Those who have a free Pandora account will no longer be able to listen to more than 40 hours per month via mobile devices, the company announced Wednesday.
The company first removed listening caps on its desktop and mobile versions back in 2011 in an effort to stay competitive with rival services like Spotify and attract more users. Pandora said the reason it’s bringing those listening limits back is due to the high cost of music royalties, which it’s previously advocated to lower several times in the past.
“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,” wrote Pandora founder Tim Westergren in a blog post. “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.”
The move is basically an indication that Pandora isn’t making enough money through advertising to pay for all that music people are listening to, especially when it comes to mobile usage. That doesn’t bode well for a company that can’t seem to get out of the red, despite record listener usage and revenue growth.
That said, Pandora indicates that the average user listens to about half the total cap (20 hours) each month, and only about 4 percent of users will be affected by this change. Those that are consistently hitting the listening cap do have the option to sign up for Pandora’s premium subscription service, or head over to the desktop version for unlimited streaming.
Copyright 2013, VentureBeat