Internet radio leader Pandora Media Inc on Thursday unveiled plans to challenge streaming stalwarts such as Spotify Ltd by undercutting them on price and matching them with on-demand music.
The move comes after prolonged market jitters over the future of Pandora at a time that on-demand streaming is reshaping the music industry.
Pandora said that its premium service would cost US$4.99 per month — half its earlier cost and half the subscription prices for Spotify and Apple Inc’s Apple Music.
The company said that the new Pandora Plus is to include more advanced features to be rolled out in the coming months.
Among them is an automatic switch to offline radio stations whenever a subscriber loses an Internet connection — avoiding the sudden blackouts that remain an annoyance on streaming services.
Pandora said it would launch an on-demand subscription platform later this year.
The service, whose pricing was not immediately revealed, would follow the model of Spotify in letting users select any song at any time.
Pandora, whose users overwhelmingly choose its advertising-backed tier, said it would make the level more interactive.
Listeners are to be able skip or repeat songs if they click on a video commercial — a feature likely to delight advertisers who are crucial to the company’s bottom line.
Tim Westergren, the company’s cofounder who returned earlier this year as CEO, said Pandora wanted to give users “flexibility” in what they listen to and how much they pay.
“Whether a listener wants to take advantage of our enhanced ad-supported experience, our groundbreaking subscription radio service or our fully interactive on-demand option coming later this year, we have a solution tailored for you at a price point you can afford,” he said in a statement.
Pandora, launched in 2000, designed itself as a radio network with stations based on genre and, more recently, automatically personalized around listeners’ selections.
It had 78 million active users at the end of June — an impressive number, but a slight decline from a year earlier.
Spotify by contrast has posted breakneck growth.
The Swedish company on Wednesday said that the number of paying subscribers soared by one-third in just the past half-year to 40 million, out of total users of 100 million when including its free tier.
Spotify’s audience tends to be younger, while Pandora’s strengths include casual listeners and restaurants and businesses looking to create a musical mood.
Global revenue from streaming rose more than 45 percent last year, according to the International Federation of the Phonographic Industry, leading the music industry to post its first significant growth since the start of the Internet age.
Apple Music, as well as Tidal, led by rap mogul Jay Z, has sought a bigger slice of the market by promoting exclusives — such as, for Tidal, the latest album by Jay Z’s wife, Beyonce.
Apple Music, launched by the tech giant last year, recently said it had 17 million paying subscribers — posting steady growth, but significantly trailing Spotify.
As for Tidal, the Dagens Naeringsliv newspaper in Norway, where the service’s parent Aspiro Group is based, this week reported that the company has suffered heavy losses and received about 100 payment default notices.
Unlike the major on-demand services, California-based Pandora has a limited global reach due to complex government regulations.
Outside of the US, Pandora is only available in Australia and New Zealand, where the new features are to come out next year.
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