• by Erik Sass  @eriksass1, October 4, 2013

The digital radio scene is heating up with new competitors, products and business models. The latest development comes from Rdio, which has made its personalized streaming audio stations available for free to all listeners with iOS or Android mobile devices.

Under the new terms of service, users can listen to all of Rdio’s various artists, songs and genre-based stations, as well as its personalized You FM and Friend FM stations — all powered by recommendations from EchoNest — without a paid subscription through the Rdio mobile app.

Rdio also recently upgraded its service, which draws on a library of over 20 million songs, with new features including station sharing and stations based on playlists and albums.

Previously, Rdio’s digital radio service was only available to customers who paid a monthly $9.99 subscription fee for its premium on-demand music service. At launch the mobile radio service doesn’t carry advertising, but Rdio could easily switch to an advertising-supported model through it partnership with Cumulus, which recently took a stake in Rdio’s owner Pulser Media, giving Rdio access to the broadcast group’s advertising sales staff.

More than half (53%) of online Americans are listening to Internet radio, according to data recently released by Edison Research, and digital audio platforms are racing to serve this growing demand.

In September, Apple unveiled iTunes Radio with Macy’s as the exclusive launch sponsor and a number of other major advertisers lined up for later, including McDonald’s, Nissan, Procter & Gamble, and Pepsi. Also that month, Katz Media Group, the nation’s largest radio sales representative, relaunched its interactive division, formerly known as Katz 360, as PROXi Digital. Under its new name PROXi will offer an expanded range of online, mobile and audience targeting products, including a new Secondary Action Unit, which allows advertisers to employ native advertising with custom content in their digital radio campaigns.

Another digital radio contender, Spotify, is aggressively promoting its own free, ad-supported audio service.  Pandora recently named Brian McAndrews, formerly of aQuantive, as its new CEO, suggesting an increased focus on advertising .