Pandora Gets a Deal and Stays in Business

pandoralogoAccording to reports, Pandora fans can breathe a sigh of release as it looks like the Internet radio service can keep on bringing the tunes. Pandora and other Internet radio outlets had been threatened by large royalty increase that put the cost of doing business basically out of reach. But it looks like negotiations have made this more tenable Pandora and industry wide and also forced a business model change for Pandora.

Here’s a quote from the email courtesy of TechCrunch:

While we feel this is a substantive victory, the revised royalties are quite high — still much higher than any other form of radio. As a consequence, we will have to make an adjustment that will affect about 10% of our users who are our heaviest listeners. Specifically, we are going to begin limiting listening to 40 hours per month on the free version of Pandora. In any given month, a listener who hits this limit can then opt for unlimited listening for the remainder of that month for just $0.99. In essence, we’re asking our heaviest users to put a dollar (well, almost a dollar) in the tip jar in any month in which they listen over 40 hours. We hope this is relatively painless and affordable—the same price as a single song download. Alternatively, they can upgrade to
““Pandora One”, our premium version which offers unlimited monthly listening in addition to its other benefits.


  1. It’d be interesting to see how many people do hit the 40 hours per month. I wouldn’t consider myself a “heavy” user, but if I leave Pandora on in the background, I can easily rack up 3+ hours in a day. At least it stops itself from playing to an empty room after awhile.

    I wonder if there are some smaller labels they could work out an unlimited play setup with? Less variety/popularity of songs, but no fee even after 40 hours.

  2. I play Pandora at work over my iPhone, so I can easily rack up 40 hours in a week if I don’t switch to iPod music in-between. And dice my wife relies on it too, I guess I’m switching to One.

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