On a blog post, Pandora says it is increasing its monthly ad-free subscriber fees a dollar, from $3.99 to $4.99. The company blames SoundExchange royalty rates: “Over the next couple of months, we will be implementing some changes to our Pandora One subscription plan so that loyal listeners can continue to enjoy a premium, ad-free Pandora experience.
We’ve been fortunate to be able to offer Pandora One at an affordable price since its debut in 2009 at $36 per year and later with the introduction of a monthly subscription for only $3.99 per month. Over this same period, the costs of delivering this service have grown considerably. For example, the royalty rates Pandora pays to performers via SoundExchange for subscription listening have increased 53% in the last five years and will increase another 9% in 2015.
In order to continue to provide an ad-free listening option, we are implementing some changes to the way we price Pandora One, including a modest price increase for new Pandora One subscriptions:
–Existing Pandora One monthly subscribers that remain active will not experience a price increase at this time and will continue to pay $3.99 per month.
–For new subscribers, the subscription price will change to $4.99 per month starting in May.
–Existing annual subscribers that remain active will migrate to a discounted loyalty price of $3.99 per month at their next renewal period.
–We are ending the annual subscription option.
Beginning this week, annual subscribers approaching their renewal date will be notified as the update is applied to their subscription. 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.
Our listeners are our top priority and, while this affects only a small percentage of our listeners (3.3 million subscribers of more than 250 million registered users total), we hope that you understand why we have taken these steps. Our goal is to continue to be your go-to internet radio destination and enable you to hear the music you love wherever and whenever you want.”