Pandora seems to have saved from an incertain future by a recent resolution to the two year-old debate over Internet radio fees. The new agreement sees Pandora paying either 25% of it’s US revenue to SoundExchange (the nnnn of the US recording industry) or a greatly reduced plays-per-user rate – whichever is higher. Overall, it’s a win-win for both sides.

High-volume users (those who listen to over 40 hours a month) would end up paying just $0.99 to continue listening unlimited for the rest of the month- a paltry sum if you’re already using the service that much anyway.

Get more details of the Pandora deal at Tech Crunch.

Personally, I only rarely use Pandora, but am happy for its existance. It exposes so many to new music, much of it from indie artists. My new Palm Pre has a Pandora app on it, maybe I’ll start using it now.

Due to an increase in per-play royalty fees, the popular Internet radio site may have to shut down operations if a profitable solution cannot be found. Pandora’s founder, Tim Westergren, told the Washington Post that the company expects to be shelling out as much as 70% of their $25 million in revenue this year- a number too high to continue operation. Recently, the site launched an application for the iPhone, bringing true Internet radio to the mobile platform.

The hike in royalty rates was ushered into legislation last year by industry group SoundScan (who collect and distribute these royalties to labels and artists), nearly doubling the rate per play on the Internet. The U.S. Copyright Royalty Board set these per-song performance rates for Internet outlets higher than those paid by Satellite radio or traditional radio stations (who pay NO performance royalties). SoundScan argues that the potential to profit from Internet radio is higher than other mediums, and therefore the rates are fair.

In January, after attempting to hammer out a deal with UK labels and publishers, Pandora blocked usage of their service to users outside the United States. In a statement on the company’s blog, Westergren said

“It continues to astound us that the industry is not working more constructively to support the growth of services that introduce listeners to new music, and that are totally supportive of paying fair royalties to the creators of music.”

Recently, another major Internet outlet, last.fm, has started paying royalties directly to certain independent artists, cutting out SoundScan, and reducing the per-play amount they have to pay.