No wonder Apple never built a radio tuner in the iPod: it's scared of the competition.

Also check out this NPR story, Music Sites Fight Higher Royalty Fees:

Tim Westergren's Pandora Radio site and others like it allow users to determine musical programming tailored to their tastes. Music companies want to charge such sites higher royalties. Westergren says that's a major threat to Internet radio.

Here's an older NPR story about Pandora more generally.

Also consider:

Amber and Leo interview Tim Westergren from the Music Genome Project and Pandora, a streaming radio service that introduces you to new music based on your preferences.

And if there's one thing that Tim Westergren learned from 10 years on the road playing keyboards in rock bands, it's that there are a lot of talented groups out there that you've probably never heard of.

At one point, he was hopeful:

"If we keep going as we are, I think the music industry is going to look very different down the road, and I think we'll be able to say that we were a significant part of it."

Late last year, he was at Stanford:

People thought that, by lowering distribution costs, the Internet would reduce the power of the big labels. This has not happened -- because the promotion aspect turned out to be critical as well. I don't know if Pandora will ever become big enough to act as a promotion engine that eclipses the labels' marketing muscle.