Pandora eyes growth with low price, new features

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New York (AFP)

Internet radio leader Pandora unveiled plans Thursday to challenge streaming stalwarts such as Spotify by undercutting them on price and matching them with on-demand music.

The move comes after prolonged market jitters over the future of Pandora at a time that on-demand streaming is remaking the music industry.

Pandora said that its premium service would cost $4.99 a month -- half its earlier cost and half the subscription prices for Spotify and Apple Music.

The company said the new Pandora Plus will include more advanced features to be rolled out in the coming months.

Among them is an automatic switch to offline radio stations whenever a subscriber loses an internet connection -- avoiding the sudden blackouts that remain an annoyance on streaming services.

Pandora, which recently signed licensing agreements with major record labels, said it would launch an on-demand subscription service later this year, for which it did not reveal the pricing.

For Pandora's more popular free tier, the service will make it easier for users to skip or repeat songs if they click on a video commercial -- a potential boon to advertisers, who are crucial to the company's bottom line.

Tim Westergren, the company's co-founder who returned earlier this year as CEO, said Pandora wanted to give users "flexibility" in what they listen to and how much they pay.

"Whether a listener wants to take advantage of our enhanced ad-supported experience, our groundbreaking subscription radio service or our fully interactive on-demand option coming later this year, we have a solution tailored for you at a price point you can afford," he said in a statement.

Pandora has designed itself as similar to a radio station, making it especially popular with casual listeners or businesses and restaurants looking to set the musical mood.

It has 78 million active users -- an impressive number but stagnant compared with fast-growing competitors.

Spotify said Wednesday that it had surpassed 40 million paying subscribers -- soaring by one-third in just the past six months -- with a total of 100 million users when including the Swedish company's free tier.

Unlike Spotify and other rivals such as Apple Music and Deezer, California-based Pandora has a limited global reach due to complex government regulations.

Outside of the United States, Pandora is only available in Australia and New Zealand where the new features will come out next year.