Pandora shares were off more than 6 percent earlier today, now down over 3 percent on news of a new rival from Spotify.
The streaming music service is launching a new web radio service for mobile devices, which takes direct aim at Pandora’s business model.
This service is free—until now only Spotify’s web service was free, while mobile access required a $10 monthly subscription.
And until now Spotify focused more on letting people curate playlists, rather than listen more passively to ‘radio’ style channels. Now users can save individual tracks to playlists, plus unlimited streaming radio stations.
Spotify’s new mobile app will be free and ad supported, but its goal is to convert those listeners to paying subscribers, offering a paid option with no ads. Spotify and Pandora take two different approaches to curating streaming music into “radio” stations.