Pandora, the popular internet radio service has just announced a 40-hour monthly limit on free listening on mobile devices.
Pandora’s founder, Tim Westergren says that the monthly limit will affect only 4% of the users and the reason for introducing it was due to the rising royalty rates that have gone up by 25% in the last three years.
In a blog post, Westergren writes:
Most of you reading this will never hit the limit. In fact, it will affect less than 4% of our total monthly active listeners. For perspective, the average listener spends approximately 20 hours listening to Pandora across all devices in any given month.
That said, limiting listening is a very unusual thing to do, and very contrary to our mission so we wanted to share a quick explanation. Pandora’s per-track royalty rates have increased more than 25% over the last 3 years, including 9% in 2013 alone and are scheduled to increase an additional 16% over the next two years. After a close look at our overall listening, a 40-hour-per-month mobile listening limit allows us to manage these escalating costs with minimal listener disruption.
Users who wish to listen to more than 40 hours per month have an option to pay $0.99 for unlimited listening on mobile devices for the remainder of that month or continue listening on their computer or subscribe to Pandora One. Pandora One is the company’s premium music subscription service, which costs $3.99 per month, or $36 per year for unlimited listening and no advertising.