Pandora to raise subscription pricing, annual option goes away

In a move to cover the rising costs of licensing fees, Pandora will be raising its monthly subscription rate by 25% to $4.99 per month. The new rates go into effect in May for new subscribers.

For those that are already on a monthly subscription plan at the current $3.99 per month rate, you will not be pushed to the new rate. Those that were paying the $36 annual subscription, you will be migrated to a “loyalty” plan at $3.99 per month when the annual arrangement expires.

The internet radio provider cited in a blog post that fees it has to pay to performers via SoundExchange have risen 53% over the past five years and it expects costs to rise another 9% in 2015. Pandora expects the change to affect a little over 3 million of its 250 million registered users.

If you are an existing subscriber to Pandora One radio, then all you need to do is keep your subscription active to keep the old rate at $3.99 per month. Existing annual subscribers that keep their account active after it is migrated to a monthly subscription will also keep the old rate. If you do not yet have a subscription to Pandora One, you can subscribe before the price increase goes into effect and lock in the “loyalty” rate.