In an effort to keep up with its rivals, Pandora (P) is reportedly revamping a $5-a-month service, giving users the ability to skip songs, play music offline, and more.
The company will also offer an unlimited streaming option for around $10, according to the New York Post, along with the cheaper $5 option.
Since Pandora already has 76 million free listeners, one source told the Post that, “it will have an easier time to get them to pay $5, so you might see some people switch back.”
The stock has fallen 19% in the past year with shares trading around $16.50 on Monday. Investors are hoping the revamp will push Pandora’s stock into a $20 price range, according to the Post. The stock started trading at $16 when it went public in 2011.
But the $5 option could be a risky bet. Pandora has historically depended on ad sales to make up the bulk of its revenue as opposed to paid subscriptions. In the second quarter, they totaled $265 million, the Post reports.
Pandora One, the company’s radio service, already goes for $4.99 a month, and has no ads and fewer interruptions than its free option. Those customers would be rolled into the new $5 revamp. Pandora is targeting Sept. 12 for the launch of its new price tiers, according to the Post.
Coins2Day has reached out to Pandora for comment and will update the story if the company responds.
