Will the War Between Pandora and (Fill in the Blank) Ever End?
NEW YORK ( TheStreet) -- That's a clever response by the folks at musicFIRST.

I took it like the good sport I am; however the message compelled me to make an attempt to boil down the war between Pandora ( P) and the music industry. This, of course, is an evolving process with Things Keep Getting Worse For Pandora the latest installment. That piece offers context for the specific things I think Pandora must do better now.

The Twitter exchange with musicFIRST provides an excellent opportunity to highlight one of the music industry's biggest shortcomings as well as an area where Pandora has failed to properly execute.

Absolutely, there's too much emphasis on the paycheck, at least paychecks from royalties. That's not where most individual acts and bands make their money. Never have, never will. For them and their advocates to focus almost exclusively on royalties is shortsighted. And it shortchanges musicians who could more effectively work with platforms such as Pandora to cultivate additional lines of revenue.

An analogy to illustrate this bigger picture thinking: I work for TheStreet. Would I like to make more money? Why not? Do I think I should make more money? I guess, but I don't think about it much. Stepping back and looking at what it means to be part of TheStreet, I choose to look beyond the salary the company pays me. Working for TheStreet opens up so many other avenues of opportunity. I recognize this. I take advantage of them as best as I can.

You have to realize the power of what you're part of. When I started working for TheStreet the number of people paying attention to what I write skyrocketed. This elevated exposure, without doubt, prompted CNBC to call me. The somewhat frequent CNBC appearances led to a call from CNN, where I now appear frequently. This all circles back to more exposure not only for me, but TheStreet and loads of surreal experiences that, knock on wood, continue unabated and become even more dreamlike (thanks to the Pages thesaurus there).

That's not a perfect analogy, but it works to articulate the notion that musicFIRST and the other folks who obsess over Pandora vis-à-vis royalties need to ratchet down the rhetoric as much as Pandora does. Look past your nose. Look at the reality of the situation. Royalties serve a select few; they're not going to do a whole lot to improve the quality of life or further the career of your local indie artist.

Also see Pandora in Talks With Music Industry Over Royalties for an update.

I tend toward the side of the musicFIRST's of the world in one respect. I have grown tired of Pandora's argument that lower Internet radio royalties will meaningfully increase the number of entrants into the space, thereby upping overall exposure for artists. Maybe that's true, but it's difficult, if not impossible, to prove during a time where there is no shortage of Internet radio players under the present systems.

But just because Pandora chooses to push an ineffective argument doesn't mean the music industry should cast it off and fight the company at every turn. It should do just the opposite. At the same time, Pandora needs to do a better job opening the doors to collaboration.

As I have illustrated in several recent articles (a few linked in this very piece), Pandora has incredible power as a partner to the music industry. It has barely scratched the surface with promotions such as Pandora Presents and Pandora Premieres. To this end, Pandora has to not merely tell, but "show" the story of what it can do. And the music industrial complex needs to be just as willing to put down the swords, open its collective mind and compromise.

This collaboration would include, no doubt, a more sane approach to royalties for all those involved (including broadcast, satellite radio and cable), but also equal parts data- and tech-oriented initiatives. How do you take the stacks and stacks of music listening and listener data Pandora has -- make it work in conjunction with something like the Ticketfly platform I wrote about this week -- to help labels, musicians and venues maximize the impacts of their concert schedules, merchandise sales and related activities we have barely considered or have yet to discover?

My article history digs into specifics so I'll spare getting into them here. But, it's the overall point both "sides" need to embrace -- we live in a very different world with respect to music consumption and such. This new world fundamentally changed the way musicians, creators, labels and such should look at an already-antiquated and busted royalty system. Fight for change there, but don't leave money and opportunity on the table by essentially ignoring the possibilities that come with the digital way of being.

As Greg Sandoval reports over at The Verge, Pandora has held "preliminary talks" with indie and major labels as well as groups that represent artists with more formal communication expected to commence soon. Here's hoping both sides, particularly industry executives, take the blinders off and discuss leveraging the power of music beyond tweaks to the present staid royalty structures.

I fully recognize one shortcoming of my argument -- it's much "easier" to craft a solution from this sentiment for performers than it is for publishers, composers and songwriters (though many musicians serve both functions). Theoretically, the songwriter doesn't have the same opportunities to monetize the work he does as the performer. But this is not entirely true either. Plus, that side of the royalty scheme needs shoring up as well. Pandora is not the only one that pays and, more importantly, it doesn't decide how royalties payments get split up among the various players.

I'll be lucky enough to meet with the legendary Paul Williams, President and Chairman of ASCAP, later this week in Southern California. I plan to discuss this and more with him. I'll report back shortly after our talk.

-- Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.