On-demand music subscription service Rdio announced the launch on Wednesday of Vdio, a video service that streams movies and TV shows. Vdio (pronounced vee-dee-oh) becomes the first video service offered by a standalone company that also offers an on-demand music subscription service.

The service is currently open to subscribers of Unlimited paid tier of Rdio in the U.S. and U.K. A user who logs in to Vdio will find the two accounts have been linked and social connections have been imported. To entice Rdio users to start using Vdio, all Rdio Unlimited subscribers have been given a $25 credit (£20 in the U.K.). The deal will be extended to anyone who subscribes to Rdio Unlimited in the next 60 days.

Vdio has a transactional model similar to that of Amazon On-Demand, not the all-you-can-eat subscription model of Netflix and on-demand music subscription services like Rdio and Spotify. The way video distributors stagger their releases influenced that decision. Larner explains that Rdio wanted to provide the best, newest content when it rolled out the service. Because of studios' windowing strategies, a movie or TV show will get a DVD and on-demand release before it's licensed to a subscription service.

But the company believes in the subscription concept -- Rdio offers unlimited access for a monthly fee -- and Vdio could have a subscription element at some point in the future, says Rdio CEO Drew Larner. "It's a natural progression for us to look at something where Rdio and Vdio are bundled together for 'x' dollars a month."

The debut of Vdio puts Rdio in a rare group of companies that offers both on-demand music and video services. Sony offers both Video Unlimited and Music Unlimited and Microsoft offers both movies and music through Xbox. However, Rdio is the only standalone, small company to have both types of services. A Business Insider report last month said Spotify is planning to launch a video service but no details have materialized.

Rdio co-founders Niklas Zennström  and Janus Friis have a history with both music and video. They founded the file-sharing service Kazaa and Joost, an Internet TV service that used peer-to-peer technology, in addition to VoIP service Skype. Larner says Friis has never lost his love of content. " I know he has had this vision of having a global entertainment platform."

Vdio will look familiar to Rdio users. The black background and orange logo are a contrast from Rdio's white background and blue logo. Otherwise the two platforms are remarkably similar in look and feel. Just as Rdio does with albums, Vdio allows users to see which friends have viewed specific titles. Vdio also has Rdio's sharing and playlist features, although a playlist is called a "set" at Vdio.

Videos can be viewed only on either an iPad app or the web. Additional platforms will be added in the future.

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