Hype Machine Radio Is Live | Will it Be Hurt By Internet Radio Royalty Hikes?

Yesterday, Fred Wilson pointed out that everyone’s favorite mp3 blog aggregator, the Hype Machine, has created a legal streaming service (powerred by LoudCity), allowing Hype Machiners the ability to stream tunes that are featured on the site. I meant to make a brief mention of this, as it seemed like the Hype Machine was making a move towards a more legitimate service, basically allowing a third-party to deal with licensing and streaming of the tracks on the site.

It also gives users the ability to chat about the songs as they listen. But beyond the chatting feature, I’m not exactly sure how “Hype Radio” is all that different than the “pop-up flash player” option that Hype Machine still allows. I suppose it could eventually replace the flash player? Either way, it’s great to see the Hype Machine making some changes. Perhaps this is part of that whole “Hype Machine 2.0” thing we heard about a few weeks ago?

So that was pretty much my post until I caught the news about a decision by the Copyright Royalty Board. Next.Net has a good run-down no the issue, explaining:

Small Internet radio stations and startups who rely on cheap music streaming may be put out of business by a decision of the Copyright Royalty Board upholding an earlier ruling that would nearly triple the royalty rates on music streamed over the Web.

Although I try not to jump into every over-hyped “cause” without thoroughly looking at the other side’s argument. But after a few decent reads, I really think the smaller broadcasters and Internet radio stations have some good points. They’ve banded together to form the “Save Net Radio” coalition, and will be making a last-chance attempt at an appeal to the Board’s decicion.

The question that I have is whether this decision — if it goes into effect — will really hurt the fledgling web radio stations like this new Hype Radio? Will they be able to afford the higher royalty rates? Will they be less affected because the music they’re streaming is more independent and under the radar?