Pandora has detailed some upcoming changes in terms of One subscription pricing. In a bit of news that few like to hear, it seems the rates will soon be going up for new subscribers. Pandora has also said they will be allowing current (active) subscribers to remain at the same rate, and that they will be ending the annual subscription option.
In simple form — Pandora One is currently set at $3.99 per month. That price will increase by $1.00, and go to $4.99 beginning in May. Again, this is for new subscribers only. As for the annual subscribers, they will (provided they remain active) be migrated to a “discounted loyalty price” of $3.99 per month.
That new loyalty pricing will take effect at the next renewal period. Further details here mention how annual subscribers who are coming up on their renewal date will be notified by email. Otherwise, along with news of the price increase, Pandora did also touch on how they are doing this “so that loyal listeners can continue to enjoy a premium, ad-free Pandora experience.”
There was also mention about how they have been “fortunate” to keep Pandora One subscription pricing at $36 per year — since it originally arrived back in 2009. That $3.99 per month price has also remained the same since it was introduced. The reason behind the price increase seems to have come down to royalty fees.
It was said the royalty rates Pandora pays (via SoundExchange) have increased 53 percent in the last five years. That fee is also expected to increase another 9 percent in 2015. All that having been said, Pandora closed with how the listeners remain their top priority and this price change will affect roughly 3.3 million subscribers (out of more than 250 million registered users).
SOURCE: Pandora
Why pay for Pandora when, for a few bucks more, you can subscribe to Beats, Spotify, or All Access and listen to anything you want whenever you want?
That’s really an apples to oranges comparison. It’s similar (although not exactly the same) to saying “why buy/rent movies when you can watch movies on Netflix?”
On demand services like All Access or Spotify are targeting users who want control over the individual tracks that are played. They want the music power-users. They often have a radio component, but it’s not the focus and usually work by correlating listening habits with other users.
Pandora (and other internet radio services), on the other hand, focus exclusively on the passive listening experience. Their users just want to listen to music they like; they don’t care which tracks are played. The simplicity of the service is a huge feature.
On top of that, Pandora has a HUGE advantage when it comes to playlist generation because of its Music Genome project. Almost every track in its library has been individually listened to by trained musicians and decomposed based on a large matrix of attributes (tempo, tonality, instrumentation, etc. but much more granular). It takes them about 20 minutes per track to assign values for the several hundred criteria. This means their algorithms can serve up music that is truly similar to a track you selected, not just something that is popular with other users that listened it.
The downside (or upside depending on how you look at it) is that Pandora’s library is much smaller than the other services, meaning they have to be more selective of what music is on their service. They do a good job of keeping up with the music their users want, though, so it’s not usually an issue so long as there’s enough variety to keep things from getting stale.
Full disclosure: I work at Pandora (as an engineer, not PR), and use Play Music All Access for most of my personal listening. Opinions here are my own and not my employers yada yada…