Has Apple’s iTunes Radio Claimed Its First Victim?

It’s extremely tough to succeed in the streaming music business — even more so when Apple decides to get involved. One of the best streaming music services today, Rdio, has announced some news that shows just how difficult competing in the industry has become. According to TechCrunch, the music startup from Skype cofounder Janus Friis is “making across-the-board workforce reductions today to improve its cost structure and ensure a scalable business model for the long-term.” These layoffs affect “between one-fifth and one-third” of the workforce, with “significant cuts in engineering.” It’s unclear what these layoffs will mean to the company’s music service, or to Vdio, the video streaming service, which Rdio launched earlier this year. Rdio hasn't released "any user numbers in a while," which could be another sign things aren't good. When they attempted to get updated subscriber data from Rdio, TechCrunch was told:

We are not releasing any numbers at the moment, but we’re thrilled with the traction we’ve seen so far. Since the end of last year (2012) we’ve tripled our number of new users. Also, 90% of our subscribers are now on the Rdio Unlimited tier ($9.99/month) giving them access to Rdio not just on the Web but also through their mobile phone. Our strategic partnerships, and integrations with Facebook, Twitter, and Shazam have all contributed to our continued growth and we’re excited about what’s to come for Rdio in the future.

Rdio first launched in 2010 and offers unlimited music streaming through iOS, the Web, and Mac and PC applications. In April, AppAdvice gave the service an “A” in our latest “Best Streaming Music Services” survey. No one has officially pointed the finger at Apple’s new iTunes Radio service as the reason for Rdio’s woes. Still, its entry almost certainly hasn’t helped. Apple doesn't charge for iTunes Radio, regardless of the platform. By contrast, the only way to listen to music through Rdio on an iPhone/iPod touch and iPad is to pay $9.99 per month. We’ll continue to follow this story, and hope to hear about Rdio's future plans soon. In the meantime, see: Rdio For iOS Updated With New Recommendations Engine And Redesigned Stations Player, Surprise: iTunes Radio Doesn't Seem To Be A Pandora-Killer, After All, and Apple To Expand iTunes Radio To Canada, UK, Australia And New Zealand In Early 2014. Photo: Daily Billboard

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