It all seems to be happening in the world of online music services; in January I blogged about the linkup between music stream service Spotify and mobile music discovery service Shazam and last week I learned about on-demand social music service Rdio opening its API to developers and starting an affiliate program.

Rdio is the brainchild of Skype founders Janus Friis and Niklas Zennstrom. The service allows its users to build and share online music collections from a catalogue of over 8 million songs. Rdio offers a web-only, paid for music streaming service and a premium version that adds mobile access.

Rdio has now created an API that gives developers the ability to create web apps that can search, access and play all of the artists, songs, albums, playlists, and charts in Rdio’s music catalogue.  The API will allow developers to access community-only features such as the ability to see what’s in heavy rotation in your network, follow people whose music tastes you like, check out other people’s music collections and modify a personal collection or playlist.

I guess the main difference with other APIs is that the Rdio API is tied into a subscription service and therefore only fully accessible to Rdio subscribers and trial users. Users who are not subscribers or trial users and who encounter the Rdio API on third-party sites will be able to hear 30-second song excerpts. These users will also be given the option of enlisting in a free 7-day trial (no credit card required) to hear the full song.

Rdio also launched a new affiliate program which enables developers to monetise their applications. It will pay commissions for referring new subscribers and song downloads. Affiliates can earn two to three percent gross revenue per month for the lifetime of a new subscriber and seven percent gross revenue per song download referred.

From a business and strategic point of view, I learned the following about Rdio’s API release and new affiliate program:

1. Engaging with third party developers early and often is a good way to spread the word and usage of Rdio’s services.
2. Opening up an API helps to create an ecosystem centered around Rdio and its core functionality.
3. Similarly, the affiliate program – like the one Rdio launched – tends to be a good way to extend the reach and audience of a product (and create an extra revenue stream in the process).

Main learning point: Rdio managed to get into the US market before its biggest competitor Spotify. From that perspective, it makes a lot of sense for Rdio to open up an API and launch an affiliate program, not only to generate more interest for its services but also to get the developer community on board to come up with interesting and commercially viable applications. It will be interesting to see what kinds of applications will come out of this affiliate programme and whether Rdio can offer some serious competition to Spotify.

Related links for further learning:

http://blog.rdio.com/post/3786039074/now-available-the-rdio-api

http://techcrunch.com/2011/03/11/social-music-startup-rdio-pushes-play-button-for-api-affiliate-program/

http://mashable.com/2011/03/11/rdio-api/