Internet Radio has been the subject of some controversy over the past few years, internet radio services such as Last.fm and Blip.fm were on the borderline of becoming dinosaurs early in the game due to the royalty fees for music copyright holders that were imposed on them back in 2007 that were on the verge of increasing more than 100% now. Its been a battle for close to two years but it looks as though there is a deal in place that will keep the internet radio flowing.
Now most of these internet radio stations have high margins and more pureplay time due to the relatively low overhead compared to tradtional radio stations that you would tune into on the radio or Sirius Satellite Radio. Now the revenue stream is much different as traditional radio still has to have an abundance of sponsors to keep the doors open, while Internet Radio can stay afloat with subscriptions or even minimal advertising dollars.
But based on reports it seems as though the royalty fees were not increased but rather decreased by 40% it still looks like the Internet Radio companies are getting a raw deal and getting hit a tad bit harder than their tradtional radio counterparts. The huge royalty fees imposed have not hit the likes of Sirius but if this should be the case I am sure that it would make for an interesting battle. [source]