Less than a year after launch, Rdio is shutting down Vdio, its spin-off service that sold and rented streaming movies and TV shows. "Despite our efforts, we were not able to deliver the differentiated customer experience we had hoped for," Rdio says in a statement. The service launched in April to existing Rdio subscribers and opened up to the general public in June. Though it was available for everyone to use, Rdio always considered the service a "beta" product — though it's clear that Rdio had hopes set on carving out the same type of niche that it has with music.
Vdio didn't have an "attractive" business model
The quick shutdown suggests that the service didn't catch on much with consumers. 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. The service is being closed immediately, but those who did purchase content will be fully refunded in the form of Amazon gift cards.
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. It had a large round of layoffs just last month, reportedly letting go of up to one-third of its employees. 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. With competitor Spotify now trying to expand its own audience through additional free streaming services, Rdio will have plenty to contend with as it refocuses its resources back onto streaming music.