Despite its huge popularity and its one million daily listeners, Pandora is approaching an abrupt end, as radio webcasting services begin to face increased pressure from copyright owners and record companies in terms of royalty fees.

Just to make things clear, almost three quarters of Pandora’s revenue this year will have to go on royalty fees. Last year, a decision from a federal panel significantly increased royalties for Internet radio, and two years from now, these fees are expected to be almost twice as much as those paid by satellite radios.

As Tim Westergren, founder of Pandora, said in a Washington Post interview, they are approaching a “pull-the-plug” kind of decision. “This is like a last stand for webcasting,” he said. He further explained: “We’re losing money as it is. The moment we think this problem in Washington is not going to get solved, we have to pull the plug because all we’re doing is wasting money.”

Although it appears that some politicians are negotiating for a last minute deal with music licensing authority SoundExchange, the chances are that they fail, which puts a serious question mark over web radio stations' head.

SoundExchange doesn’t seem to be willing to let web radio stations live, simply because it demands more money for musicians without thinking of the radio stations as one of the most efficient ways to promote music.

The wave of lawsuits that came from not paying copyright owners their benefits, together with the high royalties, make it hard for Web radio stations to continue their activity legally. Furthermore, while some will be forced to shut down, other stations will continue with their activities, this time illegally, since there will be no other viable alternative.

Despite being one of the most popular Web radio services, as well as one of the most popular applications on Apple’s iPhone, Pandora seems to have reached the end of the road. With it, many more web radio stations will pull the plug, unless somebody manages to do something to take some of the pressure off.