Bad News For Pandora iPhone Users?

Posted by on June 3, 2010

AT&T has announced that as of June 7 – the same day that Apple is set to unveil their new iPhone – that they’ll be eliminating their unlimited data plan. Under their current plan, unlimited data is $30, but soon, $15 per month will get you 200 megabytes, while two gigabytes will be $25, with $10 per each additional gig. If you go over, it’ll cost you, probably a lot. While AT&T is spinning it as something that will save customers money, this is potentially bad news for anyone with a smart phone and could have some ramifications for apps like Internet radio service Pandora.

Pandora has taken off as the Internet radio application of choice, with many using it as their go-to mobile music app. ZDNet found that a typical user that streams 90 minutes of music a day is about 2.6 gigabytes of usage per month. And that’s just for Pandora, not watching YouTube, uploading photos to Facebook, or anything else.

Under AT&T’s new data plan, his Pandora usage would take him about 600 megabytes over the 2-gigabytes-for-$25 Data Pro plan. For another $10, he’ll get 1 more gigabyte of data – bringing his total to $35 per month, or $5 more than he pays now. Who knows what will happen if he streams for a weekend road trip?

What it comes down to is that once people have to pay for a “free” app, they might scale back their usage or just drop it all together. The music industry’s best known grumpy old man, Bob Lefsetz is calling it the “the death of Pandora,” and it’s not just Pandora, as the future of music seems to be gravitating towards the cloud-based subscription model with your music library streaming. “Customers are getting a good deal, and if they can understand their usage, they can save some money,” AT&T’s head of consumer business Ralph de la Vega said in an interview. The casual user will save money, but what’s a casual user these days? The silver lining is that any users currently on the $30 unlimited plan can stay on it, including when they renew their contract.

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Categorised in: Internet Radio

  • Brian

    While it is true that if people watch their usages, they can save money, ATT is clearly hoping that doesn’t happen. For every customer who gets a cheaper data plan and consistently does not over use their data, ATT actually loses money.

    My best guess is that they are hoping people will shell out the additional $20 for the ability to tether and then go over their data limit.

    As for Pandora, they shouldn’t panic just yet. iPhone users who already have unlimited data plans can keep their plans, even if they upgrade to the new iPhone…they just can’t change their account at all, or get tethering.

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  • http://www.twitter.com/stabitha Stabitha

    I find it rather curious that AT&T’s decision is being called a Pandora killer and not an iPhone killer. It’s certainly put the final nail in the coffin of any desire I’ve ever had to buy one.

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  • Nick

    Verizon isn’t unlimited either. Their unlimited plan is actually capped at 5 gb a month, and if you go over, it is $50 per gb. THAT is ridiculous.

  • http://modekenner.typepad.com/blog/ Brunilda Faustino

    Guten Tag, sehr anschaulicher Beitrag. Grüße aus Köln

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