The deals come ahead of, and are necessary for, its launch of a new streaming service built from the remains of the defunct Rdio.
Pandora struck an agreement with several big labels Tuesday, including Universal Music Group, Sony Music and the Merlin Network. But according to a New York Times report, Amazon and Pandora will reportedly challenge that standard when they each introduce their own $5 streaming services in the coming weeks. Pandora is also believed to be working on a “full-fledged on-demand [music] platform”, to be available this year at $10 a month.
One key point: the deals announced today cover the U.S. only, so Pandora will need expanded global agreements before it can launch its new offerings elsewhere in the world.
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Even with more options and lower rates, however, market experts are still doubtful that those who are satisfied with content they get from radio and free platforms like YouTube will be convinced to pay for music streaming. The new music services from Amazon and Pandora will thus face fierce competition though they are expected to be well-equipped to handle it. Pricing has been one of the factors affecting monthly subscriptions and that is one of the target loopholes for the new players. ‘And that is exactly what we achieved.
“This partnership should be a very encouraging sign for the entire industry”. Today, more than 78 million users listen over 24 hours per month to Pandora’s ad-supported and subscription offerings – more than twice the engagement of all other streaming services. Though quite the opposite for those responsible for the actual music: record labels and artists. “Pandora is a company founded and run by a musician”.
It was the second quarter over the past nine months in which Pandora’s active listener base declined year-on-year, and was three million people behind its monthly peak of 81.5m in Q4 2014. He added that Pandora intends to launch “multiple tiers, not just $10 a month, but something lower as well”.