Pandora founder Tim Westergren took to his company's blog with some bad news today: the streaming radio service is introducing a monthly listening cap for non-paying mobile users. You'll get 40 hours of music each month, after which Pandora will ask that you either pay 99 cents to cover the remainder of the month or stick to listening via desktop. Coincidentally, Pandora used to enforce a similar limit for desktop users, but abandoned the policy in 2011. Westergren says the monthly cap should affect less than four percent of Pandora's existing user base, with listeners spending an average of 20 hours streaming music across all devices. There's also the option of subscribing to Pandora One, which carries the benefit of ad-free listening.
Explaining the reasoning behind the cap, Westergren admits the concept is "very contrary to our mission." He squarely directs blame at rising licensing costs. "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," he says. The company already leans on advertising to cover some of that cost, and says that the monthly limit is the best way to avoid further disruptions for all customers. "This is an effort to balance the reality of increasing royalty costs with our desire to maximize access to free listening on Pandora," Westergren says. He's promised that users will be notified as they approach the 40-hour cap.
Pandora users spend an average of 20 hours listening to music each month
Pandora has been waging a long battle with music rights holders; the company took to Congress last year arguing that it shouldn't be forced to pay higher royalties than traditional radio stations. It's also filed a lawsuit against ASCAP over what it claims have become exorbitant fees the organization demands on behalf of songwriters.