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The U.S. Copyright Royalty Board, which is a U.S. Congress-established agency, ruled on March 5, 2007, that any website streaming music must pay much higher royalty rates that they pay at present. Webcasters say the ruling could put them out of business or push them underground. All Internet radio broadcasters, regardless of size, who have a U.S. audience, are affected. The webcasters have allied to describe what they see as a drastic future, and they are hoping that Congress will take action or that record labels will be open to negotiation. The record labels, through the SoundExchange organization, have been upfront in saying that webcasters should pay fairly for music. The Digital Media Association and other webcasters say they will appeal the ruling, but a settlement cannot be ruled out. Many hope that new terms can become a starting point for new talks, says Mike McGuire of Gartner. According to one industry insider, the record labels might benefit from dealing, since webcasters introduce listeners to new music. If the rules do take effect, analysts say smaller, online-only, music-only stations will be most hurt. The ruling also has the potential to prompt creation of new business models, but pirate music is also a very strong possibility.
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