Spotify reportedly creating online radio station to rival Pandora

Although we're still waiting for the regular service to launch in Australia, it looks like in the US, Spotify may be looking to beat Pandora at its own online radio game.

(Credit: Spotify)

The streaming music provider may be building an online radio service that could rival that of Pandora, according to Bloomberg.

Citing "two people with knowledge of the situation," Bloomberg said that 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.

Spotify currently works as a downloadable application that provides access to your local music libraries and lets you search for and play music online. Users can also create playlists containing both local and online songs. Spotify does include a radio app, but it doesn't offer the level of control or customisation found in Pandora.

The new service, should it come to pass, would act more like Pandora, in that it would function as online radio, which is less expensive to run, since the royalty rates are cheaper, according to Bloomberg. Pandora allows users to easily create their own online radio stations based on specific genres, such as rock, jazz, classical, Motown and comedy.

An online radio service would provide two benefits to Spotify — the potential of drawing in more users who could upgrade to a paid plan, and the ability to grab certain artists, such as the Beatles, who have so far declined to make their music available.

Spotify has been busy trying to grow its service. The company scooped up US$100 million in venture capital (VC) funding last year, and has been signing deals with such advertisers as McDonald's, AT&T and Coca-Cola.

The company has so far remained mum about any plans for an online radio service, telling Bloomberg that "we have no announcements to share at this time". A Spotify rep told CNET today that "we have nothing to add on this one".


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