Radio streaming service Pandora has announced that they will be limiting the number of listening hours for their stations to 40 hours per month for users who are using their free service. The announcement comes as the company notes that they have had to pay an increase of over 25% in music royalty rates over the past three years, with an additional 16% increase expected over the next two years. The 40 hour per month limit will apparently allow them to manage their costs.
The free service offered by Pandora is currently an ad-supported model that has allowed for unlimited streaming of stations interspersed by advertisements. Users can upgrade to Pandora One for ad-free listening ($3.99 per month) or pay a fee of $0.99 to remove the streaming limit whilst still retaining the advertising.
Pandora currently offers its services only to users in the US, Australia and New Zealand, meaning that European users will still not have access. Interestingly, the news comes as recent reports suggest that Spotify, a key competitor for Pandora, is in negotiations to launch its own free streaming service for iOS devices.