Pandora will begin limiting mobile listeners to 40 hours of free listening per month. Today’s post on the company’s blog says the change was made because of a rise in royalty rates the company is required to 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.
From the blog post: “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.”
Pandora says their royalty rates have increased more than 25% over the last 3 years, 9% in 2013 alone, and are scheduled to rise an additional 16% over the next two years. The company says that placing a 40-hour-per-month mobile listening limit allows them to manage the escalating costs with minimal lister disruption.
The placing of the limit comes as both Apple and Google are rumored to be working on their own subscription-based streaming services, and Spotify is reported to be working on bringing its free product to mobile devices.
This follows an earlier report that revenues from digital music are up for the record companies. Will this be yet another case of the record companies greed killing the goose that laid the golden egg?