Pandora One hikes monthly subscription fee for new users, scraps annual subscription

By on March 19, 2014, 3:30 PM
pandora, subscription model

Pandora has announced a hike in the monthly subscription fee of Pandora One, a premium service that allows users to listen without advertising. Starting in May, new users will have to pay a subscription fee of $4.99 per month. "Over the next couple of months, we will be implementing some changes to our Pandora One subscription plan", the Pandora Team said in a blog post. Existing users will continue to pay $3.99 per month.

According to Pandora, the reason behind the price hike is the service delivery cost, which has grown considerably in the last five years. Royalty rates have increased 53 percent in the same time frame, and will increase another 9 percent in 2015, the company said.

The company has also decided to scrap the annual subscription option. This means that you'll now only have the pay-per-month option. All annual subscribers will be migrated to a "discounted loyalty price" of $3.99 per month with their next renewal. They'll be notified as the update is applied to their subscription.

Given that the price hike will come into effect in May, those who want to get in for $3.99 a month can sign up now. That being said, this doesn’t mean that the old subscription model will be around forever. The company currently has more than 250 million registered users, out of which only 3.3 million have subscribed to Pandora One.

This is the first time Pandora One has hiked its subscription price ever since it debuted in 2009. Initially, the service was priced at $36 per year, and later on, a $3.99 per month option was added.

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