Music streaming service Pandora just posted big financial losses and also appears to be losing listeners to its competitors like Spotify and Apple Music. With iHeartRadio and Amazon now entering the on demand music streaming game, will Pandora's upcoming on demand service have the ability to compete?

The on demand music streaming competition is growing bigger and bigger as three of the largest players are ramping up new paid services to take on current market leaders Apple Music and Spotify. Amazon just launched its paid on demand streaming service, while iHeartRadio is preparing its own pay-to-play version of its popular streamer. Pandora is now on the verge of adding on demand paid streaming to its repertoire, but some observers feel it is too late to make the impact that Pandora needs to stay afloat.

Pandora Losing Money

Bank Of America analyst Nat Schindler says Pandora is five years behind its competitors, who have already snatched up the biggest portion of potential paid subscribers.

"Even with Pandora differentiating on auto playlist creation, we think it will be hard to attract 10-15 million paying subs," says Schindler. "Especially because switching users off other services that have invested time in building out their personal playlists will be extremely difficult."

Pandora recently reported its quarterly losses for Q3 at $61.5 million, and Music Business Worldwide calculated that Pandora's 2016 net losses "surpassed a breathtaking quarter of a billion dollars." More disturbingly, the company is losing listening ears as "Pandora's active listener base just fell below 78m people for the first time in two years."

Pandora vs. Competitors

Until recently, Pandora has offered a different type of listening experience to those of its on demand competitors. Pandora has been functioning as a radio style streaming service built around playlists in various genres or around particular artists, but its listeners have not been able to listen to a song of their choice on demand as they can with Spotify and Apple Music, or with Amazon's new streaming service.

iHeartRadio has functioned as Pandora's biggest direct competition in free radio style streaming, but it too has recently announced an on demand service coming soon. That leads many to question if all of these players can possibly survive in an increasingly crowded and saturated market. That's why Bank Of America has just downgraded Pandora's rating from "Neutral" to "Underperform." Other analysts, however, are more bullish on the future of the company, with Goldman Sachs, a big investor in Pandora, still recommending a "buy" on the company's stock.