Running a profitable streaming music business is hard. Just ask Sony, a company that, on paper, was perhaps best set up to run such a business. After all, Sony sells millions upon millions of pieces of hardware each year that’s capable of running a music streaming service, commands one of the largest music libraries in the world under the Sony Music/BMG label, and is a technology company. These three ingredients should have made Sony the leader in music streaming but after renaming Qriocty (which I thought was a fine name) to Music Unlimited (which I found atrocious), Sony would eventually secede from the streaming business and hand control over to Spotify.

Now Rdio has joined the latest casualty list and declared bankruptcy and with it, will cost Sony millions of dollars.

According to newly-revealed documents, Rdio was bleeding nearly $2 million a month. Besides the technology costs of running a streaming platform, Rdio is responsible for paying artists and labels while competing against Pandora, Spotify, and now Apple Music. Eventually, all this was too much for the long-time player and bankruptcy became inevitable.

That’s unfortunately going to cost Sony and others money. That’s because prior to going under, Rdio still owed quite a few companies money, including Sony Music, which will now miss out on $2.78 million. Others include

• Roku – $2.76 million
• Shazam – $1.17 million
• Warner Music Group – $613,374
• Universal Music Group – $294,219

Having one of the largest music catalogues in the world means that compared to other labels, Sony Music is also taking the largest hit. This certainly won’t have any long term negative effects on Sony Corp. or Sony Music but for a company that’s still trying to recover, it’s an unnecessary cash bleed that they likely didn’t see coming.

Discuss:

What music streaming platform do you use?

[Via Music Business Worldwide]