Pandora is best known as an “Internet radio” service that streams music based on your tastes. You know how it works – load it up, pick an artist station, sit back and listen. There’s really nothing to it, but that will soon change. Pandora is interested in mimicking services offered by its rivals, and that explains one reason why it may have made its latest acquisition.
If you missed the news, Pandora announced intentions to acquire Rdio earlier this week. Rdio, like Spotify, Apple Music, Google Play Music and other services, allows users to search for artists or songs and play that content. This is the sort of on-demand service that Pandora apparently wants to offer, marking what would be a huge change in how the company serves up music to its customers.
The move could be good and bad, at least from our perspective. Pandora seems unique in that it’s one of the best at continuing to play music that it thinks its customers will like. Every other service already offers radio stations, however, and more and more are starting to offer content curated by actual humans. That, combined with the offer of on-demand options, gives competitors such as Spotify and Apple Music a big leg-up on Pandora. But, if Pandora suddenly becomes “just another” on-demand provider, then the magic of its “personalized” radio stations seems kind of lost to the noise.
So why attempt to make the switch? Pandora CEO Brian McAndrews said on Monday that he wants Pandora to be the “go-to music destination” and the best way to do that is to provide “radio, on-demand and live music.” Ad Age also explains that Pandora’s current ad-based model (a premium ad-free model is also available), isn’t covering the costs required to pay for the content it provides. Moving to a more expensive subscription-based on-demand service, likely with a monthly fee or similar charge for customers who would gain access to a massive library of tunes in exchange, could help Pandora in that regard.
Pandora didn’t say when it plans to offer its new service, but it probably won’t be long after the Rdio deal closes.