Pandora to Limit Free Mobile Listeners to 40 Hours a Month Due to Royalty Costs

Pandora Music Limit

Due to rising royalty costs, starting March 1, Pandora will limit free listening for users on mobile devices to 40 hours a month.

In a blog post, Tim Westergren, the founder of Pandora said that a limit of 40 hours a month on mobile devices would take effect this week for its free service. The change, he said, would affect less than 4 percent of its more than 65 million regular customers, since its average listener spends about 20 hours a month on the service.

Listeners will be notified when they reach 85% of their monthly limit, so they can adjust their listening habits accordingly.

”We want people to continue to listen to and enjoy Pandora. We hate to bring any limit to that listening, but think that this is really a balance that we need to maintain,” says Pandora CEO Joe Kennedy.

If you are one of those people affected in the four percent, there are still options available. This new Pandora limit doesn’t apply to desktops and laptops. Also, Pandora offers a yearly subscription that delivers a no-ad stream for $36 a year.

“After a close look at our overall listening,” Westergren wrote, “a 40-hour-per-month mobile listening limit allows us to manage these escalating costs with minimal listener disruption.”

Pandora’s per-song royalty rates have increased 25 percent over the last three years, says Westergren, and are to go up 16 percent over the next two years.

While more than 75 percent of listening to Pandora is through mobile devives, the company pays the same royalty fees for desktop and mobile. The down-side is that advertising pay is less on mobile.

Pandora says this may not be permanent, but as the mobile monetization matures, Pandora will reevaluate its limit on mobile streaming.

“We don’t know exactly what the time frame will be. We believe that monetization on mobile will eventually get into the same range as the desktop, and I think we continue to make good progress in terms of our mobile monetization efforts,” says Kennedy. “So we do see this as not a permanent change, but, and an appropriate and necessary balancing for this stage of development given the royalty cost that we bear.”

Pandora Music Limit on Mobile Devices

Pandora users who enjoy the streaming radio service on their mobile devices may soon be listening to dead air, as the company is instituting a 40 hours per month limit. However, this only affects users of its mobile applications. Pandora is required to pay royalties for every track played, so the goal of offering free music must somehow be balanced with monetizing the platform in order to pay for it. So users who reach the cap will be offered several pricing options, asking them to pay to play further.

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