Hasta La Creative!

Pandora is placing a 40-hour-per-month limit on free mobile listening, company founder Tim Westergren announced in a blog post on Wednesday. The decision is designed to move Pandora’s heaviest mobile users to paying subscribers in order to offset rising royalty costs.

Mr. Westergren said the move is antithetical to the company’s goal of trying to provide the music service to as wide an audience as possible, but necessary given ad revenue isn’t sufficient to pay music royalty rates. Pandora said this change will affect less than 4% of its users, heavy mobile users who don’t pay for a subscription.

“Limiting listening is a very unusual thing to do, and very contrary to our mission so we wanted to share a quick explanation,” Mr. Westergren wrote. “Pandora’s per-track royalty rates have increased more than 25% over the last 3 years, including 9% in 2013 alone and are scheduled to increase an additional 16% over the next two years.”

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