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Pandora and Spotify Respond to Google

By Rick Munarriz - May 22, 2013 at 6:00PM

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Music streaming sites fire back after last week's Google All Access announcement.

The beat goes on in music streaming.

Google (GOOGL -1.34%) introduced a premium music streaming service -- All Access -- last week. This week, we're finding the current leaders stepping up their game in response.

  • Pandora (P) is rolling out a new station -- Pandora Premieres -- that will play upcoming album releases, sometimes in their entirety, days before the new music is available at retail.
     
  • Spotify will be giving Billboard a run for its money, publishing a list of its 50 most-streamed songs.

The two moves may not seem like much, but they're bigger than you think.

Pandora Premieres will be initially sponsored by T-Mobile (TMUS 0.13%). Let that sink in for a bit. The country's fourth-largest carrier is actually sponsoring what should be a pretty popular channel on the country's leading music streaming service.

Pandora, which reports quarterly results tomorrow, has a problem. It relies too heavily on music cumbersome ads for monetization. The vast majority of Pandora's 70 million active monthly users are freeloaders, and just 12% of the dot-com speedster's revenue comes from music subscriptions. Now, we get what will be a prolific station where the branding is valuable. Everybody wins. Pandora gets a little more money. T-Mobile gets exposure, especially at a time when it can use it the most after completing its corporate combination with MetroPCS. Listeners get the new station.

Spotify's move is also about more than just pushing out a list of the songs that are being heard and shared the most. Embedded links will allow folks to stream the tracks even without registering for the service.

In other words, Spotify is getting hungrier for new customers.

Google All Access is more of a threat to Spotify than Pandora given the on-demand features and the similar $9.99-a-month pricing. However, all players will need to step up their game now that the big boys of tech are barging into the club.

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