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Pandora to Acquire Pieces of Rdio

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mvcg66b3r

Pandora announced Monday is will acquire "several key assets" from on-demand streaming service Rdio. The deal will cost Pandora $75 million and is contingent on Rdio filing for bankruptcy.

While details are scarce, the deal appears to be positioned as an acqui-hire that will facilitate and speed Pandora's launch of an on-demand service. "Adding Rdio's impressive technology and talented people will fast-track new dimensions and enhancements to our service," said CEO Brian McAndrews in a statement.

The deal is expected to close in early 2016, according to a source familiar with the transaction. Upon the bankruptcy court's approval of the proposed transaction, Pandora will acquire "technology and talent" and will wind down the Rdio-branded service, according to the press release.
Click to expand...

http://www.billboard.com/articles/business/6762636/pandora-acquire-rdio
 
All this means is ... Cumulus has decided Rdio can't compete, they found a willing buyer for the assets in Pandora (who now gets even bigger, as if we needed that) and the bankruptcy lets Cumulus take a writedown for tax purposes.

Not much to see here.
 
Cumulus actually already took the write-down, last quarter. From my reading of the notes, it sounded like they wrote down their entire investment in Rdio.
 
I never understood what the attraction was in Rdio. Terrible idea, terrible investment, and from what I can see, Cumulus was never really committed to it. It seemed like a way for them to say they had a digital plan without actually having one. In other word, lip service.

Streaming is bad for pretty much everyone, except maybe users. The songwriters hate it, the musicians hate it, the artists hate it, the labels hate it, and the streaming companies lose money. Is this really any way to run a business? The only guarantee is that the royalties will be going up again, making it even more unprofitable.

My question is does Cumulus still have any further obligations when Rdio goes bankrupt?
 
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