Radio Killed The Video Star: Rdio Shutters Its Vdio On-Demand Service
December 28, 2013

Radio Killed The Video Star: Rdio Shutters Its Vdio On-Demand Service

redOrbit Staff & Wire Reports - Your Universe Online

Just six months after Rdio officially launched its video-streaming platform Vdio, the company has decided to pull the plug on the service, various media outlets reported on Friday.

In a statement posted online, Rdio confirmed that the Vdio beta service was being discontinued. It added that, despite the company's best efforts, “we were not able to deliver the differentiated customer experience we had hoped for. We want to thank all customers who have tried our service, and we have given gift cards to all those who have purchased content or have unused rental content.”

While Vdio was officially released to the general public in June, existing Rdio subscribers were granted early soft-launch access to the streaming video service back in April, said Jacob Kastrenakes of The Verge. However, despite its widespread availability, the company always viewed the platform as a beta product, he added.

It had been widely speculated for nearly two years that the ad-free music subscription service would be attempting to compete against the likes of Netflix and Amazon in the streaming video market, added TechCrunch’s Ryan Lawler. However, when Vdio actually launched over the summer, it was “less of a Netflix clone, and more of a competitor to traditional on-demand video rental services” such as Apple’s iTunes or the Google Play marketplace, he added.

“The quick shutdown suggests that the service didn't catch on much with consumers,” said Kastrenakes. “As Rdio points out, the service didn't particularly stand out – not only was it not very different, it was often actually limiting because of its reliance on streaming. Rdio also suggests there was a lack of profitability to Vdio, citing the absence of an attractive business model and an inability to please shareholders as additional explanations for the shutdown.”

Vdio has been closed effective immediately, but the company is promising to reimburse those who purchased content through the service in the form of Amazon gift cards. The termination of the platform follows the announcement that 35 Rdio employees would be laid off, according to Lawler.

According to CNET’s Jennifer Van Grove, Rdio Vice President of Product Malthe Sigurdsson had previously said Vdio was part of his firm’s overall strategy to become a “full-fledged entertainment service.” Given recent developments, Van Grove noted the strategy “now appears to have been overly ambitious.”

“If monetary issues were already showing themselves with Vdio, pulling the plug quickly was likely a necessary decision: even on the music subscription front, Rdio has been struggling,” Kastrenakes added. “Now it'll have to streamline its focus on music – an area where it's succeeded in gaining big fans, just not in big enough numbers.”