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Can Pandora Take on Competitors with New Subscription Service?

Now has parity with others, but seeks a differentiator

March 14, 2017 | Media & Entertainment

Pandora is launching its anticipated premium subscription tier tomorrow, competing with players like Spotify, which have already been offering similar services, including a feature that once distinguished Pandora from everyone else: personalization.

Pandora Premium, Pandora’s new on-demand service with the now-standard price tag of $10 a month, will roll out to select listeners on March 15. Users will be able to search and play any track or album.

The service includes what other streaming services already offer: playlist features tailored to users’ preferences and the ability for users to curate their music experience.

Pandora Premium also includes personalized recommendations, but that feature no longer gives Pandora an advantage over its competitors. Apple Music and Spotify have offered personalization to their users for some time now.

Among all digital radio services, Pandora is the clear leader in the US, at least according to September 2016 data from comScore Mobile Metrix.

The streaming service is the ninth most popular smartphone app among US adult smartphone users, with a reach of 40.5% of US smartphone users. Apple Music is the only other music streaming app in the top 15, with a reach of 34.2%.

The comScore ranking does not include Spotify, the other key competitor to Pandora.

Meanwhile, a December 2016 study from Midia Research, which looked at the worldwide streaming market share (and didn’t include Pandora because it didn’t have a paid subscription service when the study was conducted) revealed that Spotify holds 43.0% of the paid music subscription market worldwide.

Apple Music, another key player in the streaming music space, has a 20.9% share worldwide.

Overall, if you were to compare the music streaming leaders by the number of subscribers they have, then Spotify leads the pack.

Spotify has more than 100 million active users and over 50 million paid subscribers.

Pandora has roughly 81 million active users and 4.39 million subscribers—but those subscribers are for its Pandora Plus service, which is an upgraded version of its free service that lets users skip ads.

Apple Music surpassed 20 million paid subscribers as of December 2016.

Rimma Kats

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