Music fans that rely on Pandora to discover new artists and songs will have a reason to celebrate. The company is removing a long-standing 40 hour per month listening cap on mobile devices in advance of the arrival of Apple’s iTunes Radio.
"We're pleased to once again maximize free listening for everyone on Pandora (News - Alert)," Pandora founder Tim Westergren said. "The more than 70 million listeners that tune in every month will now have more time to hear the music they love, and thousands of working artists will reach more fans.”
Pandora cited the high licensing costs for music as the reason for capping listening in the past. Unlike terrestrial radio stations, Pandora cannot obtain blanket licenses from ASCAP or BMI and must pay royalties for each song they play.
The reason the company is dropping the cap effective Sep. 1 is that mobile advertising has grown. Pandora said the cap only affected around four percent of its users.
The move also comes ahead of the launch of iTunes Radio along with iOS 7 next month. iTunes Radio will also allow mobile users to discover new music.
The company has also just released its second quarter earnings report, which demonstrates Pandora’s growth in the mobile space.
"Our second fiscal quarter was an important inflection point in Pandora's history. Strong momentum in our mobile business, with non-GAAP total mobile revenue growing 92% year-over-year to $116 million, clearly demonstrates the leverage in Pandora's business model," said Joe Kennedy, chairman and CEO of Pandora. "To drive future growth, we are accelerating investment in new technologies, channels and capabilities that maximize the value Pandora delivers."
The company’s total non-GAAP revenue was over $162 million, a year-over-year increase of 58 percent. Pandora’s advertising revenues grew by 48 percent year-over-year to $128.5 million, with subscription revenue growing by 153 percent to $33.5 million.
Edited by Blaise McNamee
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