OK, so the market is saturated with similar apps. - however - it is still very early days with regards to internet radio and there is still plenty of opportunity and room for innovation and indeed, profit. More so, if done in a collaborative, non profit kind of way...if you get me..
Existing apps. are by no means perfect - Last.fm makes very obvious recommendations - I type in Jimi Hendrix and it plays me The Doors. I want it to play me Space Guitar by Johnny Guitar Watson but I didn't know that. Or perhaps some 60's Jap Rock...
So there's that and there's also the apps. that just focus on indie/unsigned music. I think they are leaving out a lot of the good stuff by limiting themselves to offering just unsigned material.
Why do ideas that change the world always create wealth?
Mozilla, Miro, Wikipedia....the list goes on. If it was inverse - i.e. the number of non-profits outweighed the number of for-profits - I am quite certain you'd see a bigger change in the world.
This is a cool idea - but I think you definitely should have video.
If you could reach out to the stand up community and get them submitting videos it'd be cool - there are thousands of them as well, so filtering the good stuff is always tricky. Maybe you could tie your voting system into that.
If you are using wordpress I would recommend showinabox.tv - it lets you easily add video to your blog and let people subscribe to it. I'd consider offering footage in HD or Hi-Resolution on Miro (www.getmiro.com) it's by far the best video rss aggregator. I think youtube videos are such poor quality they really don't do most videos justice, when there is an opportunity for people to watch them full screen in DVD quality.
Yes, I wonder if they will eventually get involved with the Warner Music/Jim Griffin plan to charge for music at the ISP level. That's how most people I know would like to pay for music.
It would surely depend on what your longer term goals are. Do you want to set up your own start up? if so, go for the start up option. Being in a smaller company also exposes you to a wider area of activities, which can also be a great advantage, especially if you hope to one day start up your own thing.