NEW YORK (TheStreet) -- At the beginning of July, something happened that largely flew under the radar in the U.S. and generated a sense of bewilderment Down Under: Pandora (P) became available in Australia and New Zealand.

Leigh D. Stark broke the news

on the Australian Web site Gadget Guy

, calling it a "fluke discovery." But even Stark appeared confused by the development, noting "The service that once closed its doors to international activity has for some reason opened them once again, with Australians now able to access the service called the 'Music Genome Project'."

For some reason ...?

Here's the deal, absent any official word from Pandora executives. I reached out to several and their company line has not changed much since founder and Chief Strategy Officer Tim Westergren penned this

blog post

in October 2007: They're "cautiously optimistic" about returning to the international streaming airwaves.

Long story short, Pandora had no choice but to block international IP addresses to its site in 2007. That's what the rules that govern Internet radio, not just Pandora, dictated. The company has always said it has an interest in returning to an international presence, but little more.

Now, all of a sudden, Pandora resurfaces in Australia and New Zealand.

Your Aussie and Kiwi counterparts, as of this writing, can only access Pandora via the desktop.

So, what gives?

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Here's what I think happened:

Pandora struck a deal with regulators in the region to stream music in Australia and New Zealand. And it must have been a good deal. I simply cannot see Pandora signing on to an inequitable royalty structure like the one it continues to deal with domestically.

In fact, I believe Pandora was able to strike a percentage of revenue deal, as opposed to the pay-per-song structure it abides by in America. Under that arrangement, Pandora dished out roughly two-thirds of its first-quarter revenue to cover music royalty payments. I have to believe it would not sign an international deal unless a) it was a percentage-of-revenue deal, not per-song and b) the percentage comes in much lower than it does in the States. In fact, I think Pandora would want to go as low as 25% of revenues.

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To that end, investors should keep this news on their radars. There's no reason why Pandora cannot add more international markets if, and only if, it can arbitrate reasonable content acquisition deals. Given its U.S. success, it certainly has more leverage today than it did five years ago.

An international Pandora could, clearly, have massive implications for the stock. Not only would much of the world love to have Pandora back (it was available around globe prior to 2007), but more markets equal more lucrative advertising opportunities.

Plus, the reemergence of Pandora in Australia and New Zealand underscores the power of IP delivery. That's where observers should direct the barriers to entry argument. Once Pandora secures a favorable royalty scheme in an international market, it can reopen its doors with a literal flick of the switch.

Contrast this with the international ambitions of satellite radio provider

Sirius XM

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(or at least its most optimistic shareholders), which incurs much more extensive costs beyond paying for music.

The real barrier to entry to Internet radio is being able to pay the cost to stream the songs. And, from there, a company needs to spend the money to monetize listening. That requires enormous local sales efforts, an area where Pandora enjoys a considerable first-mover advantage over other Internet radio outlets.

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One other question lingers from the Pandora re-launch Down Under. Why didn't the company make a big deal and publicize the living heck out of the arrangement for the benefit of investors?

First, what's up and running now in Australia and New Zealand is apparently "just" a beta effort. More publicity could accompany an official launch, complete with mobile apps and all of the trimmings.

Second, that's not the way Westergren rolls. He's not into pomp and circumstance. Westergren reportedly sent a rather low-key email

(screenshot via Mumbrella)

to Australian (and, I presume, New Zealand) users welcoming them back and letting them know that Pandora "kept your stations safe and sound -- so you should find them . . . just as you left them when we had to suddenly (and painfully) block your access back in 2007."

Pandora grew organically over the last decade or so. It built its brand, particularly in the early years, via a grassroots word of mouth. Even when


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iPhone allowed Pandora to grow exponentially, the company, in true Westergren style, maintained a measured, relatively low-key stance. Things have not changed much since Pandora went public.

I reckon Westergren would like to see Pandora grow in each new international market it opens -- presuming, of course, that more will come -- the same way it did in the U.S. Organically. Bubbling from the below the surface. Word spreading among the masses. It's part of that startup culture companies such as Pandora continue to embrace.

Follow @RoccoPendola

At the time of publication, the author was long P


This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.