Pandora’s Spotify rival won’t be ready until later this year

As Pandora prepares to overhaul its entire music streaming service, users are going to have to wait a bit longer until the full on-demand subscription product is ready. The online radio service is preparing to shift into a full-fledged music streaming platform, and will do so with an improved free tier alongside an updated version of its $5-a-month Pandora One offering, and the $10-a-month on-demand product, multiple sources tell The Verge. The new subscription tiers were first reported by The Wall Street Journal.

While the ad-supported and $5 product will be ready for prime time in the coming days, the on-demand option that was announced when Pandora acquired parts of Rdio nearly a year ago won’t be ready until later this year, according to a source. The company is still finishing the on-demand product that will compete against the likes of Spotify and Apple Music. The new service will be available only in the United States at launch, according to multiple sources.

Sources with knowledge of Pandora’s plans say the company's suite of products will be noticeably improved thanks to the new licensing deals with most of the major music labels. (Warner Music Group is the lone holdout, but sources say that deal isn’t at an impasse and will get done in time.)

The new subscription service will be limited to the US at launch

For example, if you use the ad-supported version of Pandora today and start playing a Taylor Swift station, Pandora is only allowed to play a certain number of Taylor Swift songs per hour due to its status as an internet radio station. But now that it has signed deals with the labels (or most of them at least), it can play as many Taylor Swift songs as you like.

Pandora is also leaning heavily on 12 years of personalized listening data from its users, using well over 50 billion thumbs-up clicks from listeners to provide a more curated experience for its on-demand service. Sources indicated Pandora's on-demand service will offer users a curated set of tracks similar to Spotify's personalized Discover Weekly playlists, though whether it can match Spotify in quality is an open question.

With 78 million monthly users, Pandora can focus on up-selling its current customers rather than immediately having to acquire new ones. Multiple executives in the music industry believe the company has a strong chance of challenging Spotify and Apple down the line, given its long history with curation and large base of users.

Pandora did not respond to a request for comment.