Rdio is killing its streaming video service Vdio, abandoning plans to combine the two in a joint subscription media offering and raising the question whether any newcomer at this point can compete with Netflix (S NFLX), Hulu and Amazon (S AMZN) Prime Instant.

Rdio announced the decision on its website Friday, writing:

“Despite our efforts, we were not able to deliver the differentiated customer experience we had hoped for. We want to thank all customers who have tried our service, and we have given gift cards to all those who have purchased content or have unused rental content.”

The announcement marks the unexpected shuttering of a premium video offering backed by Skype co-founder Janus Friis that at one point intended to heads-on compete with Netflix.

Vdio’s stealthy and rocky beginnings

Vdio was founded in December of 2009 under the stealth startup name Project WBS, and remained in stealth mode…