Layoffs Sweeping Through Rdio…

The layoff ax is making its way through Rdio, too.

Rdio is making across-the-board staff reductions.

A spokesperson told TechCrunch that the cuts are being made “to improve its cost structure and ensure a scalable business model for the long-term“. There are rumors circulating that these cuts might affect up to one-third of Rdio’s workforce.

Prior to the cuts, Rdio had about 130-140 employees, with roughly 30-40 getting chopped according to one source to Digital Music News.  The development follows a relative surge in paid subscribers for Rdio: according to other sources inside the organization, Rdio now has over 250,000 paying subscribers.  Separate sources also told TechCrunch that 90 percent of these subscribers are on the unlimited plan, the priciest one available. But those gains are coming at a cost: Rdio has been spending a large amount of money on marketing and advertising, including a splashy, prominent billboard in Times Square.

Numbers-wise, Rdio’s competitors are dominating: Spotify has about 6 million subscribers, Muve Music is approaching 2 million, and Rhapsody has about one million. Deezer will soon be entering the US market, and Beats Music is ‘coming soon’.  The question is where that puts Rdio, a great service that seems to be getting lost in the super-saturation.

In a move unrelated to these cuts, CEO Drew Larner is temporarily filling his role until a new, replacement CEO is found.  Earlier this year, Larner said that he was leading the search for a new CEO; once the replacement is found Larner will continue as executive chairman.

14 Responses

  1. Rdio User

    Wow those numbers are unbelievable. Rdio is such a better than Spotify or Rhapsody.

    • Casey

      They are a good service, but they have made a lot of strategic mistakes. They are great at innovating. To the point that they leave out the basics. For example, you still can’t listen to music you own with Rdio. Not with the web player, software player, or app. That is a major blow to their potential. Especially with new release windowing. Can’t get it on Rdio? You are SOL unless you want to use two different players, which isn’t user friendly nor convenient. It’s not “social” they say. But how is that “social” working out for them now? All this work, relatively little headway.

      • jw

        Agreed. Over the years, local file support was the best feature they’ve ever added. I can’t imagine using a streaming service without it.

        Rdio’s design language is pretty gorgeous, but Spotify’s UX is locked down.

    • Blahblahblah

      Seems as though this article might be comparing Rdio paying subscribers to it’s competitors’ overall subscribers. I pay for and prefer Rdio. Good luck to them.

  2. TuneHunter

    We need HALF A BILLION subscriptions to just get back to 1999! Good luck investors and streaming dreamers.

    Let’s stop this desperation and start conventional sales of music. Current pocket-pickers and HOMELESS discovery services like Shazam, Echo Nest or lyric ID guys will double the business in 36 months.

    • jw

      I should know better, but how on earth do you figure 500m?

      650m cds were sold in 1999. At $15/pop, that’s $9.75b. 500m subscribers at $10/mo is $60b, more than 6x the revenue. And “to just get back to 1999?” Wasn’t that pretty much the most profitable year for recorded music of all-time?

      Everything you say is retarded.

      • TuneHunter

        12 x $5/moth = 60per sub/yr half a billion will bring 30 billion add ten from ads and you are in 1999 = 40 billion.

        Actually you are in mid 80s 1999 40 billions in todays dollars is $56 billion.
        And do not argue this $5 – or I will prove you that it will be less with 500MMMs

        • jw

          The article clearly states that 90% of subscribers are the $10 plan. So that’s 450m at $120/yr + 50m at $60/yr, which is $57b, + $10b from ads (I dunno where you got that figure from, but let’s go with it) & you have $67b.

          And where is $40b coming from? There’s no way that’s just sales of recorded music. Because, like I said, 650m cds were sold in 1999, which were 95% of all recorded music sales, & I don’t recall paying $61 per cd back then.

          Feel free to prove whatever you want.

          • jw

            You’re taking that figure out of context. There’s a difference between the size of sales of recorded music & the value of the entire music industry.

            Total reported album sales (all formats) in 1999 was 754.8m. At $15/ea, that’s $11.322b, max. That’s what streaming has to make up.

            If other streaming services’ unlimited-to-premium ratio is anything like rdios, that means between Spotify, Rdio, Beats, Deezer, etc, we’re looking at ~100m subscribers. As you start to account for advertising, that # starts to drop, I would hazard to guess as much as 20-30%, but that’s just a shot in the dark, really.

            You really need to dig deeper into your numbers.

          • jw

            *edit* I was using soundscan #s vs IFPA #s. My bad. I needed to dig deeper into my #s. I apologize.

            3.5b was the total album sales in ’99, US was only 38% of that.

            However, that’s still closer to 325m subscriptions than 500m subscriptions ($36.9b / $114), not even counting radio subscriptions or advertising. If we subtract 33% for advertising (based on your figure), that’s like 215m, well less than half of your figure.

            And in the longterm I don’t see that as a big problem. I could see streaming breaking into the mainstream in just a couple of generations of laptops/smartphones.

          • TuneHunter

            Streaming is the way to go and I am not objecting to it. The problem is all discovery tools that come as a part of the package for free.
            Shazam with almost 400 million users never in 12 years made a single dollar of profit.
            If we start Discovery Moment Monetization at just 39c a tune we will have 100 billion dollar industry before 2020. If we continue with Shazam, The Echo Nest similar tune machine or Google lyric ID as is we are destine to sale “zero”. Old farts at Apple will switch to free too!
            …and again ads and subs even if you get to one billion folks will never bring back 1999. (Counting in constant dollars)
            Conclusion: we need more ambition and creativity in music business – big money is around us and we should grab it.

          • jw

            Shazam will never charge for music discovery. There’s more money in it for them from advertisers. Theoretically the NFL could make a lot of money charging fans to watch the Super Bowl, but not as much as can be charged for advertisements. I’m sure Shazam knows exactly what percentage of Shazams would convert to sales at different price points, & yet they’re pursuing advertisers. A pay wall would dramatically cut their active user base, & make users less likely to Shazam an ad if they aren’t sure it’s going to be free, both of which make it harder for them to sell their services to advertisers. A pay wall just doesn’t fit into their business model. It’s never going to happen.

            But I don’t see an issue with streaming services accumulating a couple hundred million worldwide subscribers over the next ten years or so. Rdio are, themselves, hoping to accumulate 25m subscribers. Cloud-enabled software on smart phones, computers, gaming consoles, etc are going to make the idea of a music collection feel very passé, & over time nearly all music listening will take place over the cloud. There’s already no reason to store published media locally. When the iPhone launched, who thought they would end up being over a billion consumer smart phones worldwide, each with a data plan? Subscription streaming will be an outgrowth of mobile.

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