updated 10:27 am EDT, Wed March 19, 2014
New rate for new users to offset dramatic increase in cost of business
Online music streamer Pandora is raising its prices for new subscribers. The current subscription cost for unlimited and ad-free Pandora One is climbing 25 percent to $5 per month, up from $4. Existing Pandora One monthly subscribers that remain active will not experience a price increase and will continue to pay $4 per month. The company cites rapidly-growing costs to deliver the service as the reason for the price hike.
In an official blog post announcing the pricing change, Pandora notes that "the royalty rates Pandora pays to performers via SoundExchange for subscription listening have increased 53 percent in the last five years, and will increase another nine percent in 2015."
Additionally, the company is shuttering the annual subscription option. Existing annual subscribers that remain active will migrate to the discounted "loyalty price" of $4 per month at the next renewal period.