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Rdio Tunes In Pics With Peek at ‘Vdio’

Internet music startup bows preview of EST service stocked with TV, film titles

Music streamer Rdio opened the doors wider on its Internet video service, Vdio, betting social secret sauce will make it stand out in the crowded electronic sell-through lunchroom.

Whereas Rdio offers unlimited streaming for a flat price, startup opted to take transactional approach with video instead of copying Netflix’s all-you-can-binge buffet.

Rdio touts thousands of selections for vid service, through deals with studios and programmers including Disney, MGM, Paramount Pictures and Viacom, Sony, 20th Century Fox, DreamWorks, Warner Bros., CBS, Lionsgate (only in the U.S. initially), NBCUniversal and Starz.

After closed beta period that kicked off last fall, Vdio became available Wednesday to Rdio’s premium subs.

“The overarching theme is to build the world’s best streaming entertainment platform,” said Rdio topper Drew Larner, who oversees the video service as CEO.

Rdio is in talks with HBO to add streaming titles of premium cabler’s originals, according to Larner, although it would not be current-season material (windows would match DVD release).

Pics available on service include recent releases “Skyfall,” “Life of Pi,” “Zero Dark Thirty,” “Lincoln” and “The Hobbit: An Unexpected Journey.” TV shows — with most new segs to be available day-after air — include “The Big Bang Theory,” “The Walking Dead,” “Breaking Bad,” “Justified,” “Downton Abbey” and “Homeland.”

Full launch of Rdio slated for later in 2013, Larner said, declining to be more specific. Initially available only in U.S. and U.K., Vdio is targeting Canada as next launch territory.

Company chose transactional model because “we made the decision from the foundational standpoint to put our best foot forward with the newest and best content,” Larner said, noting unlimited-streaming rights to freshest content is unavailable from studios.

But Vdio’s decision to compete with paid-download services like Apple’s iTunes, Amazon On Demand and Walmart’s Vudu rather than go after the successful unlimited-streaming model — exemplified by Netflix — “assures that it won’t become a major player,” Forrester Research analyst James McQuivey said.

That’s not because the company can’t build a good service, he added, “but because consumers have already voted on that model—they don’t like it nearly as much as the all-you-can-eat model that makes watching easy.”

Vdio (pronounced “VEE-dee-oh”) aims to cut through clutter with what Larner boasts is an elegant design and social features. The site includes a feature dubbed “Sets,” to let users compile playlists for TV shows and movies that can be shared with friends.

“Our differentiator is social,” Larner said. “When you’re faced with these huge content libraries, the challenge of what to listen to next or watch next is pretty serious.”

Spotify, Rdio’s primary music rival, has been rumored to be mulling its own vid service though company insiders disavow any immediate action on this front.

Vdio currently works on the web and Apple’s iPad tablet, with other devices and platforms in the works.

Service is designed to complement Rdio’s flagship music service. Launched in August 2010, Rdio offers unlimited access to some 18 million songs to users in 24 countries.

With current offer, Rdio Unlimited subs will receive a $25 credit to use on video purchases or rentals, which will be the same offer for those who subscribe to music plan in the next 60 days. Vdio carries EST market pricing, with TV segs $2.99 each, film rentals $3.99-$4.99 and film purchases $14.99-$19.99. Full seasons of TV shows can be purchased at a discount.

San Francisco-based Rdio was founded by Janus Friis, one of the creators of Skype (now owned by Microsoft) along with fellow Scandinavian Niklas Zennström. The duo also were behind Joost, an Internet TV venture that folded in 2009, and Kazaa, a peer-to-peer file-sharing startup that ended up paying the music industry $100 million to settle copyright-infringement claims.

Rdio’s Larner spent 20 years in the entertainment biz, including stints at Spyglass Entertainment Group, Morgan Creek Productions and 20th Century Fox. Most recently he was managing Director at Europlay Capital Advisors, an L.A.-based merchant bank and advisory firm. Larner began career as an attorney in the Century City office of law firm O’Melveny & Myers.

The Vdio management team includes prexy Ian Aaron, formerly CEO of mobile services provider Twistbox and president of TV Guide Television Group. Aaron also founded ConnecTV, the social TV startup backed by television broadcast groups representing more than 200 stations.

Rdio is backed by Friis’s Atomico investment firm, Skype and Mangrove Capital Partners; privately held firm has not disclosed funding. Startup has 115 employees, mostly in San Fran.

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