Wednesday, May 18, 2016

Pandora to Remove 40-Hour Free Listening Limit Ahd of iTunes Radio Launch

During today's rnings call, Pandora CFO Mike Herring said the company will againallowunlimited listening via mobile devices, eliminating its recently implemented monthly cap. Firstintroducedin February, Pandora's 40-hour per month limit was put in place as a direct result of incrsed royalty rates.

While desktop Pandora listeners were able to listen to unlimited music, mobile users that exceeded 40 hours had to subscribe to thePandora Oneservice at $36/yr or pay a small fee.

According to Herring, both incrsed advertising income and and tighter control over other cost saving techniques have allowed the cap to be lifted.TechCrunchhas a transcript of the call:
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 incrse in RPM and a decrse 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 incrsed 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.September will also see the debut of 's iTunes Radio, which is bundled into iOS 7.iTunes Radiowill be ad-supported for all subscribers, though ad-free service is available foriTunes Matchsubscribers. iTunes Match includes iCloud syncing for music acquired outside of iTunes and is priced at $25 annually -- significantly cer than the $36 Pandora One.

Pandora CEO Joe Kennedy toldAllThingsDthat the company is not worried about the launch of iTunes Radio:
"We've now been around for eight yrs. We've seen competitors large and small enter the market and, in some cases, exit the market. I've never seen an analysis that identifies an effect from any competitor … we don’t see the picture changing."Pandora has reported revenues of $162 million, up 58% yr over yr. Its 40-hour listening cap will be eliminated on September 1, less than two weeks before iTunes Radio and iOS 7 are expected to be unveiled at 's September 10iPhone event.

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