Back in February this year, Pandora announced that it was placing a 40-hour cap on the number of free mobile streaming hours per month. The decision, we were told, was made to control the costs that the company was incurring. Now, Pandora has announced that it will be removing the 40-hour limit soon.
The cap was imposed by Pandora when the company was going through a slightly troubled financial spell. The company announced that it intended to control royalty costs by imposing the limit.
However, things seem to have turned around for Pandora. It has now announced that it will finally be lifting this ban on September 1. The reason, we are told, is that the company’s financials are strong and that it has been able to finalize another way of making money from the additional streaming hours.
According to Mike Herring, CFO of Pandora, “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.”
In the past, too, Pandora has imposed such maximum streaming hours cap and then removed it. Let’s hope that the removal of this limit on September 1 is the last time such a thing is happening.