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Pandora signs label deals in latest streaming move
[NEW YORK] Pandora, the leading internet radio station that has been looking to dent the rise of Spotify, announced Tuesday that it had struck licensing deals with major record labels.
Pandora said it had reached arrangements with Universal and Sony Music, two of the three major record label conglomerates, although not for the moment with the third, Warner Music.
The deal will allow Pandora to offer on-demand music along the lines of Spotify and Apple Music, which are widely seen in the music industry as the future of growth.
The New York Post reported earlier this month that Pandora was considering a US$5 a month on-demand service, trying to undercut Spotify whose premium, advertising-free version costs twice as much.
Pandora did not reveal its plans further but said in a statement that it intended to "bring new products to market that enable enhanced subscription service."
"Working together, we can reshape the digital music market and grow a great business that provides tremendous value to the music industry for decades to come," said Tim Westergren, the founder and chief executive of the California-based company.
Pandora has designed itself as similar to a radio station, making it popular for casual listeners or restaurants seeking an automatic music selection.
It says it has 78 million active users - an impressive number but stagnant compared with the fast-paced growth of competitors.
Sweden-based Spotify said in June that it had topped 100 million active users, although only 30 million paid for subscriptions.
Streaming has offered a long-awaited source of growth in the music industry, with global revenues last year rising for the first time since the dawn of the internet age, although some artists question the compensation levels.
Pandora said it also reached a deal with Merlin, which represents independent record labels. It earlier entered arrangements with major music publishers.