Greg Sandoval of The Verge wrote a nice piece -- Biting the hand that feeds you: Why are record labels fighting Pandora? -- where he articulates what Pandora means beyond merely spinning records:
For the record companies, it's like walking a tightrope. They must balance their desire to maximize profits while they avoid killing the new revenue stream in its infancy. If access models fail, the labels risk ending up back in a world where a single player like Apple holds all the power
Battling Pandora will be tricky for the music sector. Multiple music industry insiders have told The Verge that the labels consider Pandora a capable and communicative partner. Then there's the money. According to the RIAA (The Recording Industry Association of America) report and statements made by SoundExchange, the group that collects royalties from web radio services, Pandora contributes about 25 percent of all the money the labels receive from the access models. (Incidentally, SoundExchange's revenue was up 58 percent last year.) But this is precisely why the RIAA won't budge on the rates. Sources say that the labels believe web radio is bigger than Pandora and the market will expand soon. Apple is coming.Simply put, more competition, as Pandora has argued all along, is a good thing. It's good for Pandora because, with more Internet radio players, rates will likely come down. And it's good for musicians because, even if rates do come down, there will be that many more outlets playing their songs. So, no, Pandora absolutely is not screwed. It's positioned in the driver's seat to a much greater extent than most observers give it credit for. Follow @rocco_thestreet -- Written by Rocco Pendola in Santa Monica, Calif.