Back in February, streaming radio service Pandora alienated some listeners by imposing a 40 hour/month limit on free mobile listening. Of course that was before the folks at Apple announced plans for their own streaming service. Now that iTunes Radio is coming (expected to launch in September), the company has decided to drop the limit. Pandora CFO Mike Erring commented on it:
“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. When we introduced the 40 hour mobile listening limit, we were confident that our scale — over seven percent of total radio listening and PANDORA’s number one ranking in most major markets — would allow us to take this action without impacting our key monetization initiatives in driving the disruption of the radio advertising market and driving our mobile advertising leadership. We’re pleased to once again maximize free listening for everyone on Pandora. The more than 70 million listeners that tune in every month will now have more time to hear the music they love, and thousands of working artists will reach more fans.
That’s a fancy way of saying “iTunes Radio is coming next month, and this is our preemptive strike,” but hey, whatever works. And it’s a win for listeners. There are a lot of people that swear by Pandora that won’t be tempted by Apple’s service, but since iTunes is so integrated in the online music experience, they’ll be starting with a big advantage.
