Popular music stream service is about to get serious
As of today, Pandora’s placing a 40-hour limit on music streamed through its mobile app.
The company is struggling mightily with increased royalty costs, which has led to bringing back the super unpopular 40-hour cap on free music, which was previously applied to the desktop version of the service and eventually lifted in September 2011.
Company CEO, Joe Kennedy, said that the company’s goal is still to offer free music to everyone, but it does need to make money too.
“When you have a per-track royalty structure … there’s an inherent conflict between what radio has always been [namely, free] and what’s pragmatically reasonable,” Kennedy said. “We’re trying to balance the two. We’re certainly not backing down from the vision that we’re the future of radio. As mobile monetization improves over time, we’ll lift this.”
Specific to the modern-day music streamer’s listening behavior, Kennedy noted a difference between mobile and desktop — that there are desktop users who listen to Pandora all day while at work, so a larger percentage exceeded the monthly limit. On mobile, however, the cap should only affect 4 percent of users.
If you listen to Pandora through your phone all day on your awesome portable speaker, chances are you’re part of the 4%. Here’s how things’ll shake out for you. You’ll get a warning when you’re within 85% of your cap. Once you’ve exceeded your monthly allotment, there are a couple of options for you to choose from to deal with the situation:
• Pay a one-time fee of 99 cents to get unlimited listening for the rest of the month.
• Sign up for a Pandora One subscription, which includes unlimited, advertising-free songs.
• Don’t pay and just listen on your desktop / laptop computer for the rest of the month.
Kennedy places a lot of the blame on the rising cost of music, saying that per-track royalty rates have gone up 25% in the last three years, with an additional 16% increase expected over the next two years.
Worth noting: in the company’s last earning report, Pandora reported growing revenue and a tiny profit (though its forecast was a bit less than anticipated).
What do you think? Is Pandora being greedy? Or is the music industry really to blame?