As webcasters are scrambling to position themselves in case a proposed hike in webcasting royalty fees materializes, most of them agree that boosting ad revenue might not be enough to offset an increase in rates. They say the proposed rate hikes could be the end of internet radio, and adding more ads or charging more for existing spots to help mitigate the rate hikes only puts the medium's future on even shakier ground, ClickZ writes.

"The royalty decision assumes we can increase the advertising per user, per hour, by two and a half to three times, and that's just a wildly unrealistic assumption," explains Joe Kennedy, CEO of music service Pandora.

The higher rates would have a dramatic affect on many internet radio stations. For example, internet radio station AccuRadio earned $400,000 in revenues in 2006 but would actually owe $600,000 in royalty fees if the Copyright Royalty Board ruling stands, according to VP of Music Programming Paul Maloney.

"The advertising reality is just not there. It does not add up," he said.