Online radio stations strike big deal on royalties

The future of Internet radio appears more secure after a handful of online stations reached an agreement Tuesday to head off a potentially crippling increase in copyright royalty rates. The deal is the product of two years of negotiations between webcasters and copyright holders. In March 2007, a ruling by the federal Copyright Royalty Board dramatically raised the rates that Internet radio stations must pay artists and recording labels — leading many online radio stations to warn that the new rates would put them out of business by eating up as much as 70 percent of revenue. At least one popular online radio service — Pandora Media, which derives much of its revenue from advertising — said the new agreement will help ensure its survival.