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In The Mobile Music Landgrab, Rdio Signs On With Verizon

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As big guns like Apple (NSDQ: AAPL) and Google (NSDQ: GOOG) reportedly gear up to launch their own music streaming services, the smaller startups are also ramping up their efforts to become more useful, and discoverable: today Spotify announced a downloads service a la iTunes, but it’s not the only one making a move. Rdio, the music-streaming service started by Skype, Kazaa and Joost founders Niklas Zennstrom and Janus Friis, is also forging ahead with new services to grow its footprint and revenues. The latest, announced today, is a deal with Verizon Wireless (NYSE: VZ) to stock the app in its V Cast store for Android users; this will also let users bill their Rdio subscription direct to their Verizon accounts.

Rdio says that deal will make it one of the first music apps in Verizon’s app store, and one of the first to use Verizon’s carrier billing backend for the subscription. The service — which gives users access to their music from the cloud, with the ability to listened to cached music when offline, as well as playlists and other social features — will be available for now on all Android devices as well as the Samsung Galaxy Tab tablet. No word now on whether Verizon will extend that to other platforms such as iOS.

Rdio and Verizon are not giving a breakdown of how much revenue Verizon will take from these subscriptions. One possible marker for how much Rdio is willing to share: In February, Rdio’s CEO, Drew Larner, complained to that Apple’s in-app payment revenue share, in which Apple takes 30 percent, makes it “untenable” for companies like Rdio to exist on that platform.

The Verizon news comes amid a string of news from Rdio. Last week Rdio announced that people can start paying for their Rdio subscriptions using Amazon (NSDQ: AMZN) Payments, as an alternative to regular credit card payments.

And earlier this week it announced a partnership with EchoNest, a “music intelligence platform” that lets developers integrate different music data and services into apps they are writing. This partnership will integrate Rdio’s eight-million track catalog into that platform, and will give developers the ability to embed the Rdio player into other apps.

The company is also expected to announce in coming days further expansions of its API strategy.

Marisol Segal, Rdio’s executive director of content and marketing, tells mocoNews that the Verizon deal is not exclusive and there is a chance that there will be more deals with other carriers in the future. “We’ll continue to add platforms as we see demand for them,” she said.

Rdio silence on numbers. All is moving ahead, then, except it’s still hard to see how well Rdio has done as a business up to now. The startup is still cagey on how many users it has picked up since launching in August last year — we heard an unconfirmed rumor of only 50,000 in February, which is tiny if you compare it to Spotify’s recent claim of one million subscribers — and it is still mum on when it plans to launch internationally (for now, it’s only in North America).

There is also that pesky problem of all the other cloud music competitors. Segal, at this point, sees that more as an advantage than a challenge, however.

“I think there is still a lot of education that needs to be done in relation to music and accessing content on subscription rather than purchasing downloads,” she said. “So I think competition is valuable.” Investors will have a limit to their patience on that of course — witness the recent sale of Thumbplay to Clear Channel, reportedly for a bargain price after the cloud-based music streaming service picked up only 20,000 users for its product. Like Rdio’s premium tier option, Thumbplay’s service cost $9.99 per month.

No information on how much usage the service is getting on mobile versus other platforms — in addition to iOS, Android and Blackberry, Rdio can also be streamed via the internet as well as connected music devices in the home through deals with Sonos and Roku.

Rdio says that today around 80 percent of all users take the company’s higher tier offering priced at $9.99. “And that number is going up and up,” says Segal. That service lets people access Rdio on the Internet, via mobile and through connected home products. She notes that mobile devices “are definitely at the top of the pack” when it comes to consumption.

“We’ve been seeing [takeup of] the unlimited tier going up and up, and that was before we launched on Sonos or Roku,” she said. “We think that mobile and the ability to cache on mobile devices is a big part of the proposition for people.”