Yesterday, Pandora finally publicly announced the launch of its “new” Plus tier, and in doing so, the company may have kicked off a new era in the story of streaming music. While the features offered with the paid level may seem simple enough, the repercussions of such an option existing at all could be massive.
Pandora’s newly-rebranded Plus option updates the online radio giant’s One tier, which has been available for years now, but which has so far failed to acquire many paying customers, despite the company’s massive user base. For just $5 a month, Plus allows consumers to skip as many songs as they like, listen without those annoying ads, replay something they loved, and perhaps most importantly, save absolute favorites for offline listening. Some of these features come with limits, but many of them are new both to Pandora and to an offering that comes at such a cheap price.
Now that one of the major competitors in the streaming wars has finally gone public with a serious, enticing option for less than $10 per month, the doors have been opened, and there is no going back. Pandora’s move will force the hands of every other big company in the space, and it’s only a matter of time before Spotify, Apple Music, and others began launching limited additions to their platforms that come with cheaper price tags. Pandora isn’t actually the first company focused on streaming music to experiment with subscriptions that cost less than the traditional premium levels, but it is the first that will be around long enough to see the trial succeed.
These upcoming tiers won’t interest the serious music lover, and that’s just fine. The vast majority of music listeners don’t need the functionality of the premium tiers of Spotify or Apple Music, and they aren’t willing to pay for it. By offering something that runs the same price as a latte at Starbucks per month, Pandora opens up its potential pool of customers by tens of millions, and it nabs a momentary commercial advantage over stiff rivals. Spending $120 per year on music—not including any kind of live experience—isn’t in the cards for most people, and realizing and addressing that has been a long time coming.
For a long time, it looked as if none of the most popular streaming services were going to be able to decrease the price of their premium offerings by even a single dollar, which could have limited the size of the industry at some point in the future when growth finally slowed. The major record labels, which have to sign off on allowing the music they own to be streamed, took years to be convinced that lowering the cost per month can actually be beneficial, and that net revenues could rise with the decision. Now that all three companies (Universal, Sony , and most recently, Warner) have agreed, Pandora Plus is ready to roll out. There were reports that when it was ramping up to launch, Apple Music wanted to burst out of the gate with a $7.99 price, but those in charge at the labels wouldn’t agree, and the now-popular service had to stick with the typical $9.99 per month fee.