I'm a big fan of Pandora, the Internet's best streaming music site and recommendation engine. Recently it has come to light that the service's future is in jeopardy because of new royalties enacted in March 2007 by the U.S. Copyright Royalty Board force Pandora to give 70 percent of its revenue to labels and artists.
The moment we think this problem in Washington is not going to get solved, we have to pull the plug because all we're doing is wasting money... We're funded by venture capital. They're not going to chase a company whose business model has been broken. So if it doesn't feel like its headed towards a solution, we're done.
I agree with Uneasy Silence that Apple should buy Pandora with a small portion of their US$20 war chest.
Apple should buy Pandora use their predictive and streaming technologies as a promotional tool for the iTunes store. Keep the Pandora application for the iPhone but build in the technology to iTunes. Give both applications the ability to tag and purchase a song via iTunes which is a pure revenue generator for Apple.
Apple could re-brand Pandora as Genius Radio and have a fantastic Web component to the iTunes juggernaut.
While they're at it Apple should also acquire music identification applications Shazam (iTunes link) and Midomi (iTunes link). That way any time you hear music you could immediately identify it, tag it and (ideally) buy it from iTunes. Shazam and Midomi could be rolled into one application and come installed on every iPod touch and iPhone.
C'mon Apple, don't let a gem like Pandora go away, save it!