I think generally it is the key feature.

Internet radio existed before pandora came along, pandora was novel in that it implemented the music genome project. The idea of the user selecting the next song was counter to their intent.

Playlists, and/or the user selecting their songs wasn’t exactly novel except for the free2play model w/ads allowing its widespread adoption.

IMO pandora paved the way for the commercial viability of Spotify, now pandora has playlists and you can select individual songs and albums. I still use it just for the music discovery