Cumulus Media Inc. is investing in digital media through a new deal with online music-streaming service Rdio that gives the radio giant what it calls a "significant equity stake" in Rdio's parent company, Pulser Media.
Rdio will also launch a free version of its service for the first time.
Financial details were not disclosed.
The partnership will give the San Fransisco-based Rdio (pronounced "ar-dee-oh") a big promotional boost as it tries to compete with larger competitor Spotify.
Cumulus, which owns about 520 radio stations, will promote the service on the air and allow access to its content through playlists and other offerings over a five-year period.
As part of the deal, Rdio will offer a free, ad-supported version of its service. Rdio, which helps users discover new music, listen on-demand and create playlists, had previously been available only through a subscription of $5 a month for access through the Web and $10 a month for use on mobile devices.
Cumulus' sales team will sell advertising for Rdio.
The Rdio model will now more closely resemble that of Spotify, which has long offered a free version that plays commercials between songs. Rdio and Spotify both say they have 20-million songs available to listeners. Spotify has 24-million monthly active users, while Rdio has never disclosed how many people it draws.
This is not Cumulus' first deal in the Internet music industry. Cumulus stations are already available through iHeartRadio, which is owned by the larger radio company Clear Channel.
Cumulus is also spending its money to grow in the more traditional radio space. Last month, Cumulus said it will acquire radio syndicator Dial Global, which just changed its name to WestwoodOne, for $260 million.
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