Pandora is looking to provide tough competition to music streaming services such as Amazon and Spotify. The company has been busy chalking out licensing agreements with record companies. It recently announced its collaboration with Universal Music Group, Sony Music, Merlin Network, and other labels.

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Pandora co-founder and CEO Tim Westergren said that the company is in a prime position to create a music streaming service. According to CNBC, Westergren said, "...[L]isteners are very engaged, they've been thumbing on Pandora giving us an enormous amount of very precise information about their preferences."

The New York Times reported that Pandora might soon release an expanded version of its streaming service. Spotify and Apple currently offer streaming services starting at $10 a month. However, Pandora has not released any official statement about its possible subscription rates, only stating that its service would be "mid-priced." Pandora is expected to offer tiered subscription rates between $5 and $10 a month.

The new service would provide more customization provisions to the users including letting them choose which songs they want to hear. Currently, Pandora only lets users select their favorite songs or artists and then it curates a playlist for them.

Pandora has nearly four million subscribers for its ad-free service. Its competitor Spotify has 30 million paying subscribers while Apple Music has 17 million users. Pandora saw a two percent decline in its user base in the second quarter of the year.

The new service is likely to be launched by the end of the year. Pandora did not provide any operating details for its upcoming service.