Pandora Days from At Least One Label Deal, New Streaming Platform Reportedly Imminent

John Shearer/Getty Images for Pandora
Tyler Hubbard and Brian Kelley of Florida Georgia Line perform onstage during Pandora Presents Florida Georgia Line at OZ Arts on Aug. 2, 2016 in Nashville, Tenn. 

Pandora's long-rumored venture into on-demand audio streaming could clear a few of its final hurdles as early as next week, a source tells Billboard, which could pave the way for new offerings to arrive next month. The internet radio service will enter the on-demand streaming wars with a $10/month paid tier, the same price as competitors Apple Music and Spotify, and will also beef up its $5/month ad-free online radio offering Pandora One with new features and user abilities, according to the Wall Street Journal.

The company's move, which will mark the first time it will allow its users to choose individual songs, has been widely discussed since Pandora purchased pieces of a bankrupted Rdio last November. And it comes at a time when the on-demand subscription streaming market is heating up and getting more competitive, both in terms of new entrants (Deezer, SoundCloud Go and YouTube have all joined the fray in the past 12 months), established services (like Spotify, Apple Music, Tidal and Google Play) and an exploding user base (subscriptions grew 66 percent to 68 million subscribers worldwide at the end of 2015, according to the IFPI).

A source tells Billboard that Pandora has been trying hard to get traction on licensing deals with the majors, and is now closer than ever to finalizing a deal with at least one of the three major labels, which could close in the coming days. The deals will allow Pandora -- currently only available in the U.S., Australia and New Zealand due to those countries' relatively radio-friendly licensing rates -- to operate in other English-speaking territories as well, and to expand its catalog.

Whether this move will work for Pandora, which has 80 million monthly listeners and has racked up four million subscribers for Pandora One since its 2009 launch, remains to be seen. But in recent months the company has added more features for its users. Last year Pandora acquired Ticketfly, and introduced a concert recommendations feature this month that leverages the ticketing company's live events to notify users when artists they listen to are performing in the area. And partnerships with Uber and new incursions into the podcasting world with Serial and This American Life have expanded its offerings, while a new marketing push saw the company allocate $3.6 million towards its advertising budget in the first four months of 2016, according to advertising analytics firm Kantar Media, expanding its reach.

But Pandora is still a company in transition, and its quarterly financial report in July revealed growing revenue but ballooning losses of more than $55 million year-over-year. Its stock has rebounded somewhat since a dramatic 35 percent drop in a single day last November, though persistent rumors that the company would be up for sale have been repeatedly denied by new CEO Tim Westergren, who returned to the company earlier this year.

Listeners' expectations of their digital music services have grown alongside those features' services, like Apple Music's exclusives and Spotify's much-loved curation features. Pandora, obviously, is feeling the pressure.

And those two companies are formidable competitors, too; Spotify has the largest streaming audience in the world with 100 million monthly listeners and 30 million paid subscribers, while Apple Music, which doesn't have a free tier and has been operational for just 14 months, has racked up 15 million subscribers in that time by leveraging its relationships and scale to land several high-profile exclusive releases.

Regardless, Pandora has a solid reputation among its users, as well as 16 years worth of data on listening habits and trends that it can leverage as it looks to boost advertising income. But as it edges closer towards what is essentially Pandora 2.0, the picture of what the future of the company looks like is starting to become clearer.

Reps for Pandora did not return a request for comment as of press time.


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