Pandora reportedly close to on-demand launch

Pandora cube canvas 160wPandora executives have publicly committed to an end-of-year timeline for launching the company’s upcoming on-demand music service, which will compete directly with Spotify. But a report in this morning’s Wall Street Journal says that the launch could be as soon as next month, citing unnamed sources.

Such reports constitute rumor, of course, and the difference of a few months doesn’t have much consequence in the larger scheme. Pandora acquired technical and staffing assets of Rdio, when that respected-but-failed service entered bankruptcy last November. In its quarterly earnings calles, Pandora has made three main points:

  • It will definitely build an on-demand service;
  • The on-demand service will probably launch by end-of-year, with hoped-for financial gains occurring in 2017;
  • Exact timing depends partly on product development and partly on music licensing negotiations.

Pandora’s existing non-interactive internet radio service uses blanket music licensing, with rates set by the U.S. Copyright Royalty Board. that system doesn’t apply to interactive service in which users play specific tracks on demand — in that model, royalties are set through negotiation with music label groups and publisher/songwriter agencies. The WSJ said that Pandora is “close to inking deals with major record companies,” both for music use in the U.S. and in other countries.

Perhaps more interesting than launch timing, the Wall Street Journal has been told by anonymous sources that Pandora’s $5/month commercial-free listening plan, called Pandora One and used by a small fraction of monthly listeners, could be enhanced with a bit of interactivity. “It also is planning to augment its existing $5 ad-free tier with perks such as the ability to skip more songs and listen to music offline, said the people familiar with the matter,” the WSJ reported.

We can only speculate about this interesting twist, which sounds like a sort of “paid freemium” — in other words, some degree of semi-interactivity similar to Spotify’s freemium tier, but with some subscription money thrown against it which would placate label partners who dislike Spotify’s pure freemium. Some industry observers think that music subscription services should test lower price points than the full-service $10/month which delivers a full, cloud-based music collection experience. It could be that Pandora plans to drive a stake into that middle ground.


Brad Hill

One Comment

  1. pandora also creating an ad network with other publishers

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