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New Royalty Schedule May Scuttle Independent Internet Radio

BridgeRatings, a company that provided an additional analysis, estimates that in 2006 almost 56.7 million listeners listed to online radio streams each week. While this is lower than the 279.6 million listeners of AM and FM radio, the growth rate for traditional radio is expected to hover around 1% per year, while the internet radio listener base is expected to grow at about 27% per year to a projected 147.5 million listeners per week for streaming radio.

While those numbers are impressive, and the biggest royalty rates will go to the largest online radio services, it's the little guys that will get hurt the most. Erick Murtland, owner of Hot Wired Radio, sent media outlets an email about this topic. While his reaction could be labeled "over the top," it's this kind of reaction that's leading many in the online radio space to choose to stand and fight.

"I'm the owner of a small Internet radio station called Hot Wired Radio," wrote Murtland. "I'm writing this as a concerned station owner looking for media help and support. On March 2, 2007 the Copyright Royalties Board (CRB) pushed through legislation that raises the royalty rates for online stations so high that it means certain death for ALL Internet radio stations from the small to the very large like Yahoo Radio and AOL Radio. [It plans to] make this legislation retroactive back to the beginning of 2006, therefore crushing any hope of online radio survival. . . . We, as online broadcasters and listeners in general, need help getting the word out and informing the general public of the issues facing the industry that they enjoy everyday. I'm afraid this may be the beginning of a slippery slope leading towards the destruction of online radio, pod-casting, and possibly even the restriction on iPods and other MP3 transport methods".

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