Several Internet radio companies are arguing that a March 2nd decision by the Copyright Royalty Board, a three-member panel under the Library of Congress, will make it nearly impossible for them to stay afloat.
Under the ruling, Web broadcasters will have to start paying each time a listener hears a song, at a rate of 0.08 cent, and increases to 0.19 cents in 2010. The ruling also establishes a $500 minimum payment for each Web channel, making it difficult for companies like RealNetworks and Pandora to offer as many different kinds of music as they do now. As a result, internet radio channels will be asking the Copyright Royalty Board to reconsider the case since, if for some Internet radio operations, the new royalty rates would exceed annual revenue.
Now, I’m no economics major, but I believe that if your expenses exceed your revenue, you might wanna reconsider your business plan…
NYTimes.com: End of Internet Radio