Pandora Media Signed Agreements with Major Labels, Getting Closer to On-Demand Service?

Pandora Media Inc. announced on Tuesday that it has signed deals with three major record labels, Sony Music, Universal Music Group and Merlin Networks. The new agreement could possibly allow Pandora Media to offer its own on-demand service.

The agreements announced on Tuesday didn’t include Warner Music Group, which is the only major record labels that didn’t sign deals with Pandora Media. Details of the agreements weren’t disclosed immediately, and the new deals announced only applied to the United States.

Currently, Pandora Media doesn’t allow users to choose specific songs on demand, instead, users could choose a tailored “station” according to their original selection. After the new agreement, Pandora Media may allow users to choose songs on demand. Pandora now is restricted only in a few countries such as the United States, Australia and New Zealand, where music licensing is automatic for internet-radio companies, provided that they pay mandated rates.

Pandora will launch two options for subscription services. Current Pandora One Services that cost $5 per month will be announced in an expanded version, which was said to increase the amount of skip songs and could reserve playlists online. Another option is the service that cost $10 per month, which was said to be similar with current on-demand services like Apple Music and Spotify. This service gives users access to millions of songs on demand without constraints.

“This was a truly collaborative attempt to find a solution that would support artists while profitably growing our respective businesses,” said Tim Westergren, Pandora’s Chief Executive Officer.

Shares of Pandora Media increased around 5% to $15.00 per share in premarket trading, but fell 1.64% to $14.06 per share in the afternoon trading session on Tuesday.