Pandora bumps subscription fee to $5 per month for new customers

Pandora will soon charge new subscribers a bit more to enjoy ad-free internet radio. Starting in May, anyone who signs up for the company's premium service (Pandora One) for the first time will have to pony up $5 a month, a buck more than the current rate. The company explains that its operating costs have grown since it started offering ad-free radio in 2009, hence the price increase. As you'd expect, royalties are one of the biggest contributing factors despite Pandora winning in court against the American Society of Composers, Authors and Publishers' demands for larger rates. In addition to upping its monthly price, the company's also killing the annual $36 subscription option altogether. All current premium subscribers (3.3 million out of 250 million registered users) will be moved to a monthly rate after their subscription ends. The good news is that Pandora's rewarding its loyal customers by continuing to charge them $4 a month -- and yes, that includes last-minute stragglers who sign up before May.