Spotify is expanding its US services a year after the Swedish firm entered the market, developing an Internet radio service that would directly challenge Pandora Media.
Citing “two people with knowledge of the situation,” Bloomberg said the new service would launch before the end of the year and be funded by advertising.
Spotify has just begun informing content partners about the new service, according to the sources. The music streaming services does include a radio app, but it doesn’t offer the level of control or customisation found in Pandora.
The new service would function as online radio, which is less expensive to run since the the royalty rates are cheaper because royalty rates are lower and set by Congress, according to Bloomberg.
Spotify’s current service functions like a music collection, allowing users to create
The new service would start by year-end and be supported by advertising, said the people, who weren’t authorized to talk publicly. The company has begun notifying some content partners of its plans, they said.
In addition to drawing more potential listeners, a Pandora-like radio service would give Spotify users access to artists who are now withholding their music.
