Image source: Pandora Media.

Pandora Media (P) is rolling out new subscription services, just as Spotify and Apple (AAPL -0.16%) are reminding the market how lucrative premium streaming plans can be. The digital-music pioneer introduced Pandora Plus this morning, an ad-free radio experience that will set subscribers back $4.99 a month. 

Let's not confuse this with the services that Spotify and Apple offer for $9.99 a month. Pandora Plus is not an on-demand platform where music buffs can cherry-pick the tracks that they want to hear from a catalog that's millions of selections deep. This is just an enhanced version of the music-discovery offering that most Pandora users consume for free in an ad-supported format.

Pandora Plus is just a glorified update of Pandora One, the ad-free offering that's been around for years but has only swayed less than 5% of the platform's 78.1 million active listeners to open up their wallets. It does include more skips and replays than Pandora One. It also has an offline listening solution. It probably won't be enough to get the freeloaders that account for more than 95% of the service's audience to start paying. It's also probably not going to be enough to get the growing number of premium Spotify and Apple Music accounts to convert. 

The big catch for Pandora will be when it rolls out its own on-demand service, something that will be coming out soon now that it has secured direct licensing deals with all but one of the major record labels. When it does happen, you can be sure that the subscription will be closer to $9.99 a month -- collusion conspiracies aside -- than half that ransom. Music labels aren't going to trigger a price war when they've already gone through the near death of the CD and the slow fade of digital downloads.   

Let's make some money

Apple revealed that it's now up to 17 million paying Apple Music subscribers during last week's iPhone 7 media event. Spotify is now at 40 million. Spotify's founder and CEO, Daniel Ek, suggested in a tweet yesterday that the milestone was crossed, and the dot-com darling went on to confirm it to media outlets. 

This is the future. Spotify crossed 30 million paid subscribers just six months ago. Apple Music isn't growing as quickly, but 17 million is not too shabby for a service that is limited to Apple's iOS devices and launched just last summer.

Pandora Plus is a welcome distraction, but it will be the $9.99 a month on-demand beast that it can present to its more than 78 million active listeners that will really be the game changer. Pandora relies largely on advertising for its revenue. Subscription and other revenue of $220.6 million last year accounted for less than a fifth of the nearly $1.2 billion in revenue that the company generated overall. 

At $9.99 a month, it would take just 1.8 million subscribers to double last year's subscription revenue. Pandora's total revenue would double with less than 10 million subscribers paying $9.99 a month. One can argue that not every paying subscriber will be at $9.99 a month. Apple and Spotify let students in at $4.99 a month and have family plans at $14.99 a month. Either way, even just modest success here can go a long way. 

Today's arrival of Pandora Plus is an appetizer. The real feast awaits.