Pandora will lift its 40-hour free streaming cap next month

Image via Pandora

Pandora has announced plans to drop its 40-hour monthly cap on free listening on September 1. The news comes from this week’s Pandora earnings call, where executives confirmed the cap, which was instituted in February, caused a 10 percent drop in usage.

As reported by TechCrunch, Pandora CFO Mike Herring said the decision to remove the 40-hour limit has come now that Pandora has implemented other tools for limiting free listening, such as song skip limits. Pandora’s advertising business has also improved since February, allowing the company to “monetize those hours from 41 onward at a much higher rate.”

It makes sense that Pandora would wish to invite users in (or back in) with a removal of its free-listening cap, as Apple’s recently revealed iTunes Radio service will launch this fall.

No streaming limit has been officially announced for iTunes Radio, and Apple’s first venture into radio-like services should be instantly popular thanks to its access to the entire iTunes catalog, which currently sits at over 26 million tracks.

If iTunes Radio does have a streaming limit, Pandora will find itself in a much better position in comparison, able to lure away those users to its own platform with newly unlimited free streaming. Either way, the removal of the cap is a win-win for Pandora and for consumers, as the company’s fans would presumably only become more loyal once the limit is officially removed.