Here’s a CNET editorial that helps explains why the clock is ticking for Independent Webcasters:

But the days of independent radio on the Net could be numbered, say some experts. A recently established royalty fee payable to record companies may price many small content providers out of the market, leaving some with no choice but to shut down.

But the days of independent radio on the Net could be numbered, say some experts. A recently established royalty fee payable to record companies may price many small content providers out of the market, leaving some with no choice but to shut down.

At issue are the royalties Webcasters have to pay for the right to stream songs. Royalties can be broken down into two categories: those paid for the song as it is written by the composer, and those paid for the song as it is interpreted by the recording artist. Terrestrial radio stations are mostly exempt from paying the latter, since they are considered promoters of new music. The Recording Industry Association of America, an organization representing several major record labels, contends that Net radio services are different–since there are ways for listeners to digitally reproduce the music–and should therefore pay the sound recording fees.

In 1998, Congress passed the Digital Millennium Copyright Act, giving record companies the right to collect royalties from Webcasters for the music they play. On June 20 of this year, the U.S. Copyright Office set the rates payable for Webcasters at 70 cents per song heard by 1,000 people. If this decision stands, the first royalties are due in November, and payment of royalties from past years (to 1998) is due in October. Although it is half the rate recommended by a government arbitration panel in February, Webcasters still claim that they will be driven out of business. This is despite the fact that Cary Sherman, president of the RIAA, recently stated that the rate still “does not reflect the fair market value of the music.”