«(...) nightmare scenario painted by many Internet radio companies who have claimed that the royalty hike would kill online broadcasting in its cradle. In fact, Internet radio is far from dead. Online broadcasters like Pandora and Live365 still serve millions of listeners. But the higher rates have driven away many small online broadcasters who say they can't afford to stay in business. And even industry leader Pandora says it's in trouble. "We're at the very end of our tether," founder Tim Westergren said. "There's a very good chance that we will shut down."

Critics of the royalty system say the result is decreasing musical diversity on the Internet. They warn of an online music industry dominated by the same giant media companies that presently dominate traditional radio broadcasting. And they point to CBS Broadcasting Inc.'s recent takeover of the Internet radio operations of Time Warner Inc.'s AOL as a harbinger of an Internet radio market rendered bland and predictable.

"They'll push all of us out of business," said Johnie Floater, general manager of media for Live365. "Your Internet radio is going to sound like your AM and FM."

Thousands of Internet broadcasters, ranging from traditional radio stations to individuals who want to share their favorite tunes with the world, pay Live365 to stream their programs over the Internet. Live365 pays their music royalties out of the fees paid by its subscribers.»Internet radio firms say royalties limiting choices By Hiawatha Bray Globe Staff / March 14, 2008