Pandora Hikes Price, Cites Rising Royalty Rates

Josh WolfordBusiness

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Like most music streaming services, Pandora's users are mostly the non-paying kind–the ones who are perfectly content to deal with some ads in order to avoid paying a monthly subscription fee. If you're one of those 200 million+ people, you can breathe a sigh of relief–this doesn't really affect you.

But current annual subscribers and future subscribers to Pandora One, the company's ad-free subscription tier, should know that the price of that subscription is going up. Not way up, but up nonetheless.

New Pandora One subscribers will pay $5 a month for the service, up $1 from the current price of $4. If you currently subscribe to Pandora One on a month-by-month basis, your payment level will be unaffected (for now). You're currently locked in at the $4 per month price.

But if you're a Pandora One subscriber who opts for the yearly renewal structure–that option is no longer available. Pandora is nixing the annual subscription option and switching all current annual subscribers to a $4 per month structure.

What that amounts to is a $12 a year increase for those annual subscribers (it was $36 for a year's chunk).

Pandora cites rising royalties as the reason for the price hike.

"We’ve been fortunate to be able to offer Pandora One at an affordable price since its debut in 2009 at $36 per year and later with the introduction of a monthly subscription for only $3.99 per month. Over this same period, the costs of delivering this service have grown considerably. For example, the royalty rates Pandora pays to performers via SoundExchange for subscription listening have increased 53% in the last five years and will increase another 9% in 2015," says the company.

If you were thinking about signing up for Pandora One to get rid of those pesky ads, now's the time. If you do it before May, you can lock in the $4 a month price.

"Our listeners are our top priority and, while this affects only a small percentage of our listeners (3.3 million subscribers of more than 250 million registered users total), we hope that you understand why we have taken these steps. Our goal is to continue to be your go-to internet radio destination and enable you to hear the music you love wherever and whenever you want."

Image via Pandora, Facebook

Josh Wolford
Josh Wolford is a writer for WebProNews. He likes beer, Japanese food, and movies that make him feel weird afterward. Mostly beer. Follow him on Twitter: @joshgwolf Instagram: @joshgwolf Google+: Joshua Wolford StumbleUpon: joshgwolf