On an earnings call today, Pandora CFO Mike Herring announced that the company was lifting its 40-hour limit on free mobile streaming. During the six-month period of the limit, Herring said, "we have gained critical insights into our user population" — as a result, it's focusing on cutting costs rather and abolishing the cap as of September 1st. Pandora introduced the policy back in February, asking users to pay 99 cents a month if they reached the limit. At that point, it said increasing royalty rates were making it difficult to keep the service afloat despite advertising revenue, and that almost nobody would be affected: only 4 percent of users, the company said, would likely ever hit that limit.
Now, Herring says that strong advertising revenue has made up for rising royalty rates; the company solidly beat analyst expectations this quarter, though its future outlook isn't as sunny and it's still barely making a profit. While the 40-hour mobile cap was only in place for six months, it's a resurrection of a similar Pandora policy that limited users to 40 hours a month on desktop; that cap was lifted in 2011.