Pandora’s acquisition of Rdio is bad news for Canadians who stream music

The acquisition of streaming music service Rdio by Pandora will leave the former company’s Canadian users looking for a new music provider because Pandora doesn’t service the Canadian market.

Last week, Pandora announced it would, for (U.S.) $75-million, acquire certain assets from the struggling Rdio dependent upon Rdio gaining court approval for bankruptcy protection.

“The Rdio team built an acclaimed product and technology platform that has consistently led innovation in the young streaming industry,” said Rdio CEO Anthony Bay of the deal. “I’m pleased that many members of the Rdio team will continue to shape the future of streaming music, applying our tradition of great design and innovative engineering on an even larger stage with Pandora.”

Founded in 2010 by Skype founders Niklas Zennström and Janus Friis, Rdio was an ad-free service that was available in 85 countries. Pandora says many Rdio employees will be offered roles with Pandora.

So should Canadians petition Pandora to come north of the border? That likely won’t help. Pandora, to be clear, wants to be here. In 2010, the site explored the possibility of coming to Canada but found a roadblock in the form of CRIA, the Canadian Recording Industry Association, an organization comprised of Canadian record labels. CRIA wanted 45 per cent of Pandora’s gross revenues in Canada or three-quarters of a penny for each song streamed. Pandora founder Tim Westergren claimed those rates were 20 times more than AM/FM radio pays to play a song. Pandora pays just two-tenths of a cents per play in the United States.

“These rates … are astronomical,” said Westergren. “As long as rights societies take this approach, they will prevent Pandora from launching to Canadian users.”

CRIA’s response was puzzling to say the least. Its president, Graham Henderson, said Pandora’s business model wouldn’t work because so many Canadians download music illegally.

“Why would you spend a lot of money trying to build a service in Canada when Canadians take so much without paying for it?” he said.

While many Rdio faithful will simply make the jump to other streaming service that are available in the Canadian market, Spotify being the most notable, one fan feels like something has been lost with the service’s exit.

The Atlantic’s Robinson Meyer says Rdio had a certain something its competitors didn’t have. He tried to pin it in a piece called “A Eulogy for Rdio” in which he called the service better than Spotify “…in most every way”.

“Though it endured sometimes faddish redesigns, Rdio almost always made a straightforward kind of sense,” said Meyer. “It gleamed with a well-considered uncomplicatedness that I’ve come to recognize as the residue of good design. Despite one of the most formidable app-design challenges I can think of—how do you make manageable a library that includes a huge portion of humanity’s recorded music?—its iOS app never veered into the ridiculous, as Spotify’s still does, even now.”

Pandora’s acquisition of Rdio is the second large pickup it has made in just a few weeks. In October, the company acquired Ticketmaster would-be rival Ticketfly for $450-million.