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Pandora gets into 'on-demand' music streaming with its purchase of Rdio

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NEW YORK, NY - JUNE 15:  A banner for Pandora Media Inc., the online-radio company, hangs in front of the New York Stock Exchange walk on its first day of trading as a public company on June 15, 2011 in New York City. Pandora stock rose as much as 63 percent to $26 following its debut on the New York Stock Exchange, under the symbol P. Reversing much of the previous day's gains, stocks fell Wednesday as more news emerged about the fragility of the American and global economy. The Dow Jones Industrial Average fell 88 points, or 0.8%, to 11987 in morning trading.  (Photo by Spencer Platt/Getty Images)
Spencer Platt/Getty Images
The online music service Pandora has purchased Rdio, which will get the company into the "on-demand" music streaming business.

Pandora is known for curating playlists and a radio-like experience for listeners, but now the service is add on-demand listening to compete with Spotify and Apple Music.

It’s so easy nowadays for music fans to listen to whatever song they want, whenever they want. But the field of streaming services is getting a little crowded.  

You’ve got Spotify, Apple Music, YouTube Music, Tidal — and now Pandora is getting into the game of what’s called “on-demand” listening.

Pandora is essentially a curated radio station. You choose an artist and you hear a playlist that Pandora has assembled. But the company announced yesterday its acquisition of the streaming service Rdio, which allows listeners to choose the specific songs and albums they want to listen to.

This will put Pandora in direct competition with others in the $2 billion-a-year streaming business. The Frame's John Horn talks with Amy Wang, a reporter for Quartz, about what this means for Pandora. 


Pandora already has the largest audience among streaming services. so what will its purchase of Rdio make possible?  

What's interesting about Pandora is that up, until now, it marketed itself as a radio services whereas services such as Spotify and Apple Music go for "on-demand," which is when users can just log on and type in a song. [With] Pandora, you have to just wait for your song to come on or let them choose the experience. So it's more of a passive listening experience. 

The acquisition of Rdio makes it so that they will be able to have this "on-demand" experience as well and compete with Spotify and Apple Music directly. Which is something they haven't done so far because they thought they could differentiate in such a way that they wouldn't need to. But now it seems pretty clear that the streaming field is really crowded and they're going to have to compete in that way. 

In its most recent earnings report, Pandora seems to be hurt the most by the launch of Apple Music. Why have they been hurt more than other streaming services?

Pandora's service is not necessarily that distinct from Apple Music right now. Apple has this sort of Spotify "on-demand" program, and they also have a radio service where you can do the exact same thing you can do on Pandora. So people are saying, Why would you do Pandora if you can just do Apple Music? 

What separates Pandora from the other streaming services? 

Pandora has done the radio thing a lot longer than Apple Music or anyone else has. So they know their service better. And it turns out that people are a lot more interested in broadcasting than they used to be. Radio is still doing pretty well. [Pandora] is so good at radio, but they also [will] have this new service, so people can choose songs they listen to when they want to. It's not going to be their main feature, but it's something that will let people get over the frustration of having to wait for their favorite song to come on. 

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