While Spotify might be making progressive moves towards bringing more music to mobile platforms, it seems Pandora is still stuck in some sort of crazy dimension, as we discussed on the show last week. The company announced in a blog post this week that increased royalty costs will force Pandora to limit the amount of time a free user can listen on their smartphones and tablets.
Founder Tim Westergreen said that a 40 hour limit will be placed onto free users' accounts beginning this week. Westergreen went on to say that considering an average user listens to around 20 hours a month on Pandora, this change will only affect four percent of its 65 million customers. However, one could safely assume that the 65 million users are not all active. Plus, when you consider that four percent of 65 million is 2.6 million people, that is quite a lot of people who will actually be affected by the change.
What specifically caused this limitation? Pandora explains.
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. 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.
And, if you go over that 40 hour limit, you can simply listen for free as much as you want on your desktop or laptop, or pay 99 cents for the rest of the month. Pandora also suggests that you simply subscribe to Pandora One for unlimited listening with no ads.
So there you have it. While Spotify is looking to cut royalty payouts to unheard of percentages, Pandora is sort of taking the easy way out by limiting the amount of time you can listen for free. While I get that a company needs to make money to stay in business, this move just keeps adding to the amount of things Pandora keeps doing to make you raise an eyebrow at the company as a whole.