Pandora removing 40 hour per month mobile listening cap beginning in September, ahead of iTunes Radio launch
Pandora says it will no longer restrict mobile listeners to a 40 hour a month streaming limit, with users being able to listen to their streams unlimited, starting in September.
Pandora’s founder, Tim Westergren, announced the news during the company's Q2 2014 earnings call on Thursday.
“We’re pleased to once again maximise free listening for everyone on Pandora,” Westergren said. “The more than 70 million listeners that tune in every month will now have more time to hear the music they love, and thousands of working artists will reach more fans.”
Pandora introduced the mobile listening cap in February of 2013 for customers unwilling to pay for Pandora's monthly One service that offers an unlimited stream. Now all users will have unlimited use - but with ads, of course, if you're not paying.
In February, Pandora said the introduction of the streaming cap affected only 4 per cent of its total monthly users, as the average listener listened to roughly 20 hours. Pandora said it made the change in February to help pad a per-track royalty rate that will increase 16 per cent over the next two years, but this has changed as it's gained insight into how users are listening.
Mike Herring, CFO of Pandora, said: "Notably, Pandora plans to eliminate the blanket 40-hour-per-month limit on free mobile listening effective September 1st. In the six months since we first implemented the free mobile listening limitation, we have gained critical insights into our user population that has given us greater control of our business.
"Because of these insights Pandora has implemented both other surgical levers to control content cost and new features that will allow for greater product usage."
Pandora is available in the United States, Australia, and New Zealand, offering an automated music recommendation service for listeners to find new tunes. As of 2011, Pandora boasted 800,000 tracks from 80,000 artists in its library, and in 2012 the company reported having over 150 million users.
The Q2 2014 earnings are Pandora's last earnings report before Apple launches iTunes Radio to publicly in September. The company saw revenue increased 58 per cent year-on-year to $162 million, with a $7.8 million net loss in income.
“Our second fiscal quarter was an important inflection point in Pandora’s history," said Joe Kennedy, chairman and CEO of Pandora. "Strong momentum in our mobile business, with non-GAAP total mobile revenue growing 92 per cent year-over-year to $116 million, clearly demonstrates the leverage in Pandora’s business model."