Pandora's new on-demand music streaming subscription service is gearing up to debut shortly, as the company has just announced new deals in place with two of the three major music labels.
Sony Music Group and Universal Music Group (UMG) have signed on for the new service, along with the Merlin Network and 30 additional independent music labels and distributors.
"This was a truly collaborative attempt to find a solution that would support artists while profitably growing our respective businesses," said Tim Westergren, Pandora's founder and CEO. "And that is exactly what we achieved. Working together, we can reshape the digital music market and grow a great business that provides tremendous value to the music industry for decades to come."
Several big questions remain, however, regarding the new on-demand service; one of which is the pricing, which has not yet been announced. Although the on-demand model is expected to be very similar to those of rivals Apple Music and Spotify, Pandora may attempt to slightly undercut those streamers' $9.99 per month pricing structures as a way of differentiating itself from the competition.
Another mystery is the absence of Warner Music Group (WMG) from the announced list of partners. The third of the big three music labels, Warner is home to popular acts such as Bruno Mars, Coldplay and Ed Sheeran.
All of Pandora's streaming rivals — Spotify, Apple Music, Tidal and SoundCloud Go — have inked deals with the label. The lack of music from WMG's artist roster could prove to be a sore spot for Pandora if a deal is not put in place prior to the new on-demand streaming service's debut.
Pandora currently operates as a radio-based streaming service, which means that listeners are treated to songs via various genre- and artist-oriented "stations," but cannot choose specific tracks to listen to by demand.
Until now, the company was not required to have any formal agreements with record labels or artists whose music it played as long as it paid the statutorily required license fees for each individual spin, in the same way traditional AM and FM terrestrial radio stations play whatever music they choose.
This gave Pandora a competitive advantage in that even new music that was not yet released to on-demand streamers by artists like Adele and Taylor Swift, or releases with temporary exclusive streaming deals with Tidal or Apple Music such as those by Beyoncé, Kanye West, Frank Ocean and the like, could still be heard on Pandora, just not on demand.
Pandora also plans to enhance its $5 per month Pandora One ad free option to allow users more control over their listening by giving them more options to skip tracks and download playlists. With only 4 million of Pandora's 78 million listeners now subscribing to Pandora One, there appears to be a lot of room for growth with Pandora's new subscription offerings.
