Pandora debuts $9.99 service that rivals Spotify, Apple

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

The new on-demand service Pandora Premium, which costs $9.99 monthly, lets subscribers choose and play any song or album and use new playlist creation features. Currently, Pandora's Internet radio can be listened to free with advertisements, but you cannot choose a specific song, only artists or a type of music. Listeners can give songs a thumbs up to hear more songs similar to that or thumbs down to not hear that track again on that station.

Pandora will send out invitations to current select users on Wednesday, with options for all users to upgrade in coming weeks.

Pandora hopes this new tier of service helps strengthen its position in the competitive music streaming market. It already reigns as the top music service in terms of overall listening, earning 28% of all streaming music hours in 2016, according to research firm MusicWatch. YouTube (including YouTube Red subscriptions), was second at 27% and Spotify came in third at 17%.

However, Spotify has the most paying subscribers, 43 million of the 100.4 million worldwide, according to tech analysis firm MIDiA, with Apple Music second at 20.9 million. (Note: Spotify hit 50 million subscribers earlier this month.)

Pandora Plus ($4.99 monthly) lets you listen without ads, skip more songs and download music for offline listening. Pandora Premium matches Spotify, Apple Music and YouTube Red, each of which cost $9.99 monthly.

Pandora had 81 million listeners at the end of 2016, with 4.39 million subscribers, the company says. “  “With Premium, we’re leveraging our immense trove of data and everything we’ve learned about personalization to offer a listening experience that sets a new standard for what a music service should be," said Pandora CEO and founder Tim Westergren in a statement.

Among the new features:

Downloads. You can download songs, albums, playlists and stations.

Smart playlists. You can start a playlist with one or two songs and Pandora will fill out the playlist if you choose the "Add Similar Songs" function.

My Thumbs Up playlists. Every song you’ve thumbed up on Pandora is immediately available in your “My Thumbs Up” playlist. Also, if you hit thumbs up on a couple songs on any radio station, a new playlist is automatically created.

Current Pandora Plus subscribers will get six months of Premium for free. Premium will be available this week on iOS and Android phones, Google Chromecast, Apple CarPlay, Android Auto, and in many cars.  Premium will come to desktop computers and other devices in the coming months, the company says. For a Pandora Premium invite, go to the Pandora site.

That six-month free trial for current Plus users is "compelling," said John Egbert, an equity analyst at Stifel, in a note to investors Monday. He maintains a Buy on Pandora shares with a target of $15. "Pandora may be able to convince a large chunk of its ~4.5mm Plus subscribers (as of January) to sign up for Premium," he said.

Upon seeing a demo of Pandora Premium in December, Egbert said that the offering could be "superior to on-demand offerings from bigger companies like Apple, Amazon, and Google from a quality standpoint."

Pandora Media (P) shares rose 1.9% to $12.36. Shares are off 17% from its 52-week high touched in September and are off 67% from their 2014 peak.

Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.

USA TODAY


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