Bloomberg News

Rdio Joins With Oi to Expand Music Streaming to Brazil

November 02, 2011

(Company corrects number of customers in seventh paragraph, price in 12th paragraph.)

Nov. 1 (Bloomberg) -- Rdio Inc., an online music service started by Skype co-founder Janus Friis, is expanding to Brazil with that country’s largest telecommunications company.

Oi Rdio begins service this week, Drew Larner, chief executive officer of the San Francisco-based company, said in an interview. Oi is operated by Telemar Norte Leste SA.

Rdio, which began operations in August 2010, is seeking subscribers internationally after London-based Spotify Ltd. entered the U.S. in July. The company signed its first foreign deal with Canada’s Telus Corp. three months ago and plans to expand into Australia and Germany early next year, Larner said.

“This is the beginning of what will be our international roll-out into more territories,” Larner said. “We feel like it’s green fields down there.”

Pronounced Ar-dee-o, the closely held company began offering limited free song streaming without ads last month as it battles for U.S. customers with Spotify and Pandora Media Inc., which include commercials with their no-cost services.

Rdio, which also competes with rival music services from Mog Inc. and AOL Inc., aims to convince free users to pay for unlimited commercial-free plans at $5 to $10 a month.

As in Canada, Rdio chose a business partner in Brazil with a large existing subscriber base, Larner said. Oi’s 67.1 million customers in Brazil will gain free access to Rdio for a limited time. Customers of Telus, based in Vancouver, received six months of free service, he said.

Rdio hasn’t settled on its plans for Australia and Germany, Larner said. The company has rights agreements with all four major music labels.

Talks With Providers

“We will be opportunistic,” Larner said. “It won’t be a prerequisite to launch in each territory with a partner.”

Rdio is in talks with Internet providers, handset manufacturers and mobile phone service providers for a partnership in the U.S., Larner said.

In Brazil, Rdio will also be available to non-Oi subscribers, with the Rio de Janeiro-based telecom company handling billing and administrative services, Larner said.

Prices will range from 8.99 reais ($5.15) a month for unlimited Web access to 14.90 reais for mobile access as well, Rdio said.

Brazilian listeners will be able to access almost all of Rdio’s offerings in the U.S. and the company is signing agreements with local record companies to add the country’s biggest acts, Larner said.

“Brazil is a very vibrant market,” Larner said. “It was one of the markets we targeted early on.”

--Editors: Rob Golum, Stephen West

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


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