Internet radio's not dead yet

Later this month, new music royalty rates are scheduled to rock the world of internet radio. The rates are calculated in such a way that some online broadcasters say they would have to pay millions, or even billions of dollars in order to stay online.

While Congress is considering action that would change the way royalty rates are calculated, it looks like SoundExchange, the nonprofit acting on behalf of the record labels is willing to offer a compromise.

In a nutshell, the new rates include a minimum $500 payment per channel. That's fine if you've just got a single webstream. But if you're a company like Yahoo! or Pandora that operates by offering each user a customized music stream, you might have to pay $500 for each stream, to the tune of millions of dollars.

SoundExchange is offering to cap the minimum payment at $2500. But the offer's only good through 2008, while the new royalty rates don't expire until 2010. The Digital Media Association, which represents webcasters issued a press release stating that the group would accept the new rates -- but only if they are extended through 2010. And the beat goes on.

Tags: digital media association, DigitalMediaAssociation, internt radio, InterntRadio, last.fm, music, netcaster, pandora, soundexchange, webcaster