In the latest example of not-quite-sure-what-we’re-doing-we’re-making-this-up-as-we-go, effective Sept. 1, Pandora is dropping the 40-song-a-month cap it placed on free mobile listeners back in February. In a rather business-vernacular-heavy statement, Pandora CEO Mike Herring said the change of policy was due to improved cost-control measures and increased advertising revenues.
There’s a lot of speculation swirling around this move. While revenues have indeed been on the rise for Pandora, there is still a lot of uncertainty surrounding the company’s future, as evidenced by the skittishness of their stock. (They lost about 20 percent when Apple announced iTunes Radio back in May, rebounded, then dropped again 9 percent last week.) Speaking of iTunes Radio, many suspect that Pandora’s move to drop the listening cap was pre-emptive, as iTunes Radio is expected to go live next month—a speculation which Pandora apparently denies.
Regardless of the reason, the flip-flop is further indication of a rapidly changing new music market which still has not quite found its footing, and which goes into a brand-new state of flux whenever a new competitor enters the market. While the debate on how musical artists should be paid for streaming music continues to rage, the fact is that services like Pandora are still trying to figure out how to stay solvent, balancing the drawing of new listeners against the average cost to keep those listeners aboard. It will be interesting to see where this all lands in the months ahead.
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