Rdio launches free model, leads with Internet radio

Music streaming service Rdio has launched a significant update in 20 of the 60 countries in which it operates, offering users free Internet radio and a suite of new features.

Rdio worked with labels and publishing partners to create an ad-supported business model that offers stations for free based on users’ favourite artists. With its 30 million+ catalogue of songs, the service claims they now offer 15 times more music than the leading Internet radio service and is the only service which offers consumers the ability to listen to radio any way they want.

Chris Becherer, Rdio’s SVP of Product told TMN that while it introduced radio stations a year ago, the ‘Stations First’ update is one of the biggest since its launch in 2010.

“There isn’t really one service that has filled that market need of doing both [radio and streaming] really well and when you think about it there’s two sides to the same coin, every listener is going to have an appetite for both at some point in their listening lives.”

The update, now available on iOS, Android, web and on its partner Roku’s streaming player, stemmed from feedback from Rdio users who are bifurcating their investment over multiple services to fulfill different needs.

“We’re always listening to users, users tell us what they think everyday based on what actions they perform in the app or which sections in the app are getting the most attention, we also hear from our users through customer support channels, tweets, app store reviews and we do occasionally do what we call first party research.

“In general what we’ve heard was that our users were going to other services to listen to free radio stations. We thought that didn’t make sense, we think that a great service allows you to listen any way you want. So we wanted to create a service which had the same design service and details that our paid-for service, which gets such great reviews, has.”

Rdio’s research also found that users didn’t understand its heavy rotation landing page in-app, which lead to the creation of a ‘Feed’, similar to that found on Facebook. The Feed takes a time-based approach to music recommendations which refreshes with what Rdio are calling ‘Stories’ – 20 curated posts based on users’ in-app actions.

Other new features include the branded ‘Artists To Watch’, created by a team of experts who have worked with labels and industry figures to identify emerging bands that are on Rdio; ‘Keep Listening’, a set of stations the user has been listening to most recently; an update to last year’s implemented YouFM, a personalised station based on what you’ve liked on Facebook and what you ‘like’ within your Rdio feed, and the ability to listen to albums and singles both on and offline through its paid subscription.

“Rdio is known as a great service for collecting albums and songs but in order to credibly call ourselves Stations First, we needed to offer the ability to collect stations as well as albums and playlists,” Becherer told TMN.

Leading with stations provides strategic value for Rdio through YouTube’s lower licensing fees and partnerships with advertising partners globally. Rdio told TMN they are also looking into sponsored stations, which could be dropped into the home feed.

Users of Rdio’s free subscription platform will on average hear 2-4 minutes of audio ads or 6-10 ads per hour, depending on how long they tune in.

The paid subscription, Rdio Unlimited, offers offline listening of albums and singles, ad-free streaming, the ability to rewind and skip tracks, a more informative Feed featuring album-focused Stories, comments from friends and recommendations and a Dig Deeper feature, which recommends albums from bands you like that you haven’t heard on Rdio.

Rdio Unlimited is $11.99 a month with the first 30 days free; Rdio also offer discounts to students and families.

Rdio told TMN it streams at 192kbps, but are working to convert its entire catalog to AAC format, allowing an option for high fidelity streaming at 320kbps for subscribers.

In terms of royalties, Rdio told TMN it works with labels, distributors, publishers and performance rights organisations (PROs), who they license the content from and pay for access to their music from Rdio subscribers. From there, they distribute the revenue according to agreements with artists.

Interestingly, Spotify’s Director of Economics Will Page will hold a mini-keynote at BIGSOUND next week where he’ll unveil the competitor’s consumer data and analytics. The survey results will show how streaming services have impacted illegal downloading, how streaming has enabled Australian music to cross borders and how access to Spotify’s analytics can affect Australia’s live industry.

Regardless, Australia is still a highly competitive market with some 19 digital music services aiming to make a profit. February this year saw the closing of Deezer’s Australian outpost and last week Guvera’s Australian General Manager Scott Hamilton departed following a global restructure of the service.