A few years ago a friend introduced me to a internet radio station called Pandora and whenever I want to listen to any song on demand I turn to Pandora. Almost everyone I know who owns an iPhone or Blackberry has this popular app on their device.

Pandora was in trouble due to a complicated royalty structure and lenghty legal battles with record companies.

Pandora founder Tim Westergren said in his blog that he’s excited about the deal having been struck. However, as part of the deal between webcasters and labels, heavy Pandora listeners will have to pay up so that the company can cover these higher — albeit non-lethal — royalty rates. Some of the heaviest users received this email the other day to their surprise and some were very upset about the rate change.

If you reach Pandora’s new free listening limit of 40 hours per month, you’ll be asked to pay a 99-cent fee. If you decline, your Pandora channels will be off-limits until the following month, when you can start listening for free again. (Another option is to pay $36 for a year’s subscription to Pandora One, which removes audio and visual ads, in addition to the 40-hour limit).

Westergren claims on the Pandora blog that this will affect only ten percent of its listeners. Particularly affected will be workplaces that play Pandora all day long, because the new limit is only enough to cover a standard work week.

I am listening to Pandora right now and I feel $36 or 99-cents a month is very reasonable, and I just signed up for the yearly subscription to Pandora One. According to Michael Robertson, founder of mp3.com he says “net radio is going to die a slow death in the United States.” I tend to agree to Mr. Robertson, and feel this is a band-aid and not a fix, so we better enjoy Pandora and keep opening that box, I mean browser daily.