When you create a video using third-party music, YouTube recognizes it, forces you to monetize your videos, and the proceeds then go to the rightsholders.Technically making a video with pandora running in the background would be against ToS for both pandora and a violation of the RIAA. However, no offense, but if you're recording this for just a friend as you state there's nothing preventing you from just sending him the video, if you're posting on youtube you're doing more than you claim anyway.
Also, the RIAA is an organization; not a regulation. You're thinking of the DMCA.
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