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Pandora to lift 40 hour free mobile listening cap Sept. 1st

Lewis Leong

Lewis Leong

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Back in February, Pandora announced that it would be implementing a 40 hour mobile listening cap for its free service due to rising royalty costs. Now six months later, the company is planning on removing that cap on September 1st.

While the 40 hour mobile listening cap only affect 4% of its users, according to Pandora, the company never thought the cap was an elegant solution. CFO Mike Herring described the cap as a “blunt tool” during the company’s earnings call. The forced cap degraded the user experience for some, and with rising competition from services like Spotify, Pandora had to change fast. The company noticed a 10% drop in usage after implementing the cap.

Pandora to lift 40 hour free mobile listening cap Sept. 1st

Pandora also cites increased advertising revenue as a reason for removing the 40 hour limit. Here’s what the Herring had to say:

“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.”

Source: TechCrunch

Lewis Leong

Lewis Leong

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