(Hypebot) – Its no secret that ad-supported music streaming is currently a money losing business. But court papers filed in the bankruptcy court today show just how tough a business it is and how quickly a freemium music streaming service can burn through cash.
Just hours after Pandora announced that is was acquiring select assets of Rdio for $75 million, the on demand music streamer filed for Chapter 11 protection in the U.S. Bankruptcy Court of San Francisco. In the filing, Rdio showed more than $190 million in secured debt and $30 million of unsecured debt.
Even after revenue from ads and $9.99 per month streaming fees, Rdio was burning through around $2 million each month, according to the Hollywood Reporter and "no longer has the economic means of funding such significant operating cash flow shortfall."
Rdio's biggest creditor is its principle financier and majority owner Pulser Media. Additionally, these companies are all listed as major creditors:
•Roku – 2.7 million claim
•Sony Music -2.4 million
•Online ticket platform AXS Digital -$1.25 million
•Shazam – nearly $1.2 million
•Warner Music Group – $613,000