For years, $9.99 has been the standard price for ad-free, on-demand music streaming services like Spotify and Beats Music. But now it looks like companies are finally experimenting with new business models.
Rdio, a small but longstanding player in music streaming, announced Thursday a stripped-down version of its subscription service that costs just $3.99 per month. The new service, called Rdio Select, will allow users to select up to 25 songs per day out of Rdio’s library to listen to on demand as often as they like online or offline.
Users can also listen to ad-free streaming radio stations and skip past tracks on these stations whenever they want. The service will also feature curated playlists to help users find new songs to place in their rotating selection of 25 on-demand tunes.
Rdio Select is an interesting compromise between the free, ad-supported streaming tiers that struggle to make money for artists or the companies that run them and the $10-per-month plans that have so far appealed to only a small sliver of the music-listening public (Rdio still offers services in both those categories). The company points out that its new service costs less than $50 per year, which is around the price that the average music buyer spends on recorded music each year. Services like Spotify, Beats Music, and Rdio’s high-end tier are asking users to spend $120 per month on songs, more than double the consumer average.
Rdio isn’t the first company to try the straddle the line between a free service and full-on premium subscription. Rhapsody last year unveiled its unRadio service, which also allows users to listen to radio ad-free and download a select number of songs for $4.99 per month.