Pandora will begin limiting mobile listeners to 40 hours of listening per month, the company revealed in a blog post today. The change was made in response to a rise in the royalty rates that the company must pay to record companies.
Users who wish to listen to more than 40 hours per month can subscribe to the Pandora One service and get unlimited listening, as well as no advertising – or pay a one-time $0.99 fee to listen as long as they like for the rest of the month. Desktop users can continue to listen to unlimited music.
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.
Pandora may come under increasing pressure from competitors over the next year – Google and Apple are both rumored to be working on subscription-based music services, and Spotify is reportedly working to bring its free product to mobile devices.