Cumulus Media Inks Deal With Rdio

UPDATE 10AM: It's Official! Cumulus Media Inc.and Rdio have announced a powerful content, promotion and advertising partnership that provides listeners with a one-stop solution for their audio needs while offering advertisers new opportunities to engage with consumers.

Doubts of Cumulus Media seriously challenging Clear Channel should end Monday.

According to the NYTimes, Cumulus Media, which operates 525 radio stations, has announced a deal with Rdio, a subscription music service from the founders of Skype, that will give Cumulus an online outlet and help Rdio compete against more established players like Spotify.

In exchange for what it calls a significant equity stake in Rdio’s parent company, Pulser Media, Cumulus will give Rdio broad access to its programming and promote Rdio on its stations.

“This is our digital play,” Lewis W. Dickey Jr., the chief executive of Cumulus, said in a joint interview on Friday with Rdio’s chief, Drew Larner.

Crucially for Rdio, which was introduced in 2010 and has struggled to gain a foothold in the market, Cumulus will also sell advertising for a free version of the service in the United States. Rdio, which costs $5 to $10 a month and is available in 31 markets around the world, lets its subscribers listen to millions of songs, build playlists and interact with other users.

The deal between Rdio and Cumulus is a trade, with no cash changing hands. The value of Cumulus’s content and services is estimated at more than $100 million.

Cumulus will draw on its stations and syndicated shows to create playlists and other programs for Rdio users, stripping out localized details like traffic and weather.

That kind of content could give Rdio an edge against other services. But even more important is its ability to offer a free, ad-supported version to compete directly against Spotify. Cumulus will use its 1,500 sales agents around the country to sell commercials for Rdio’s free version, which is expected by the end of the year, and the companies will share ad revenue.

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