Pandora upping monthly ‘One’ fee, dropping annual subscriptions

By , Mar 20, 2014

pandora

Pandora announced this week that it is going to making some significant changes to its Pandora One subscription service over the next couple of months. Most notably, it’s going to be raising the monthly subscription cost and eliminating the annual option.

Citing rising licensing costs, Pandora says that it’s raising its ‘One’ fee from $3.99 per month to $4.99 per month, and taking away the discounted annual plan altogether. The company says that royalty rates it pays to artists have increased 53% since it began…

From the announcement on Pandora’s blog:

In order to continue to provide an ad-free listening option, we are implementing some changes to the way we price Pandora One, including a modest price increase for new Pandora One subscriptions:

- Existing Pandora One monthly subscribers that remain active will not experience a price increase at this time and will continue to pay $3.99 per month.
- For new subscribers, the subscription price will change to $4.99 per month starting in May.
- Existing annual subscribers that remain active will migrate to a discounted loyalty price of $3.99 per month at their next renewal period.
- We are ending the annual subscription option.

The move is a bold one, but not surprising. Pandora has long complained of rising licensing fee costs—last year 48% of its revenue went to artists. The company continues to make nearly 4x as much from ads on its free service as it does from One subscribers.

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Beginning this week, annual subscribers approaching their renewal date will be notified of the changes, but monthly pricing for new subscribers won’t take effect until May. This will give new folks a chance to get in on the cheaper pricing before it disappears.

But even with the price hike, Pandora One is still half the price of its competitors. Both Spotify and Beats Music cost $9.99 a month, and Rdio ranges from $4.99 to $14.99 depending on the device. Apple’s iTunes Radio does not currently offer on-demand music.

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  • Leonard Wong

    Certainly not a deal-breaker by a dollar difference. At that price, it is still quite cheap.

    • ✪ aidan harris ✪

      The main deal-breaker with music streaming services is international support and so far only Spotify and Rdio accomplishes this. You’d think by now Pandora would have the necessary licenses to look beyond the US (and Australia and New Zealand)…

      • Ariel

        Canada too

  • XboxOne

    Hello Pandora Skip & No Ads tweak ;)

    • Marcus

      I use Pandora way more on my computer than on my iPhone.

      • Chris

        If you are on a Mac, use Glimmer Blocker (Free) with iTunes Radio for unlimited skips and no ads ;)

      • Marcus

        Lol thanks but I already have iTunes Match so I get no ads anyways :D It would be nice to have unlimited skips though.

      • Chris

        Yeah, if it wasn’t for Glimmer Blocker, I would have Match… But I use Spotify Premium on my mobile devices, so no need to match my non-iTunes music.

      • Liski

        Which filter do you use?

      • Marcus

        What are you talking about?

      • Liski

        I was replying to Chris hoping to get some info on what filter he uses on Glimmer to get unlimited skips on iTunes Radio. I just installed it and trying to figure it out.

        OT: Do you experience Safari loading much slower with Glimmer installed?

      • Marcus

        Well you replied to me. I guess you clicked the wrong thing. Anyways no clue what you are talking about lol. Hope he answers soon.

  • Tom

    Rdio is the best :)

  • oralarts

    Spotify is the gold standard of steaming services. So, so much better than Pandora.

    • J. Rockwell

      Absolutely, and now Spotify seems like an even better deal. Hopefully they don’t raise their rates too.

    • Byron C Mayes

      Kinda comparing Bananas and Oranges. Spotify’s main head-to-head competitors are Rdio, Google Play, and now Beats.

      Rdios the best of the bunch, and with its acquisition of Dhingana, will only get better.

  • JS3

    if you listen to music really then Spotify if DEF the way to go. Also if you buy ANY amount of music from iTunes rather it be a couple songs or a bunch of songs then once again Spotify IS THE WAY TO GO!!!

  • Byron C Mayes

    They’re not “going to be” eliminating the annual option. It’s gone now.

    Also, you note that Apple iTunes Radio doesn’t offer on-demand music. Pandora does not offer on demand music either. Not even to One subscribers. That’s only Beats, Rdio, and Spotify.