Rdio

Rdio was widely considered to have a better user interface and social features than Spotify, but it couldn't compete with Spotify's aggressive expansion, exclusive deals, and $2.6B in funding. Rdio also faced Apple Music's 2015 launch, which came pre-installed on every iPhone. With $125M in funding vs. Spotify's billions, Rdio couldn't match marketing spend or secure the licensing deals needed to compete. The company filed for bankruptcy and its assets were acquired by Pandora for $75M. The lesson: in winner-take-most markets, product quality alone isn't enough—distribution and capital advantages compound over time.