Apple is poised to press the all-systems-go button for iTunes Radio, but Pandora is striking its hammer now, with company CFO Mike Herring announcing during Pandora's earnings call yesterday that the company will remove its 40-hour listening limit on mobile devices.
Last we heard they had started a 40-hour listening limit per month because of an increase in royalty rates, but now mobile users can enjoy the same unlimited music streaming goodness that desktop users can enjoy, without the $36 per year charge. Just what accounting magic did Pandora perform to provide mobile listeners with unlimited music, for free? Herring explains:
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. With these tools in hand, and insight into how they work, we are resetting our levers in September. Notably, Pandora plans to eliminate the blanket 40-hour-per-month limit on free mobile listening effective September 1st.
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