Pretty much, it works like this. There is now a 40 hour monthly limit imposed on the folks who are listening for free (it does not include Pandora One subscribers). Once you reach that 40 hour limit, you can pay a fee of, get this, $0.99 to continue listening for the rest of the month, or you can upgrade to Pandora One for $36.00 a year for unlimited listening and a slew of other perks.
Pandora expects this to impact only the "top 10% of users,"so most folks won't even notice this. If you are in that top 10%, you most likely received the following email:
Hi, it’s Tim -I hope this email finds you enjoying a great summer Pandora soundtrack.I’m writing with some important news. Please forgive the lengthy email; it requires some explaining.First, I want to let you know that we’ve reached a resolution to the calamitous Internet radio royalty ruling of 2007. After more than two precarious years, we are finally on safe ground with a long-term agreement for survivable royalty rates – thanks to the extraordinary efforts of our listeners who voiced an absolute avalanche of support for us on Capitol Hill. We are deeply thankful.While we did the best we could to lower the rates, we are going to 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 web. Because we have to pay royalty fees per song and per listener, it makes very heavy listeners hard to support on advertising alone. Most listeners will never hit this cap, but it seems that you might.We hate the idea of capping anyone's usage, so we've been working to devise an alternative for listeners like you. We've come up with two solutions and we hope that one of them will work for you:Your first option is to continue listening just as you have been and, if and when you reach the 40 hour limit in a given month, to pay just $0.99 for unlimited listening for the rest of that month. This isn't a subscription. You can pay by credit card and your card will be charged for just that one month. You'll be able to keep listening as much as you'd like for the remainder of the month. We hope this is relatively painless and affordable - the same price as a single song download.Your second option is to upgrade to our premium version called Pandora One. Pandora One costs $36 per year. In addition to unlimited monthly listening and no advertising, Pandora One offers very high quality 192 Kbps streams, an elegant desktop application that eliminates the need for a browser, personalized skins for the Pandora player, and a number of other features: http://www.pandora.com/pandora_one.If neither of these options works for you, I hope you'll keep listening to the free version - 40 hours each month will go a long way, especially if you're really careful about hitting pause when you’re not listening. We’ll be sure to let you know if you start getting close to the limit, and we’ve created a counter you can access to see how many hours you’ve already used each month.We’ll be implementing this change starting this month (July), I’d welcome your feedback and suggestions. The combination of our usage patterns and the "per song per listener" royalty cost creates a financial reality that we can't ignore...but we very much want you to continue listening for years to come.Please don't hesitate to email me back with your thoughts.
If you ask me, paying a whole dollar to continue listening to a great online radio service is fine by me, especially if it allows them to stay in business. I love Pandora - I listen to it all the time, so I expect to be shelling out $12 a year to continue listening all the time. I think that Pandora is one of those services that the people who use it love. I doubt we'll see any kind of backlash against them for this move. Not only is this a ridiculously fair price, but I think the community will have few problems paying to keep the service alive.
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