Does anyone think Pandora or other internet radio businesses will be around in five years? They’re already struggling and with iTunes Radio on the horizon things won’t be getting any better.
Apple can foot the bill, they can afford to overpay if it drives more iPad sales. They can even afford to share low-rent advertising revenues and make this a break-even iTunes feature. Sort of like the iTunes Store.
Pandora, on the other hand, remains committed to living on advertising and a small amount of subscription revenue. This isn’t a loss leader for anything else, it’s all about monetizing internet radio directly. And that’s difficult, especially for a company that remains heavily-resistant to a paid subscription model, or anything else that lowers their massive audience numbers.
Which means, the entire Pandora model is dependent on some government handout to survive.