Pandora is struggling to pay royalty fees and it looking to mitigate that cost by limiting the amount of time mobile users on a free account can listen to music. According to a Wall Street Journal report, Pandora will limit mobile listening on a free account to 40 hours each month. This change should only affect 4% of Pandora users as most users only consume 20 hours across all devices each month.
Pandora co-founder Tim Westergren justified these changes by noting that royalty rates have skyrocketed 25% in the past three years and are slated to go up another 16% in the next two years. Westergren argues that this new limit is the company’s best option to “manage these escalating costs with minimal listener disruption.”