Rdio will launch free, ad-supported service later this year, add traditional radio content

Music subscription service Rdio will launch a free, ad-supported service later this year, according to Cumulus (s CMLS) CEO Lew Dickey. Cumulus, which is better known for its terrestrial radio stations, became a significant investor in Rdio last year. Dickey revealed the plans for a new ad-supported Rdio offering during his company’s Q1 earnings call this week, where he said that Rdio will also finally share user numbers once that new service is launched “in the back half of the year.”
Rdio has slowly been moving toward offering free content over the last few months, introducing free and ad-supported streaming on the web as well as a more Pandora-like free streaming experience on mobile devices. But the plans previewed by Dickey this week seem to go a lot further, and apparently also include adding a lot of new content to the service — a step that could ultimately alter what Rdio is all about, and set it apart from competitors like Spotify.
Dickey said that he intends to add segments from Cumulus morning shows and other non-music content. Some of that content will come from WestWood One, a radio network that produces sports and talk show content and that was acquired by Cumulus by the end of last year. Some of WestWood One’s assets include audio streams of the NCAA Finals and the Olympics as well as awards shows like the Grammys.
Dickey said that his strategy was to turn Rdio into a kind of digital destination for all kinds of Cumulus content. “In one app, people are able to have all of that at their disposal,” he said, adding: “It really becomes our mobile strategy, if you will.”
Cumulus teamed up with Rdio last September, and at the time promised to promote Rdio through its terrestrial radio network and help the service to sell advertising. Both companies didn’t disclose any financial details of the transaction at the time, but industry publication RAIN recently reported that Cumulus would give Rdio a $75 million promotional budget in exchange for a total of 20 percent of equity in the music service.