With all the attention paid to Apple Music, Spotify and the streaming wars of 2016, industry insiders point to two more fast-approaching entries: Amazon and Pandora.
The retail giant and the Internet radio leader are both currently prepping launches of their own "full-featured" music-streaming services. Pandora launched the first of two expected price tiers this morning, rebranding Pandora One as Pandora Plus and adding offline listening. (It did not, as expected, wait to sign up Warner Music.)
Amazon's $9.99-per-month service -- which costs half that for owners of its Echo smart speaker -- won't be far behind, and could launch by year's end. Sources in June told Billboard that a deal between Amazon and the labels was not imminent, though these things have a tendency to come together at the last minute.
Amazon already offers a scaled-back streaming service in Prime Music, launched in June, 2014 and included in the popular Prime membership program. So what will these new price points bring to listeners?
Pandora Rebrands Its $4.99 Digital Radio Subscription as Pandora Plus, Adds Offline Listening
The upcoming offering from Amazon is more of a mystery (the company, in keeping with tradition, declined to comment on any aspect of it to Billboard), though the strategy its pursued with Prime Music would point to a continued focus on its exclusive compilations, like All Is Bright. It will not be, as many seem to think, a $4.99-per-month "limited" service, but rather a discount, arrived at through hard-negotiated minimum revenue guarantees for record labels and publishers, a discount in order to move Echo units.
Amazon doesn't release specific subscriber counts or catalog numbers, only saying it has "tens of millions" of Prime customers worldwide and "millions" of those listening to Prime Music each month, which has a catalog of "over a million" songs, or about 1/35th that of Spotify.
As for Pandora, its 78.1 million monthly listeners will have two options, both salvaged from the now-defunct Rdio (one more than the other -- today's launch is clearly more iterative on the core radio product than its forthcoming Spotify competitor will be), which it bought for $75 million last year. The first is a $4.99-per-month update of One called Pandora Plus that automatically caches four stations on listeners' phones. A more full-featured, $9.99-per-month service is expected by year's end. (This choice bit, from the bankruptcy filing of Rdio, describing the aspects of Rdio they thought appealed to Pandora, is telling: the "service involved more specific, personalized, customer choice and a tiered-priced subscription service.")
Pandora Announces Licensing Deals -- With Everyone But Warner Music
In order to get to this point, however, Pandora had some ground to make up after the exit of Brian McAndrews as CEO. His replacement, company founder Tim Westergren, tells Billboard his first week was spent meeting with the industry's most powerful record executives -- Lucian Grainge (CEO, Universal Music), Stephen Cooper (CEO, Warner Music) and Doug Morris (CEO, Sony Music). "Lot of rings to kiss," Westergren says, "those were great first meetings. I had some trepidation given the history [Pandora lobbied fiercely in D.C. to keep licensing rates low]."
But, he continues, the negotiations were "quite collaborative -- this wasn't an adversarial process, these are win-win deals. We were able to get terms that make economic sense."
The result will be, Westergren promises, focused on personalization. "Something you've never seen before."
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Neither of Pandora's new tiers will be available globally at launch, though expansion is very much in the cars. Westergren told the Citi Global Technologies Conference on Sept. 7" the "first order of business is owning the U.S."
All of this points a spotlight on Spotify, a company first launched stateside in July 2011 that's under pressure to trim features from its ad-supported tier, which returns far less revenue to the company than paid subscriptions, and to lock in long-term agreements with the majors in order to successfully launch an IPO in 2017. Says one label source: "Spotify is the leader right now, but this is a delicate situation that either Amazon or Pandora could shake up very quickly."
More than anything, labels would like to see mid-price customers "upstream" into full-price listeners. At the least, five bucks a month is better than zero.
An edited version of this article first appeared in the Sep. 24 issue of Billboard.