Pandora on Wednesday announced that, due to the increase in royalty rates, it will increase the cost of its monthly subscription starting in May. The company said that it will also eliminate its annual $36 option, forcing everyone to join a monthly payment plan. The new cost will be set at $4.99 per month ($59.88 per year), though Pandora promises that existing Pandora One monthly subscribers won’t see a price increase “at this time.”
Pandora said that, since 2009 when it launched its premium option, “the costs of delivering this service have grown considerably.” According to the company it is due to the royalty rates it pays to artists on its service, using SoundExchange, have increased 53 percent in just five years and will increase another 9 percent next year. Amazon, which operates a totally different business model, also recently increased its prices for premium services – though has reportedly faced some backlash.
“Beginning this week, annual subscribers approaching their renewal date will be notified as the update is applied to their subscription,” Pandora said. ”Monthly pricing for new subscribers will take effect in May, allowing time for new subscribers to take advantage of discounted loyalty pricing if they subscribe before then.” Pandora said the changes only affect 3.3 million of its customers, a relatively small percentage of the 250 million registered users.
If you’ve been on the fence about moving to Pandora One, now it a better time than ever to make your move.