Recently it was announced that Rdio would be filing for bankruptcy and be acquired by Pandora. This came to a surprise to many as it felt as though the bankruptcy announcement and Pandora acquiring Rdio happened simultaneously. So with millions of users, an aesthetically pleasing app, and being one of the first streaming services, where did it all go wrong for Rdio?
Before we can discuss the demise of Rdio let’s start with what they did correctly. Rdio was one of the very first streaming services available. They had a good year or so head start on Spotify in terms of a worldwide release. They also worked on their app for over two years before it was released. So not only did they have a head start when launching, but they had a more aesthetically pleasing app. Even today if you look at both apps I’m pretty sure most would say Rdio looks better.
Concrete numbers on Rdio users are hard to find as they do not explicitly state or reveal those numbers. Still, the numbers are considered, by most, to be lower than Spotify’s. Despite having a lower user base than Spotify the Rdio users had brand loyalty. Rdio had steady growth, and very little amount of users unsubscribing. People who used Rdio (such as myself) liked it’s sleek design and preferred it’s service over Spotify. So why did Rdio die?
There were several key mistakes Rdio made that caused it’s current situation. One was the error of not having a free option earlier. During it’s initial launch only a $5 per month option was available. This is a good deal, but Spotify had a free option immediately along with a pay per month option. This meant people who were skeptical or currently unwilling to pay chose Spotify over Rdio. When a company (especially one providing a service online) begins, the main goal should not be to turn a profit, but to gain customers. By trying to be profitable/ sustainable too soon they had a better financial situation, but Spotify grew faster. Essentially they were winning the financial battle but losing the user war.
Marketing/ management was also problematic. The head of marketing was constantly changing so there seemed to be a lack of direction. Also, issues such as the pronunciation were always a problem. People found the name hard to say/ confusing. This may seem like a petty issue, but when trying to gain consumers these are the kind of things that can make or break a company. According to many former workers there seemed to be no plan/ direction on how to market Rdio. They were successful in gaining some funding, but they did not build a large enough user base to be sustainable long term.
My personal experience with Rdio was relatively positive. I used the platform as a way to discover new music, revisit old favorites, and to create playlists. I tried all the streaming websites before and I chose Rdio because of it’s sleek design and reliability. Despite the fact that most people I know use Spotify, I liked Rdio more and I wish it wasn’t going the way of the Dodo bird.
The impact that Rdio’s death will have on the state of music is uncertain. You can say Rdio just made too many mistakes early on and that it’s death is not an indictment of the state of music today. Or you can say that in today’s world, people are not even willing to have unlimited music for as little as $5 a month, the music business is in bad shape, and even those streaming services that are still around have yet to turn a profit. So while some people may be nonchalant over Rdio’s death, be warned, your favorite streaming service could be next.