Pandora to start charging when usage exceeds 40hrs/month

[Cephius]

July 07, 2009
Important update on royalties

For more than two years now I have been eagerly anticipating the day when I could finally write these words: the royalty crisis is over!

Webcasters, artists, and record labels have reached a resolution to the calamitous Internet radio royalty ruling of 2007. Pandora is finally on safe ground with a long-term agreement for survivable royalty rates. This ensures that Pandora will continue streaming music for many years to come!

Many people played a role in getting here. Pandora listeners provided support in extraordinary numbers in Congress, and a group of reasonable and constructive voices on the label and artist side of the table (groups like A2iM) helped forge a middle ground that, while perhaps not meeting all of our aspirations, still represents a thoughtful and reasoned outcome under the circumstances.

For this we are truly thankful and want to express our deepest gratitude to everyone involved.

The revised royalties are quite high - higher in fact 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).

We hate the idea of limiting anyone's listening, but we have no choice but to react the economic realities of the new rates.

There continues to be royalty-related activity in Washington DC. On the heels of the above resolution, there is a new effort in Congress to fix the broader issue of how musical artists are compensated across all forms of radio. The system as it stands today remains fundamentally unfair both to Internet radio services like Pandora, which pay higher royalties than other forms of radio, and to musical artists, who receive no compensation at all when their music is played on AM/FM radio. We, along with the artists whose music we play, strongly support the establishment of a level playing field, a truly fair system, as articulated in a new bill called the Performance Rights Act (H.R. 848).

It has been an extraordinary couple of years. Believe me, I never thought I'd be donning a suit and tie to walk the halls of Congress lobbying for a bill. Thanks to all of you for your continued support. It is incredibly exciting for everyone at Pandora to see the vision for the company truly beginning to take shape. We are all looking ahead with renewed vigor to the future.

Cheers.

Tim (Founder)

Pretty unfortunate that the music industry just continues to ruin anything and everything that could possibly encroach upon their huge amount of profits. The legal expenses that the Pandora guys incurred is incredible, and it's a sad day that unlimited free internet radio from Pandora is going to end. A dollar a month is hardly anything to get up in arms about, but still. Makes me angry

[Azkarin2]

Meh, Grooveshark is better anyways.

But seriously, a dollar a month is nothing to complain about for what you are getting. I know that when I start working 60+ hours a week as an auditor I'm going to need streaming radio and I'll gladly pay $1/month if it comes to that. Also, while I enjoy getting it for free I realize that I should be paying for it in some shape or form. It is technically stealing.

[aru]

It is technically stealing.

Just had to go and say it, didn't you?

[Omnipotent]

FFS, I love pandora. I have found numerous artists that I have never heard of by Pandora that I fell in love with. This is a tragedy.

[Cephius]

Meh, Grooveshark is better anyways.

But seriously, a dollar a month is nothing to complain about for what you are getting. I know that when I start working 60+ hours a week as an auditor I'm going to need streaming radio and I'll gladly pay $1/month if it comes to that. Also, while I enjoy getting it for free I realize that I should be paying for it in some shape or form. It is technically stealing.

Is normal radio over the airwaves stealing too? It's not like you can torrent all the songs you want, Pandora's strength is introducing you to new music based on what you like, which is a GOOD thing for the industry.

[Casty]

$1? I'm surprised it is only that, I was expecting around an extra $5 a month.

[Azkarin2]

Is normal radio over the airwaves stealing too? It's not like you can torrent all the songs you want, Pandora's strength is introducing you to new music based on what you like, which is a GOOD thing for the industry.

With normal FM radio don't those artists get paid or at least give consent to allow their music to be played? I understand your point about introducing people to new music and thus maybe getting them to buy their CD/concert tickets. But I used those sites mainly to listen to mainstream artists, I don't care about small time bands. If I didn't have Pandora/Grooveshark/torrents then I'd probably buy songs. I bet there are more people like me than like you and overall these sites take away potential revenue rather than add.

[Davricle]

With normal FM radio don't those artists get paid or at least give consent to allow their music to be played? I understand your point about introducing people to new music and thus maybe getting them to buy their CD/concert tickets. But I used those sites mainly to listen to mainstream artists, I don't care about small time bands. If I didn't have Pandora/Grooveshark/torrents then I'd probably buy songs. I bet there are more people like me than like you and overall these sites take away potential revenue rather than add.

Labels give their music for free to radio stations with their consent and stipulations that only certain songs off the album are played (at least for a predetermined amount of time). The difference here is listeners really have no influence over the artist or particular song that is played like you do (to an extent) with Pandora. The only thing coming remotely close to this is a request line, and that is not the same as it is the request of an individual playing to a large number of listeners, as opposed to a personal station (like on Pandora).

[Azkarin2]

With Grooveshark you can create your own playlists so I guess thats worse than Pandora. Interesting about the radio though. Is that true with all stations (oldies vs. current pop/rap/etc)? Still though, if the artists didn't give their consent to allow their songs to be streamed it is still stealing (even if Pandora does a better job at promoting their music).

[Cephius]

With normal FM radio don't those artists get paid or at least give consent to allow their music to be played? I understand your point about introducing people to new music and thus maybe getting them to buy their CD/concert tickets. But I used those sites mainly to listen to mainstream artists, I don't care about small time bands. If I didn't have Pandora/Grooveshark/torrents then I'd probably buy songs. I bet there are more people like me than like you and overall these sites take away potential revenue rather than add.

I won't lie, I don't buy much music. But Pandora has introduced me to bands that I wouldn't have known about otherwise, and in turn I spend money when I go to their concerts or (rarely) buy a CD. I'm not spending much money, but its more than I would have were Pandora not around.

And really, my whole aggravation with the whole thing is that the music industry does whatever it can to stifle things like this. They refuse to embrace things that promote music, instead opting to choke everything with royalty suits that try to squeeze every single penny they can out of us.

[Azkarin2]

I won't lie, I don't buy much music. But Pandora has introduced me to bands that I wouldn't have known about otherwise, and in turn I spend money when I go to their concerts or (rarely) buy a CD. I'm not spending much money, but its more than I would have were Pandora not around.

And really, my whole aggravation with the whole thing is that the music industry does whatever it can to stifle things like this. They refuse to embrace things that promote music, instead opting to choke everything with royalty suits that try to squeeze every single penny they can out of us.

I agree 100%. I don't buy music ever (only CD I ever bought was Mystikal lol). I don't care enough for music but am now more interested with torrents lol.

As for the music industry, I feel like they just see this as straight up stealing and don't see the possible advantages of free promotion. I guess all the big labels/bands have all the downside in lost revenue while the small unknown bands have everything to gain. It's all about keeping the competition out I guess.

[guartz]

It is technically stealing.

Technically, it's not.


Always here to serve, ladies and gentlemen.

[Therin]

There's more to internet radio than Pandora, thankfully!

[Cephius]

There's more to internet radio than Pandora, thankfully!

Well, since you brought it up, what are the good alternatives? Anything that is like Pandora in that it will play thing similiar to a song/band you list?

[Day]

FFS, I love pandora. I have found numerous artists that I have never heard of by Pandora that I fell in love with. This is a tragedy.

1 dollar omg 911 status

[Senoska]

...Shoutcast?

[Ivve]

But I used those sites mainly to listen to mainstream artists, I don't care about small time bands.

Considering Pandora's format, I really do not know how you did that. True, you could start a station based around a mainstream band, but the chances of them playing only well known top 40 type groups in your lineup is incredibly slim and would take a lot of thumbs-down tailoring to make anything that remotely resembles that. I mean they wouldn't even necessarily lead off with the song or band you specified; just a song or band that had musical similarities. Then again I never tried putting in some dumb shit I could hear on the real radio; Pandora was usually a place I'd hit up to find new material when my iPod was starting to get stale.

Raises the question: why would you go to some place like pandora.com to make a mainstream radio station when most of the time you can actually listen to local radio stations do their internet broadcast anyway?

I don't mind them charging me a small fee, but I also expect far far fewer repeats in my song rotation as the trade-off.

[GRT]

Haven't you guys heard about this thing called "slippery slope"?

Pretty soon it's gonna be 9000 dollars a month! OMG!!!

[Syntex]

Is normal radio over the airwaves stealing too? It's not like you can torrent all the songs you want, Pandora's strength is introducing you to new music based on what you like, which is a GOOD thing for the industry.

This right here^

I have found artists of similar style that I would have never knew existed because the radio doesn't play more then 50 different songs on a given basis.

Also when does normal radio get like 1% royalties and internet radio gets like 60% or some bullshit.

[archibaldcrane]

I know it's been said already, but

$1

Shut

DOWN

EVERYTHING