The company is complaining that the money they pay out to the makers of the music – 14 cents for every 100 songs – is too much. They claim that if they are going to reach their goal of making a lot of money off of the work of other people, then those other people will have to be paid less.
However, for some reason the other people don't like this idea too much. Which is shocking. After all, let's say you were in the gasoline business and you were paying the oil companies the hefty fee of 14 cents per 100 barrels of oil. If you went to them and said it was too much, I'm sure they would understand and immediately cut their price in half.
It seems to me that there is a simple solution to this problem though: The employees of Pandora just need to write and record a few million hit songs. Then they can play their own material and that painful 14 cent charge will go away.
(Read the New York Times article "For Pandora, Ruling on Streaming Royalty Rates Is Crucial")