Internet radio service Pandora is looking to cap free mobile usage after 40 hours per month. Company CEO Joe Kennedy believes that the mobile version of the service is in a similar situation to its desktop counterpart from a few years back, which ultimately needed to generate more money. That being said, Kennedy still aims to keep the service free for its users.
“When you have a per-track royalty structure … there’s an inherent conflict between what radio has always been [namely, free] and what’s pragmatically reasonable,” Kennedy said. “We’re trying to balance the two. We’re certainly not backing down from the vision that we’re the future of radio. As mobile monetization improves over time, we’ll lift this.”
Kennedy also said that usage rates greatly vary between desktop and mobile users. The majority of Pandora users (desktop) use the service throughout their work day; therefore, the cap should only affect about 4% of mobile users.
Pandora users will receive notifications when they reach 85% of the limit, and when the cap is reached, they will be given two options: to either pay a one-time fee of 99 cents for unlimited listening for the rest of the month or to sign up for a Pandora One subscription, which includes unlimited songs sans advertising.
<Source: Pandora Blog>