Pandora executives said that they would lift for the 40-hour monthly cap on free mobile listening that was announced back in February. This is actually the second time Pandora has instituted a free cap and then lifted it again it last lifted the cap in September 2011.
The decision to do so was announced by the company CFO Mike Herring, who explained the reasoning behind the move during an earnings call. The company has developed more precise techniques to control costs, and recent improvements in advertising allow Pandora to better monetize those extra listening hours.
The decision was made for two reasons the first being when the mobile cap was reinstituted, usage dropped 10 percent. The second is to compete with iTunes radio and Spotify which has no cap. There was one down fall to lifting the cap. Herring mentioned without the cap, subscriptions won’t grow dramatically, and he predicted that they’ll make up 20 percent of the company’s revenue for the year.
The announcement was made yesterday at Pandora’s earning report. The revenue report shows great results Pandora is up 58 percent year-over-year the company predicts that it will be profitable for the full year.