This has nothing to do with Pandora's business model or prior arrangement with the music industry. As a matter of fact, this shouldn't have anything to do with Pandora specifically at all.
This is about overall fairness across the different mediums playing music. The delivery system is irrelevant. We're talking about numbers of ears hearing music.
Insisting that it is reasonable to charge Pandora a royalty fee for every time a song is played by a listener (whether it's 100 different listeners playing one song one time each, or one single listener playing a song 100 times over) is ridiculous.
If the same approach was taken with terrestrial radio, you could argue that broadcast companies should have to pay a fee based on each song played over the air multiplied by the amount of listeners they're estimated to have at the time of day the song was played.
Could you imagine the royalty fees that would rack up under that arrangement?
All music distribution services (as well as the music industry itself) has a vested interest in leveling the playing field.
Internet streaming of music is quickly becoming the preferred delivery system by consumers. Internet streaming services like Pandora are no longer niche players in the music content delivery business. Terrestrial and satellite radio companies are trying to emulate Pandora business model.......the best endorsement of what Pandora has been building for years. Point being, the music industry needs Pandora as much as Pandora needs the music industry. As the delivery of music content comes down to one dominant method, Internet streaming, the music industry has no choice but to come to reasonable terms with those delivering their content. Artists will continue to make millions as companies like Pandora provide links to purchase what you are streaming. Streaming will continue what terrestrial has been doing for decades......"avertising" and promoting new music content to consumers. Music Industry revenue is evolving, not going away.
Show me one company that thinks emulating Pandora's business model is a good idea. Just one. No sane businessperson would look at P's financials and think "hey, let's lose money like these guys". Most other streaming services charge a monthly fee (much more than P charges) and those that don't run far more advertisements. P's business CAN NOT survive if they refuse to change their business model. Crying to the government to reduce their expenses will be a failure, and Pandora will wither and die.
Also, artists do not make millions as you claim, particularly from companies like P that wish to give away the artists works for free. A few artists make decent money, but it's not from services like Pandora that pay fractions of a penny per song played and are begging to pay even less. Musical artists make money from live shows (ticket sales), and digital downloads/CD's/merchandising.
the music industry will benefit in the long run and also make more money. They just won't make all their $$$ from Pandora. There will be many more players in this field, national, local and worldwide. The current Congress has a chance to be bold and enact legislation (now rather than waiting till current law expires, 2014. 2015) to allow this industry to grow exponentially. Do the right thing now and your creating the framework for many new jobs, new revenue sources and additional taxes. Not to mention the billions of dollars generated in advertising because this is now the preferred method. Common sense will win this argument and change this current law.