
Pandora based on the delight of personalized radio listening and discovery.
These highly engaged listeners reinforce the value Pandora provides to: 1)
musicians, who have found in Pandora a level playing field on which their
music has a greater chance of being played than ever before; 2) advertisers,
who benefit from the multi-platform reach of Pandora, as well as its best
practices in targeting consumers for specific campaigns; 3) the music
industry, which has found in Pandora a highly effective distribution channel;
and 4) automobile and consumer electronics device manufacturers, who have
noted that incorporating Pandora into their product makes it more valuable
to consumers.

Pandora continues to focus on its business in the United States. The radio
arena has never been hotter, thanks to technology that enables radio to be
personalized to the individual and more accessible than ever before. Right
now millions of people listen to Pandora in the United States and we hope
someday to bring Pandora to billions of people around the world.

• 2000 – Tim Westergren’s Music Genome Project begins.
• 2005 – Pandora launches on the web.
• 2008 – Pandora app becomes one of the most consistently downloaded
apps in the Apple store.
• 2009 – Ford announces Pandora will be incorporated into car
dashboard. Alpine and Pioneer begin selling aftermarket radios that
connect to consumers’ iPhones and puts the control and command of
Pandora into the car dashboard.
• 2010 – Pandora is present on more than 200 connected consumer
electronics devices ranging from smartphones to TVs to set-top boxes
to Blu-ray players and is able to stream visual, audio, and interactive
advertising to computers, smartphones, iPads, and in-home connected


Joined Vator on is a social networking company which revolves around its music recommendation engine. Recommendations are made by comparing user data to the rest of the user community. This community gives more potential to grow into media other than music. This is most likely a reason why media giant, CBS, acquired for $280 million in May of grew from very modest funding compared to its competitors Pandora, ilike, MyStrands and others.

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