Music Business

Pandora Caps Mobile Listening, Cites Rising Royalties

image from c7.valuewalk.comPandora has added a 40 hour per month limit to free mobile listening. In a post on the company blog, Pandora founder Tim Westergren blamed high royalty rates for the cap, and said it would impact less than 4% of their total monthly active listeners. The average listener spends approximately 20 hours on Pandora across all devices each month, according to the company.

"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," said Westergren.

For listeners who do hit the limit, Pandora offers a variety of options including unlimited free ad supported listening on desktop and laptop computers, $.99 for
unlimited listening for the remainder of that month, and subscriptions dubbed Pandora One for unlimited listening with no ads.

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  1. Or consumers will just switch over to one of the other dozen or so mobile streaming apps. The question for Pandora: with competition that fierce, is it worth risking that those consumers won’t come back when the month is over?

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