SAN FRANCISCO, March 18 Pandora Media Inc
will increase fees for its ad-free service by $1 a month to
almost $5 a month in May, a move to cover the rising cost of
licensing tunes that may annoy some longtime fans of the popular
The company, which streams music from virtual radio stations
to mobile devices such as Apple Inc's iPhone or Google
Android smartphones, said in a Tuesday blogpost that
royalties paid to artists had risen 53 percent over the past
five years and will rise another 9 percent in 2015.
The increase of $1 to $4.99 a month takes effect for new
subscribers in May. Existing monthly subscribers will not be
forced to accept the higher charges for now, it said without
Annual subscriptions will be discontinued however. Yearly
subscribers paying $36 a year currently will move to a monthly,
"loyalty" $3.99 plan once their memberships expire.
Pandora said the fee hikes should affect an estimated 3.3
million listeners, out of 250 million registered users, the bulk
of whom tune in to the free, ad-supported service.
"The costs of delivering this service have grown
considerably," Pandora said in a blogpost on Tuesday. "We hope
that you understand why we have taken these steps. Our goal is
to continue to be your go-to internet radio destination."
Pandora is already one of the world's most popular streaming
music services though it has plenty of competitors, including
Spotify and Apple Inc's iTunesRadio. It's also
aggressively investing in local salesforces to sell ad spots and
on expanding its four-year-old service.
The company said that active listeners in January fell to
73.4 million from 76.2 million in December, due to normal
However, year-over-year active users were up 12 percent.