Internet Radio Gets a Break, Pandora Adds $0.99 Fee

With the threat of streaming rates for Internet radio rising to levels far above what many services could afford to pay, the future of Pandora and other Internet radio outlets remained very much in limbo. That's no longer the case, at least for Pandora, which reached an agreement everyone involved appears to be happy with.

"Pandora is finally on safe ground with a long-term agreement for survivable royalty rates," said Pandora CTO Tom Conrad.

For Pandora, the resolution means a 40-50 percent reduction in the per-song-per-listener rates. In exchange, Pandora will give up either a 25 percent share of its U.S. revenue, or the per-song-per-listener number, whichever is higher.

For Pandora's user base, the resolution means that anyone who uses the service over 40 hours per month will have to cough up $0.99 for unlimited access. The nominal fee is to help offset the royalty agreement, and is expected to only affect 10 percent of Pandora's users.

Despite the 25 percent royalty rate, Conrad remains optimistic that Pandora will reach its stated goal to be profitable by next year.