Rdio digital music service is acquiring a shuttered music streaming service company in India in a bid to get into the local market, which loves music but is not always willing to pay for it.
The San Francisco, California, company hopes to take advantage of Dhingana's catalog of over 1 million songs in 42 languages and in Indian genres, and extend the user base to cover India's large number of smartphone users.
Dhingana's founders Snehal Shinde and Swapnil Shinde will be joining Rdio's executive team to focus on its expansion in India as well as other emerging markets, Rdio said.
The financial details of the transaction were not disclosed.
Rdio India is scheduled to launch later this year, the company said Friday.
Dhingana shut down its operations in February reportedly after a large Indian music label refused to renew its contract with the company. Its website still stated early Friday that "alas, all good things must come to an end."
Besides facing strong local competition, Rdio in India will be up against rampant piracy in the country.
The International Federation of the Phonographic Industry (IFPI) estimated in a 2013 report that 54 percent of Internet users in India access unlicensed services on a monthly basis in the country. That offers a large potential market, if the users can be migrated to licensed services, the recording industry organization said.
The report described India as a "vibrant market" with more than 500 music labels releasing music in over 20 languages.
Launched in August 2010, Rdio was founded by Janus Friis, a co-founder of Skype. It expanded into 20 new countries in December, taking the total to 51. The company claimed in December that 57 percent of its monthly active users came from outside the U.S., up from 30 per cent at the start of the year. It offers both a paid and a limited advertisement-based service.