Pandora sets free streaming limits for mobile users

Avid Pandora users now find themselves potentially paying to listen to the streaming music service from their mobile devices.

Pandora announced it will start charging mobile users  who go over 40 hours of listening in a single month. The policy change took affect March 1.

The reason for Pandora's policy change is to cover the increasing price of per-track royalty rate that increased 25 percent over the last three years, including a 9 percent increase for 2013, Pandora founder Tim Westergren said.

Pandora said it predicts a 16 percent increase over the next two years on its website.

"After a close look at our overall listening, a 40-hour-per-month mobile listening limit allows us to manage these escalating costs with minimal listener disruption," Westergren wrote in a message to listeners.

The possible charges will not apply to desktop listeners, or those who subscribe to Pandora One. The company also stated the average Pandora listener will spend about 20 hours a month streaming music on all device types a month.

For listeners who do hit the 40 hour limit on their mobile devices, Westergren states users will have the option to pay $0.99 for unlimited listening with advertising for the remainder of that month, or subscribe to Pandora One unlimited listening with no advertising.

Mashable.com also reports users will get a notification when they hit 85 percent of their usage time.

This is not the first time Pandora implemented such a free streaming cap policy. In 2009 the service set a 40 hour limit on its desktop services that affected about 10 percent of listeners. That cap was lifted in September 2011.

Pandora CEO Joe Kennedy said the company will re-evaluate the new policy in the future, and if revenue catches up to per-track royalty rates the cap could be removed, as reported by Mashable.

In the last quarter of 2012 Pandora reported $74 million in mobile revenue, a 112 percent increase year-over-year, according to Mashable.