Rdio rolls out free music in Europe to challenge Deezer and Spotify

Rdio just announced that it will offer 6 months of free music streaming in another 14 countries, most of them in Europe. The announcement comes after Rdio already rolled out a 1 year free trial in the US.

The countries Rdio added today are: Australia, Belgium, Canada, Denmark, Estonia, Finland, France, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden and the United Kingdom. Users in those countries can now listen to over eighteen million songs in the Rdio database without even having to enter payment information.

The music will not be interrupted by ads, although there is a limit to the number of songs that free Rdio subscribers can listen to. If you want to keep using the service afterwards, Rdio uses the same subscription rates as Deezer and Spotify: € 4,99 for unlimited web streaming, € 9,99 for unlimited streaming to all mobile devices.

Rdio was a bit late to the streaming music game: it came out of beta in August 2010, while Deezer launched for the first time in 2006 and Spotify in 2008. On the other hand, the team behind Rdio are the Skype twins Niklas Zennström and Janus Friis, and they have already shown what they are capable of.

And they have deep pockets too. Friis and Zennström both did very well when selling Skype (they sold it twice). Today, Niklas Zennström is also CEO and founding partner of Atomico, one of Europe’s top VC funds.

Still, it’s clear that they’ll have some catching up to do. Rdio received $ 17,5 million in funding to date, according to Crunchbase. Spotify is at $ 188 million and Deezer at $ 149 million. In terms of users, the gap is sizable: Spotify says it has about 20 million subscribers, of which 5 million are paying customers. Deezer has 22 million users for 1,5 million paying customers.

According to ArcticStartup, Rdio has about 100 000 active users, and the free trial is a way to add more users. The free trial is also something of a change in strategy: Rdio previously eschewed free trials, because it wanted to monetise its users from the start.

The streaming business is becoming very crowded very quickly, which probably means that margins everywhere will come under pressure: music is fast becoming a commodity like tapwater, and the streaming services will have to be careful not to become low margin ‘data pipes’.


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Raf Weverbergh

Editor of whiteboard. Raf Weverbergh was a magazine journalist whose work appeared in magazines like Rolling Stone, Playboy, Mail on Sunday, Publico and South China Morning Post. He is the co-founder of FINN, a corporate communications agency where he advises startups and multinationals on their PR and Mustr, the easiest media database for PR professionals. You can contact him on Twitter, Linkedin or Skype (rafweverbergh).

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