Pandora Looking for Help
by Acquiring Rdio’s IP

IP News and Information

As Pandora Media, Inc. continues to face tough competition from Apple, Inc. and its recently released Apple Music platform, the company is looking for new ways to stay competitive and keep up with the big boys in the music streaming industry. As the company looks to develop and strengthen its offerings it is looking at acquisitions as means to that end. The company recently announced a plan to acquire Rdio, an on-demand music streaming service, for a reported $75 million. The company hopes that by having more offerings in its stable it can stay relevant. While Pandora has been popular because of its Internet radio service, the many different on-demand streaming options are making it difficult to add new subscribers and keep existing ones.

Attractive IP

So why did Pandora see Rdio has a good fit to its company? It all comes down to Rdio’s intellectual property. As part of the deal, which still needs to pass some hurdles before final approval is given, Pandora plans to expand its reach to all music platforms by offering all of “radio, on-demand and live music.” However, the acquisition is not a total takeover of the company. Rdio, which is currently buried in debt, filed for Chapter 11 bankruptcy protection earlier this month. Pandora is not planning to take over operations of Rdio because Rdio is planning to cease operations and shut down after the acquisition. So what exactly is Pandora buying? The deal actually involves Rdio’s intellectual property.

Global Reach

That means if the deal is approved then Pandora would assume ownership of Rdio’s technology and intellectual property. That could be a big boost to Pandora as it attempts to stake its claim in the on-demand music streaming service. Currently, Pandora only operates in three countries, which means having Rdio in its stable would give it instant access to countries all over the globe. That’s’ because Rdio, which has been a popular service since it was founded in 2010, has operations in more than 100 countries worldwide. However, despite its global reach it has not been able to overcome the strength of the competition from the likes of Apple and Spotfiy during the past few years, which has taken its toll.

Overwhelming Debt

While just two year ago, Rdio was reportedly worth $500 million, the company is now incurring an operating loss of about $1.85 to $2.4 million every month. As the deal currently stands, Rdio is set to sell its intellectual property and technology to Pandora for $75 million if no other bids are made at auction. Additionally, any offer that is made would have to be at least $81.25 million. If no qualifying offers are made before the deadline, then Pandora will be allowed to take over Rdio’s IP.

Monetization Could Be The Answer

This is yet another example of the independent value that intellectual property can have. While Rdio is set to go under, its IP still has value to another company. That could mean a $75 million cash influx to help pay off its debts and wash its hand cleanly of the situation. Selling IP can be an excellent way to create revenue, get out of debt or boost income. If you are looking to sell or license your IP, then click here to contact IPTrader today for help.