Pandora just bought a failing competitor for $75 million to help it fight Spotify and Apple Music

On Monday, Pandora announced that it would acquire key assets from embattled streaming competitor Rdio for $75 million in cash.

Rdio was once valued at $500 million.

Pandora CEO Brian McAndrews hinted that his company bought technology and intellectual property from Rdio so it could compete with the likes of Spotify in the area of on-demand streaming.

"Whether streaming through radio, on-demand or in-person at live events, Pandora is building the definitive source for fans to discover and celebrate music," Andrews said in an announcement.

On-demand has been a key piece of the puzzle Pandora has been missing, and which Rdio's technology could help bolster.

Pandora also revealed that Rdio was in dire financial straits. The $75 million purchase is contingent on "Rdio seeking protection in the United States Bankruptcy Court for the Northern District of California." Rdio had previously raised $125 million in total funding.

Rdio will shut down in all markets and Pandora "is not acquiring the operating business of Rdio." Pandora says many of Rdio's employees will be offered jobs at Pandora.

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