Rdio shutters Vdio service, as it should

Rdio is ending its brief foray into streaming video, shutting down Vdio after just eight months.

Unlike Rdio’s music service, which is subscription-based, Vdio offered movies and TV shows for rental and purchase. The service launched in April exclusively for Rdio subscribers, before opening up to everyone in June.

Compared to incumbents such as iTunes and Amazon, Vdio didn’t have much to offer. It was only available through Web browsers and on the iPad, leaving out phones and set-top boxes. The interface was a bit clunky and the video selection was similar to that of other a la carte video services.

Vdio’s big distinguishing feature was its built-in social network, which allowed users to share their favorite movies and shows and put together playlists for other users to watch. But even this feature was of dubious value in a service that not many people were using, and that made you pay for each movie and show. Given that Netflix added Facebook integration in March, Vdio’s social hooks were never really unique to begin with.

In a notice to users, Vdio acknowledged its lack of competitiveness. “We have concluded that we are not able to deliver a differentiated customer value proposition or a business model which is attractive to shareholders,” the notice said.

Anyone who did use Vdio will no longer have access to their movies, shows or playlists, but Vdio is offering full refunds in the form of Amazon gift cards.

Vdio might have made more sense as a subscription-based service similar to Netflix, and as GigaOM reports, that’s what Rdio had originally intended. But for whatever reason, it didn’t work out, and with such fierce competition between Netflix and Amazon Prime Instant Video, there’s no guarantee another subscription-based service would have survived.

Rdio itself is now cutting costs as it tries stay competitive with Spotify, so the timing of Vdio’s demise makes sense. It’s also not a bad thing if it helps Rdio focus on its streaming music service, which is still quite good.