After years of resistance, it looks like Pandora is about ready to jump on the on-demand streaming wagon.
According to a report from the WSJ, Pandora is in the process of signing deals with record companies in order to launch a $10/month on-demand streaming tier, giving users unlimited access to any song on the platform. Pandora also plans to tweak it’s existing $5/month Pandora One tier (which is an ad-free version of its internet radio) to include more perks, like skipping more songs and offline listening, the report says.
Pandora was one of the first to bring radio to the internet, launching on the scene in 2000. But times have changed rapidly with the likes of Spotify and Apple Music, who dominate the space by offering on-demand streaming for around $10/month.
Though Pandora has failed to continue growing — the user base has stagnated around 80 million free users and 4 million paid users — the company has also kept costs relatively lower by not offering on-demand listening. Pandora shares dropped after poor performance last quarter, following the alleged rejection of an acquisition offer from Sirius XM owner Liberty Media for $15/share.
Since Pandora users can only listen to “stations,” as opposed to listening to Katy Perry’s new single on repeat, they only have to pay internet radio licensing fees (instead of inking deals with individual record labels). Plus, Pandora has only operated in markets where it gets automatic licensing as an internet radio company: the United States, Australia and New Zealand.
The WSJ also writes that Pandora is interested in launching in new markets. However, record labels are concerned that they won’t have control over which songs play on Pandora’s free tier.
The report claims that Pandora will launch this new on-demand tier as soon as next month.