Rdio and Cumulus will announce deal to create free, ad-supported music

It seems that Rdio, the streaming music service founded by Skype, is making some big plays to overtake its competition. It launched personalized radio stations last month to keep up with rivals Pandora and Spotify. An now, according to an exclusive report from the New York Times, the company has reached a deal with radio broadcaster Cumulus Media to bring a free, ad-supported streaming option to the public.

According to the article, Cumulus will gain a “significant” stake in Rdio’s parent company, Pulser, in exchange for access to programming and advertising on 525 Cumulus-owned radio stations across the country. The company will also be the main broker in selling ads on behalf of Rdio to lay the seeds for a free version of the platform. Further details of the deal will be announced sometime later today, when both companies publicly confirm to investors.

A free, ad-supported option will be the crucial piece for Rdio, which only operates on $5 and $10 subscriptions. A free-to-play program will enable the company to close the user gap with Spotify and compete for the streaming music spotlight. While Rdio has yet to release subscriber numbers, Spotify says that it entertains 24 million active users every month, although just six million of those users pay a monthly subscription. With Cumulus throwing 1,500 sales agents towards building a viable ad-system, Rdio could quite easily multiply its current user base.