Pandora’s New Premium Service Lets Users Pick What They Listen To

The $9.99 Spotify competitor launches early next year

Pandora is getting ready to launch Pandora Premium, an on-demand music offering that could let the music streaming service more closely compete with major players like Spotify and Apple Music.

Pandora Premium—unveiled on Tuesday night at a small press event in New York before a much larger holiday concert—will cost users $9.99 per month for the ability to go beyond the internet radio style of streaming and instead play individual songs and playlists. The service also integrates features from Rdio, which Pandora acquired last year for $75 million when Rdio filed for bankruptcy.

While it might seem like Pandora is a little late to the on-demand game, the service has a few things that separate it from major competitors like Spotify and Apple. One key theme is the role of personalized and predictive songs and playlists based on each user's listening habits. For example, if a user creates a playlist with a few songs, they can press a button to let Pandora fill in the rest with similar songs. The search bar has a similar feature, which will show relevant searches toward the top instead. (Think Google search bar but for music.)

Pandora will also have a "new music" section—similar to Spotify's wildly successful personalized suggestions like Discover Weekly and Release Radar. However, instead of a selection of songs, Pandora will give users a number of full albums that might want to check out. (There's also a feature that changes the color of the app based on the mood of the music.)

"Giving someone the keys to the record store might sound great at first, but ultimately it's overwhelming," Pandora CEO Tim Westergren said during the unveiling.

Pandora already has 78 million monthly listeners through its free advertising-supported version and the $4.99-a-month Pandora Plus. The company so far only has 3.9 million paying subscribers (at least before it overhauled Pandora One to become Pandora Plus), so the challenge will be either converting some of those users to the more expensive tier, winning over Spotify and Apple users, or getting people new to music streaming to finally get on board.