Surprise: Internet Radio May Be Saved

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The groups, which represent record labels, music publishers, songwriters, and music Web sites, say their proposal would resolve what has been a source of strife between the music industry and Web sites that offer on-demand streaming services.

Under the agreement, sites like Napster and Imeem would have to begin paying royalties of about 10.5 percent of revenue. Download services like Amazon MP3 and iTunes already pay such fees. And online radio sites saw a major royalty hike last year. Pandora, one such site, may be on the brink of going out of business due to that rate increase, according to its founder, Tim Westergren.

The organizations involved were the Digital Media Association, the Nashville Songwriters Association International, the National Music Publishers Association, Recording Industry Association of America, and the Songwriters Guild of America.