On-demand music subscription services are lining up on either side of advertising. Three-year-old Rdio, often overlooked in a market filled with well-known brands, is betting advertising is the key to its growth.
Starting Thursday, Rdio listeners in the United States can listen to unlimited free music on the web. These in-stream advertisements have been expected since Cumulus Media acquired a stake in the company last September. The deal allows Rdio to receive promotional consideration on Cumulus’s network of 525 broadcast radio stations while utilizing the Cumulus sales team to book advertisements for the service.
The company will use advertisements, also debuting Thursday, to pay for that free listening. The advertisements will be “a mix of new feature announcements, messages from partner brands, notifications about exclusive content, and other helpful tips,” according to the Rdio blog post that announced the changes.
Listening on the Rdio mobile app offers only limited free listening. Free radio stations, introduced in October, give nonpaying listeners a non-interactive experience similar to Internet radio services like Pandora. On-demand listening, or the ability to choose the song or personal playlist, is available only to paying subscribers.
Subscription music is taking two forms. Rdio has followed the model established Spotify and Deezer, expected to launch in the United States this year: use free, advertising-supported listening to drive paid subscriptions. Rhapsody, Google Play All Access, Sony Music Unlimited and Beats Music, to launch Jan. 21 do not offer free listening. This major difference in philosophies will play out in 2014 as Beats Music and Deezer attempt to catch market-leading Spotify.
