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Pandora imposes 40 hours limit on mobile users due to increasing royalty rates

Due to increases in royalty rates, Pandora will begin limiting mobile listeners to 40 hours of free service per month.

Listeners who want to extend the 40 hours per month limit will either have to subscribe to Pandora One, an annual, no ads and unlimited streaming, subscription, or pay a one-time $0.99 fee for unlimited streaming for the rest of the month.  Desktop users, however, can continue stream unlimited music.

According to a blog post, founder of Pandora, Tim Westergren, states that the new mobile restrictions won’t affect the majority of Pandora’s current listeners.

“In fact, it will affect less 4% of our total monthly active listeners,” says Westergren. “For perspective, the average listener spends approximately 20 hours listening to Pandora across all devices in a given month.”

Rather, the newly imposed hour limitations on mobile users are meant to mitigate the increasing royalty rates that Pandora has to pay record labels and artists.  Since 2010, the per-track royalty rates have increased more than 25 percent, and that percentage is expected to increase an additional 16 percent over the next two years, according to the Westergren blog.

For the outliers that do stream near or over 40 hours using Pandora’s free service, Westergren assured that the users will be notified if and when they are closing in on the limit.

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