Published: Thu, March 16, 2017
Markets | By Terence Owen

Pandora's New On-Demand Service Has Arrived

Pandora's New On-Demand Service Has Arrived

Pandora is bringing on-demand song choice to its streaming radio service - for a premium.

All of this sounds great, but Pandora's fighting an uphill battle against Spotify, which has 50 million subscribers to its paid service and over 100 million users overall.

Pandora hopes this new tier of service helps strengthen its position in the competitive music streaming market.

Second, Pandora Premium will have a hard time switching current users of competing subscription services, because they would have to go through learning a new app, building from scratch song lists, playlists, and a profile of music taste.

Pandora Premium launches later this week, combining Pandora's personalized radio stations with the ability to search and play any track, album or playlist tailored to listeners's distinct preferences.

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But the question is, will people actually make the transition to a new platform? Premium users can make a playlist, add two songs - "Blood and Thunder" and "Angel of Death", say - tap "Add Similar" and get a bunch of other, uh, feel-good songs. "If this is your first time signing up for a streaming service, you'd be hard-pressed to find an easier experience".

Pandora's decision to start an on-demand service has been criticized in recent weeks by Greg Maffei - CEO of Liberty Media (LMCA), the majority owner of satellite radio service Sirius XM (SIRI) - who has intermittently expressed interest in acquiring Pandora. Existing Pandora users will receive their invitations to try out Pandora Premium starting on March 15. Premium will be available this week on iOS and Android phones, Google Chromecast, Apple CarPlay, Android Auto, and in many cars.

Pandora's unique advantage is its understanding of what users like, making the service like "a friend you have known for a while", Westergren said. Each of these features is likely to limit the pain points in transitioning to the new service in Wedbush's view, as the primary obstacle for music streamers in changing platforms is likely the inability to transfer playlists and previously-downloaded tracks across platforms, while existing Plus users can leverage their existing usage data and personalized metrics to build out Premium playlists and form listening habits naturally with minimal friction.

Every song thumbed up on Pandora is immediately available in a "My Thumbs Up" playlist. If you're a student, you can get Spotify Premium for just $4.99/month, and families (up to six users) can get Spotify Premium for $14.99/month.

Spotify's "Home" pane also offers tailor-made suggestions, much as Pandora's "Browse" feature will. It'll also continue to add to this playlist for all songs you Thumbs Up going forward.

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