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In Light of Rising Royalties, Pandora Increases Subscription Prices

TMCnet Feature

March 20, 2014

In Light of Rising Royalties, Pandora Increases Subscription Prices

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By David Gutbezahl
TMCnet Contributing Writer

With over 250 million listeners, it’s safe to say that the music streaming service, Pandora (News - Alert), is one of the most popular music services out there right now. Most of these 250 million users play Pandora on their smartphones, tablets, and computers for free, opting to have a limited ability to skip songs and having the occasional advertising interruption. However, Pandora does offer a paid service, Pandora One, that provides users with no advertisements and unlimited non-advertised music listening. With 3.3 million users paying for Pandora One, the service can’t be considered a bust, even if it is such a small proportion of their user base.


That small proportion may shrink soon, though, as Pandora has announced that they will be raising the prices of their Pandora One service from $3.99 to $4.99 per month. Pandora is also planning on cancelling its yearly subscription service, forcing those who have been using it to switch over to the monthly payment scheme.

The number of paid users might not shrink that fast however. Current subscribed users will be able to keep the $3.99 price tag (News - Alert), for now. Numbers may even grow, as anyone that manages to sign up before the end of the month will be able to get the $3.99 deal, whereas any other new users will be stuck with the $4.99 per month plan. Yearly subscribers will be getting the worst part of the deal, while they will be able to switch to the $3.99 per month plan rather than the $4.99 plan, the price difference between the monthly and yearly plan will end up costing them more.

The $3.99 deal for older customers is also not necessarily going to stick around for long, and it would not be surprising if eventually everyone will find themselves paying $4.99 per month.

This is the first price hike for Pandora One since it was released in 2009. According to Pandora, the price of royalty fees have been increasing exorbitantly over the last 5 years, causing the cost of running their service to also increase drastically.

Pandora has a history of issues with the royalties and recording artists. In 2013, the Recording Industry Association of America (RIAA) accused Pandora of not paying enough in royalty fees, and even went so far as to state that the company was intentionally not producing ads to reduce profit in order to avoid paying fair royalties. Pandora’s co-founder, Tim Westergreen, rebuked the RIAA, in a statement, expressing that Pandora pays more than enough, especially considering that traditional radio stations do not even necessarily pay to play songs at all. 




Edited by Stefania Viscusi

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