Rdio’s secret weapon in the streaming wars may be country music

August 26, 2014
August 26, 2014

In case you didn’t notice, there is an epic battle brewing over how you listen to music, between the titans of the tech world like Apple, Google and Amazon, and streaming-music companies like Spotify and Pandora Media.

One company that brings a unique perspective to this debate is Cumulus Media. As the second-largest owner and operator of broadcast radio stations in the US, it has one foot in the past, but it also has one in the future as a major investor in streaming music operator Rdio.

It’s nearly a year (paywall) since Cumulus bought a “significant stake” in Rdio, the streaming-music platform built by the founders of Skype, and it is clear the company is taking the investment very seriously.  On a recent earnings call, it described Rdio as “a key pillar of our mobile strategy.”

Cumulus Media CEO Lewis Dickey tells Quartz in an exclusive interview that he thinks there’s plenty of room for many different streaming products to flourish. “I don’t think this is a winner-take-all game, like search or social, where they [Google and Facebook] are tough incumbents to dislodge. This is similar to the global automotive industry. You are going to see a handful—four, five, six players [survive]. It’s a massive market, just like the automobile industry.”

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At the moment, there’s a wide range of business models: on-demand streaming (the ability to choose individual songs, like Spotify); custom playlists (the ability to create a personalized radio station by choosing a song or artist, like Pandora), as well online streaming of national and local broadcast radio stations (Sirius XM, iHeart Radio and TuneIn Radio all operate in this space).

Rdio, Dickey says, ticks all of those boxes. “We think of it like Microsoft Office. You have Outlook, Word, Powerpoint and Excel. On their own, each one is powerful, but when you put them all together, the sum is greater than the parts.”

But it’s an extremely crowded landscape, so  how will Rdio stand out? In part by offering access to Cumulus’ exclusive content, mainly centered on country music. Rdio and Cumulus are in the process of integrating Cumulus’ “NASH” country music stations (they will be available on a separate channel) with the internet platform. There are an estimated 90 million country music fans in the US, so it could be a huge opportunity, and point of differentiation.

Cumulus’ sales force will sell advertising on Rdio’s yet to be launched, free service. Dickey is not concerned about cannibalizing existing broadcast revenue. “The rates for streaming are moving up pretty rapidly. It stared off it was basically a giveaway, now you are commanding double digit CPMs (cost per impression).”

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