Pandora will expand beyond its Internet radio service as soon as next month, offering two new monthly subscription options that will take the company into on-demand music streaming, The Wall Street Journal reports, citing sources who are familiar with the situation. The new services could pose a challenge to existing companies in the space, such as Spotify and Apple’s iTunes.
“Pandora is close to reaching deals with major record companies that will allow it to do so both in the U.S. and in new overseas markets, though the agreements haven’t been finalized, these people said,” WSJ reports. “While the music industry broadly supports the new paid tiers, some record-label executives are still wary of granting Pandora permission to launch its free service in new foreign markets without the ability to control which songs they put on the free tier.”
The report adds: “Until now, the 16-year-old outfit hasn’t had to secure permission from record labels to use their music because it doesn’t let users listen to particular tunes on demand. It also had limited its service to the U.S., Australia and New Zealand — the few countries that make music licensing essentially automatic for internet-radio firms, as long as they pay rates mandated by federal judges or licensing collectives.”
The report notes that Pandora’s listenership has plateaued in recent years at about 80 million active monthly users. “Most listeners use Pandora’s free tier, with about 4 million subscribing to an ad-free version of its service, Pandora One, for $5 a month,” WSJ adds.