Rdio, a subscription music service, has signed a deal with Cumulus Media, a U.S. radio station owner that runs about 525 radio stations.
The New York Times says the deal will see Rdio buying a big stake in Cumulus’s parent company, and thus gaining access to the radio station’s content so it can drive its own streaming media services. Cumulus will also be running commercials to promote Rdio’s free streaming over the Internet–an ad-supported service that’s due by the end of the year. The value of Cumulus’s content is estimated at over $100 million.
Rdio is seeing success as it competes against bigger names like Spotify and Rhapsody, but it doesn’t disclose its user numbers. The Cumulus move is seen as a vehicle for Rdio to move to an ad-supported freemium model, which would place the company in a better position to compete against its rivals. Apple is poised to announce iTunes Radio, its own streaming music service, which is free with ads and has a paid ad-free model. Rdio has previously tried interesting tactics to grow its subscriber base, including paying musicians for attracting subscribers.
[Image via Flickr user: Joshua Blount]