In a recent blog post, Pandora founder Tim Westergren said the move “allows us to manage the escalating costs (of royalties) with minimal listener disruption.” Royalties have increased more than 25 percent over the last three years and Westergren said they are scheduled to go up an additional 16 percent over the next two years.
While he said the move is “a very unusual thing to do,” Westergren admits that this won’t affect the large majority of Pandora listeners. Less than four percent of users every reach the 40-hour limit on a monthly basis.
Westergren said they have found that on average, users spend about 20 hours total per month across all devices listening to Pandora. The limit only pertains to Pandora on mobile devices and not those who listen on a desktop computer or are subscribers to Pandora One, a service which eliminates ads from the listening experience.
Pandora plans to alert listeners who are nearing the 40-hour limit. For those who hit the limit can pay $0.99 for unlimited listening for the remainder of the month or subscribe to Pandora One. The company said they will evaluate the new policy in the future.