MUMBAI: US based music streaming and automated music recommendation service Pandora will raise fees for the ad-free music streaming service they provide by $1 a month to almost $5 a month in May. The hike is an attempt to cover rising music licensing costs.
The company said, in a Tuesday blogpost, that royalties paid to artistes have risen by 53 per cent over the past five years and are to rise by 9 per cent more in 2015.
The company, which streams music from virtual radio stations to mobile devices such as Apple Inc’s iPhone or Google Android smartphones will bring into effect the $1 hike to $4.99 a month, for new subscribers, in May. The existing monthly subscribers will not be forced to accept the higher charges as of now, said the blogpost without elaborating.
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The service will discontinue annual subscriptions, for which they charge $36 and switch to a monthly ‘loyalty’ model where listeners will have to pay $3.99 once their memberships expire.
According to Pandora, the fee hike is expected to affect an estimated 3.3 million listeners of the 250 million registered users. Incidentally, it is a large chunk of these 3.3 million who tune in to the free ad-supported service.
The blog post attempted to clarify the move by saying, “The costs of delivering this service have grown considerably. We hope that you understand why we have taken these steps. Our goal is to continue to be your go-to internet radio destination.”
The service is one of the world’s most popular streaming music services, with tough contenders like Spotify and Apple Inc’s iTunesRadio. Pandora is also looking to invest heavily in local sales forces to sell ad spots, along with expanding its four-year-old service.
The company confirmed that active listeners in January fell to 73.4 million from 76.2 million in December, due to normal seasonality, but the year-over-year active users were up 12 per cent.
