Pandora Set to Introduce Two New On-Demand Paid Subscription Tiers

Streaming radio service Pandora is getting ready to introduce two new on-demand paid subscription tiers, in addition to keeping its popular free option available, according to people familiar with the matter speaking with The Wall Street Journal.

The company is said to be "close to inking deals" with some major record companies that will let it expand the two new tiers in both the United States and some markets overseas.

The most expensive subscription is said to be $10 per month and grant users unlimited access to tens of millions of songs on Pandora, bringing the internet radio streaming service closer to that of Spotify and Apple Music. The company will then slightly tweak its existing $5 per month ad-free option with a few new perks like skipping songs, offline listening, and more.

While competing with the likes of Spotify, Apple and other $10-a-month service providers may be difficult, some music-industry executives believe that Pandora’s planned $5-a-month tier presents a bigger opportunity for the business, potentially unlocking new revenue from consumers who want a bit more control over their listening experience but wouldn’t pay $10 a month.

First launched in 2000, Pandora has never had to get individual permission from record labels to play their music since its services offer only randomized, radio-like "stations" that prevent users from playing specific songs. Since its new model will add these on-demand listening features for its users, Pandora now has to partner with various record labels in addition to the broad internet radio licensing fees it pays.

The company hopes its new business model attracts subscribers, since it's seen a "listenership plateau" over the past few years with 80 million active monthly users, about 4 million of which are paying $5 per month to avoid ads between songs. Currently, the radio features of Pandora are available in the United States, Australia and New Zealand, but the potential new markets overseas it will expand to have not yet been disclosed.

Also left unspecified was a release date for the new on-demand streaming tiers beyond sometime in the fall. For those who don't have it, you can download the Pandora app for free from the iOS App Store. [Direct Link]