Feb. 28, 2013 at 12:32 PM ET
Feeling the sting from rising royalty costs, Pandora has decided to limit the amount of time listeners can stream tracks before paying the piper. If you’re using the Pandora app on a phone or tablet, you’ll hit the wall at the 40-hour mark, at which time you’ll be asked to fork over 99 cents for the rest of the month.
Will this move pull the plug on the soundtrack to your life? For the vast majority of Pandora’s 65.6 million users, Pandora doesn’t believe so. In a company blog post, the company claims that the average user listens for 20 hours per month on the go, and that overall this move will impact less than 4 percent customers. Still, that’s over 2.5 million people.
The reason Pandora is putting up a paywall now is because the company is being forking over more money for the music it streams to mobile devices. Per-track royalty rates increased 25 percent over the last three years, and they’re expected to jump another 16 percent over the next two years.
Pandora listeners who don’t want to put up with ads or worry about hitting that cap could always upgrade to the premium Pandora One service, which costs $3.99 per month for $36 per year. What remains to be seen is if this limit will cause more music lovers to defect to alternatives like Spotify or the newly redesigned Slacker.
— Via The Wall Street Journal
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