Rdio has pulled the plug on its video streaming service Vdio barely a year after its launch. The latter was aiming to compete with other video-on-demand sites such as Netflix and Amazon, but the competition must have been too much for the young startup.

Those who have paid for content on Vdio will receive Amazon credits as a refund as they will no longer be able to access the media they want, but why the early demise? One reason could be because Vdio might have entered the game too late and it was far from being a game changer when it rolled out its services in April. While it sported a nice design, its content was not at par with what the leaders of the pack can offer consumers, plus most of the content can be found in other similar websites.

"We have decided to discontinue the Vdio beta service. Despite our efforts, we were not able to deliver the differential customer experience we had hoped for. We want to thank all customers who have tried our service, " Vdio posted on its website.

"As of Dec 27, 2013, we have stopped accepting new Vdio transactions. Customers who purchased videos or or have unused rentals will be offered Amazon gift cards in an amount equal to the total cost of their transactions on Vdio. Vdio VIP promotional credits are not eligible," it added on the FAQ section with regard to its shutdown. "Unfortunately, all Vdio-specific account information will no longer be available."

Vdio, which was hiding under the name Project WBS until 2011, was founded and backed up by Janus Friis, who founded Skype and KaZaA. The service allowed users to rent or buy content such as TV shows and movies and even create playlists of their favorite contents. The service went full blast in June this year for consumers in the US and in the UK.

The employee layoffs initiated by Rdio in November might have hinted of things to come but for some, things could have been an unseen fatal blow after Rdio hired former Apple and Amazon executive Anthony Bay as its chief executive in the hopes of boosting its market performance. GigaOm's Janko Roettger's offers a short and blunt summary of what happened to the media streaming endeavour.

"Bold visionary endeavours like a global entertainment platform are very expensive, even for a billionaire like Friis - and in the end, he may have decided that it simply wasn't worth it," Roettger wrote.