The iTunes Radio effect: Pandora will no longer cap free mobile listening

By , Aug 22, 2013

Pandora 4.5 for iOS (iPad screenshot 001)

Pandora’s 40-hour limit on mobile listening went into effect in February, quickly becoming the most hated “feature” of the otherwise stellar streaming music service. The firm argued it felt compelled to introduce the capping due to rising royalty costs, even if the 40-hour limit affected only four percent of its avid listeners. Backflipping now, Pandora said Thursday it will be removing the 40-hour free listening on mobile devices real soon.

The good news conveniently coincides with Apple’s impending launch of its ad-free iTunes Radio, a streaming music service set to arrive next month as part of the iOS 7 release…

Pandora finance chief Mike Herring made it official during today’s earnings call with investors. The company has additionally confirmed via a media release that it will no longer be capping free mobile listening effective September 1, 2013.

Pandora 4.5 for iOS (iPhone screenshot 001)Pandora 4.5 for iOS (iPhone screenshot 002)

Previously, exceeding the 40-hour limit required a Pandora mobile subscriber to pay a small monthly fee of 99 cents via in-app purchase.

The company is able to switch to unlimited mobile listening thanks to the “rapid progress of its mobile advertising,” now at an eMarketer-estimated third place, behind only Google and Facebook.

Herring detailed Pandora’s thinking during the conference call (via TechCrunch):

Our investment in advertising infrastructure and implementing smart levers such as reducing song skipping and limiting mobile listening have helped us drive monetization and manage content costs, as reflected by the increase in RPM and a decrease in content costs as a percentage of revenue

As our results have shown, the continued strong growth in our advertising revenue allowed us to cover the increased royalty costs with dollars left over to invest back into the business. With these tools in hand, and insight into how they work, we are resetting our levers in September.

The 40-hour thing was implemented due to the changes in the economics of the streaming business.

Pandora was feeling the pain because Apple is apparently paying to record labels more than what’s available from Pandora. Indeed, the firm has acknowledged that the limit on free mobile listening was due to the “rapidly increasing royalty costs”.

Pandora also shared a few updated stats: the service is now 70 million users strong, available through more than a thousand consumer electronic devices and streams more than a billion hours of audio each month.

Moreover, the Pandora app will be installed in approximately one-third of all new cars sold in the United States in 2013, the firm said. So, are they concerned about the impending launch of Apple’s free iTunes Radio service (pictured below)?

iTunes Radio (three-up, iPhone 5)

In a word, no.

According to AllThingsD, Pandora CEO Joe Kennedy said:

We’ve now been around for eight years. We’ve seen competitors large and small enter the market and, in some cases, exit the market. I’ve never seen an analysis that identifies an effect from any competitor.

We don’t see the picture changing.

The iOS app got updated today with some “bug fixes and improvements” and a handy sleep timer with 15, 30, or 60 minute options to “continue playing your favorite Pandora station while you fall asleep”.

As usual, download Pandora free from the App Store.

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  • Kevin Guzman

    Stopped using Pandora a looooong time ago. Tried Spotify, and as much as I liked their option to play any song and album in order, they don’t have most of the music that I listen to. Now I’m sticking with Rdio and iTunes Radio because those two are the only ones that have actually impressed me the most.

    • Antzboogie

      They are getting greedy.

    • Stephen Michael Simon

      Don’t know why, but I just can’t like Spotify. I pay for Pandora One because I have had Pandora for so many years that it is taylor made to all my likings. I will however be dropping PO for iTunes Radio because I also pay for iTunes Match for all my 25,000 songs and premium will be included for me. Just hope it can learn my listening habits as well as Pandora has.

  • Royce Otero

    Didn’t really bother wasting my time reading this I use pandora downloader and have no problems with it :)

    • chumawumba

      Unlimited skips!!!!

      • Royce Otero

        It’s funny how my post was removed. It’s the truth lol

  • markocr

    Anyone have gold “slide to unlock” on ios 7?

    • chumawumba

      Reboot, same thing happened to me

      • markocr

        Done, thanks man :) Its maybe for gold iphone :)

      • chumawumba

        I doubt it, for otherwise the black and white iPhones would have their own colors – which they don’t.

      • daniel bonnells

        It could be the gold’s “special feature.” Lol.

  • Brice Folgmann

    Pandora downloader all day :)

  • Guest

    Pandora Downloader removes all disturbing stuff so I don’t give a care what Pandora will say…

  • Johhny Q

    I updated pandora about ten minutes ago and after I opened up the app, it crashes. Took off the pandora downloader tweaks and still crashes, then restarted my iPod still doesn’t work. Can one of you guys help me out here. I’m on ios 5.1.1 3rd gen itouch?

    • A2dap

      Same thing is happening to me so your not the only one that has problem w this app crashing. Also on same firmware and jail
      breaked

      • Johhny Q

        The thing j had to do was reinstall both pandora and pandora downloader. Turn off the tweaks in pandora downloader. Login to pandora then turn the tweaks back on.

  • n0ahcruz3

    Spotify is way better.

  • ridonkulous

    Good, now I can get rid of two of my three accounts…

  • Anthony Antunez

    “Apple’s impending launch of its ad-free iTunes Radio”

    It’s only ad-free if you had iTunes Match. iTunes Radio will certainly have ads, there’s no way it would be free without them.

  • blastingbigairs

    On IOS 6.2 with JB and the new update crashes every time immediately after opening the app. Very disappointed. This just blows!!

    • Mike

      Same thing happens for me. IOS 6.1.2 but updated Pandora by accident. Now it crashes every time as long as I have the Downloader App on too. Take off Downloader App, Pandora does not crash.