February 27, 2013 5:48pm PT by Erik Hayden
Pandora Limits Free Mobile Listening to 40 Hours
Frequent Pandora mobile music listeners will soon start having to pay up -- or switch to a desktop or laptop. On Wednesday, the Internet radio service announced a cap of 40 hours per month of free listening for those using mobile and tablet devices.
In a note on the company's blog, founder and chief strategy officer Tim Westergren wrote that the move was "very unusual" but that the high per-track royalty rates paid out forced Pandora to make the decision.
"Pandora's per-track royalty rates have increased more than 25 percent over the last three years, including 9 percent in 2013 alone and are scheduled to increase an additional 16 percent over the next two years," Westergren explained. "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 previously had a listening limit on desktop devices from 2009 to 2011, when it lifted the limit. Mobile listeners who exceed the new limit can subscribe for 99 cents for the remainder of the month, subscribe for $3.99 a month to Pandora One or listen for free on a desktop, the company said.
As to why a cap was added for only mobile listening, a spokesperson tells The Hollywood Reporter that more than 75 percent of listeners use mobile devices and that desktop streaming can be monetized at a higher rate.
The company, which states that it has 65.6 million users, has faced increasing competition from music services such as Rdio and Spotify. It previously has lobbied Congress to enact legislation to "end royalty rate discrimination" across cable, satellite and online platforms.