Pandora has put a 40-hours-per-month listening cap on the free music streaming service it offers in the U.S. on mobile devices. Pandora's founder Tim Westergren posted a message on the company's blog, explaining why the company had to enforce this policy.
The reason for the new policy is that Pandora had to find a way to deal with the rising cost of music royalties. Tim Westergreen posted a message on Pandora's blog by first pointing out that most users of Pandora will never hit the 40-hour limit since most users spend approximately 20 hours per month listening to Pandora across all mobile devices in any given month. He also went on to explain why the company would have to begin enforcing this new policy:
"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."
He went on to say that the company had to do this so it could balance the reality of increasing royalty costs with Pandora's desire to maximize access to free listening through mobile devices. He also revealed that Pandora would alert mobile users when they are getting close to the 40-hour cap and reminded users that there is no cap on using the service from desktop and laptop computers. Mobile users who exceed the cap can pay $0.99 for unlimited listening for the remainder of the month or pay $3.99 per month to subscribe to the company's unlimited, ad-free Pandora One service.
Pandora is also getting ready to face two huge competitors, technology giants Apple and Google. Both companies are reportedly planning to enter Pandora's space and launch a free service similar to Pandora.
