Cumulus To Acquire Major Stake In Rdio
Cumulus Media is set to announce a deal on Monday to acquire a large stake in streaming music service Rdio.
Update 9/16: Cumulus has issued a statement clarifying Lew Dickey’s comments regarding IHeartRadio being a marriage of convenience.
Some of you have asked about The New York Times reference to Cumulus and iHeart Radio. The reporter used the word “marriage” in his question so the reply included the word marriage. To be clear, the logical decision by Cumulus to pursue business opportunities in the growing digital space — ensuring listeners have access to Cumulus content wherever, whenever they want — should not be interpreted as any disappointment with the existing beneficial partnership between Cumulus and iHeart. Indeed, iHeart has been instrumental in driving in driving huge increases in Cumulus traffic growth and that arrangement is complementary to our deal with Rdio.
Original Report 9/15: As first reported by the New York Times, the deal will enable Rdio to launch a freemium version using Cumulus’ sales teams to sell advertising on top of their existing subscription service. Such a move should enable the site to grow its userbase amidst competition from Pandora, Spotify, Apple’s ITunesRadio, Google Play Music, and Clear Channel’s IHeartRadio.
No money will trade hands in the deal, which will give Cumulus an equity stake in Rdio’s parent Pulser Media in exchange for Cumulus provided content and the sales services. Cumulus stations and programs will curate content for Rdio.
The deal will not affect Cumulus stations carriage on Clear Channel’s IHeartRadio at least through next year in what Cumulus CEO Lew Dickey told the Times was “a marriage of convenience”.