In 2009, Pandora's revenue topped off at $50 million. SoundExchange, the group that collects internet radio royalties, took a portion of that to cover their fees and this topped at $28 million. SoundExchange has reported that Pandora's royalty payments account for 45% of their total royalties from non-interactive streaming online radio. Even though the company is still only 1% of the the overall radio marketplace, they still provide a substantial source of income for the music industry. And, unlike broadcast radio, internet radio royalties also go to the artists themselves.
This shows that online radio is a valid source of income for the music industry, especially something that gains as much popularity as Pandora. I think Pandora will only continue to grow, and the money getting paid to SoundExchange will increase. Broadcast radio may not be as popular as it used to be, but online radio seems to be a good source of income that can hopefully be capitalized on and grow to keep the music industry afloat.