Streaming music service Rdio is planning to shut down and sell "key assets" to Pandora.
Pandora announced the pending acquisition today, saying it will spend $75 million to buy "technology and intellectual property from Rdio" and hire "many members of Rdio's team." Pandora is not buying the full company. But using Rdio technology and staff, the buyer "expects to offer an expanded Pandora listening experience by late 2016, pending its ability to obtain proper licenses."
Pandora and Rdio have different business models. Pandora lets customers create radio stations tuned to their tastes, but without allowing them to play any song they choose at any time. The basic service is free, but paying users get an ad-free experience and the ability to skip a greater number of songs.
Rdio offers stations for free, with ads, while charging for on-demand plans that disable ads and let customers keep music libraries of specific songs. The different business models require different licensing agreements with music labels. Pandora's statement that it will change its product "pending its ability to obtain proper licenses" could indicate that it will start offering a more Rdio-like service.