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Published: Wed, September 14, 2016
Economy | By Melissa Porter

Pandora takes on Spotify, Apple with new streaming service

Pandora takes on Spotify, Apple with new streaming service

The New York Times reports that Pandora's service is set to launch first.

The new agreement also includes The Orchid and 30 other independent labels and comes as rumors intensify that the service is prepping a rival to Apple Music and Spotify.

In the coming weeks, according to the Globe and Mail, both companies are poised to introduce new versions of their streaming services priced at approximately $5/month. The on-demand service will likely cost the standard $10 a month, and is primarily being launched in order to provide Pandora with a new subscription income stream, it now generating most of its revenues from ad sales.

The new subscription service from Pandora will give users more control over which songs they want to hear. "We stream more hours of music a month than YouTube streams hours of video", he said. A more recent write-up reveals that Amazon may slash the specified monthly fee down to $5 for customers who are on the Echo, Amazon's smart speaker.

Indeed, there was already pressure earlier this year from Pandora's activist shareholder, Corvex, for Pandora to consider a sale, and Liberty Media's CEO reportedly made an informal offer. The most classic example of which is Apple Inc., which offers its own service for $10/month. However, record labels pulled out and held out for $10, giving Apple no choice but to bow in.

The selection of songs to choose from, ease of use, high-quality sound and a good playlist functionality were other important considerations for selecting their primary digital music subscription service. We believe its key features like offline listening, on-demand "thumbed" playlists, replays and unlimited skips at various price points will help convert existing active listeners and grow the market. Pandora's new streaming service could potentially entice users away from those players.

But if the company can't get those deals done, or if the new service is a flop, there will be big pressure on Pandora to sell itself. Another company, Cür Media, announced plans to introduce a limited $2/month plan.

Whether Amazon or Pandora will find that magical low number remains to be seen. This includes introductory trials, family plans, and student discounts, thus making it very hard to measure what customers are really willing to pay.

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