Pandora Radio Survives, But Is No Longer Free

Yesterday, Pandora founder Tim Westergren proclaimed on the Pandora Radio Blog that the service has stabilized its finances, and credited a recent agreement between artists, labels and webcasters to revise the US Copyright Royalty Board’s prices for online music streaming, ruled in 2007. On the downside, Pandora will no longer be free:

“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.”

What kind of adjustment? Westergren explains:

“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.”

It boils down to unlimited music for a dollar a month, and it only applies to those who listen for more than the stipulated forty hours. It seems like a fair price, and perhaps the most dedicated users won’t mind paying the equivalent of one iTunes song. The change in pricing also guarantees that the service will be able to continue to exist, and will certainly help the survival of all music streaming services.

How much do you use Pandora? Will you stop using Pandora now that it isn’t completely free?