Ad-Free Living Gets More Expensive: Pandora Jacks Up Premium Prices

New Subscribers to Pay Nearly $60 per Year

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The new release from Lil Wayne label Young Money
The new release from Lil Wayne label Young Money

Pandora Media, the biggest online radio service, has raised the price of its advertising-free Pandora One option for some users, citing rising royalty costs.

Listeners who now pay $36 a year for the service will be asked to pay $3.99 a month, which is $47.88 per year, Pandora said on its blog.

For new subscribers, the asking price will be $4.99 a month, or nearly $60 per year, instead of $3.99 per month, starting in May.

Existing users of a $3.99-a-month plan will see no change.

Pandora is seeking to defray royalty rates that have risen 53% in the past five years and are set to increase again next year, according to its blog. In an interview last month, CEO Brian McAndrews said improvements in advertising sales have made the free service more valuable, in some cases, than a paid subscription.

"We feel good about monetization of both platforms," Mr. McAndrews said. "It almost depends now what market and what time."

Pandora One has 3.3 million subscribers, according to the blog. Active listeners in February totaled 75.3 million, the company said on March 6.

~ Bloomberg News ~

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