Tim Westergren, Founder of Pandora.com

Recently Pandora.com founder Tim Westergren posted on his blog what he calls the end of royalty crisis. Pandora has been fighting the internet radio royalty war with Copyright Royalty Board for over 2 years and they seem to have settled on agreement that’ll let the amazing music streaming service stream music without any interruption.

Tim says, “The revised royalties are quite high – higher in fact than any other form of radio. As a consequence, we will have to make an adjustment that will affect about 10% of our users who are our heaviest listeners.”

The revision will affect only 1 out of 10 Pandora users. Pandora earns more than $125 million a year and will have to pay 25% of their gross revenues in royalties or 0.09 cents per song – whichever is higher. By 2015 the rates will increase to 0.14 cents per song from 0.09 cents.

Good news for Pandora is that they bagged $35 million in venture capital funding by Greylock Partners just after they reached the agreement.

The question is as a Pandora user will you pay a dollar (equals the cost of downloading a song from iTunes) for unlimited music?

Pandora also offers a premium version for $36/year without ads and other features.

[image credit : lyngraft]