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Pandora introduces 40-hour monthly limit on free mobile listening, rising royalty rates to blame

Pandora Music Genome ProjectIn a bid to deal with escalating costs, streaming radio service Pandora is about to impose a 40-hour limit for mobile usage of its free, ad-supported service.

The company announced in a blog post on Wednesday that from March 1 users will be asked to pay a fee if they wish to use the service beyond the 40-hour mark. The move to cap the free service comes in an effort to deal with rising royalty rates, founder and boss Tim Westergren said in the post.

However, according to Pandora’s calculations, the new rule will only affect about 4 percent of its total monthly active listeners. The average listener uses the service for around 20 hours a month, the California-based company said.

“Pandora’s per-track royalty rates have increased more than 25 percent over the last three years, including 9 percent in 2013 alone and are scheduled to increase an additional 16 percent over the next two years,” Westergren explained in the post. “After a close look at our overall listening, a 40-hour-per-month mobile listening limit allows us to manage these escalating costs with minimal listener disruption.”

When users come close to hitting the 40-hour limit, they’ll receive a message from Pandora outlining a number of ways they can continue to use the service. These include switching to a desktop or laptop computer, (the service will continue to run without a cap on these machines) or paying a buck for unlimited listening for the rest of the month. They can also subscribe to Pandora One for unlimited ad-free listening.

“In short, this is an effort to balance the reality of increasing royalty costs with our desire to maximize access to free listening on Pandora,” Westergren said.

Some Pandora users will recall the service once had a cap in place for desktop usage. This was scrapped in 2011, suggesting the current cap may not be in place permanently. And with the new mobile limit expected to affect so few users, and only a dollar being charged for going beyond 40 hours, it’s unlikely we’re going to see too many Pandora users running for the exit.