Bloomberg’s reporting that AOL and Yahoo may pull the plug entirely on their web radio. Why ? A 38% increase in royalties to air music.

Yahoo and AOL stopped directing users to their radio sites after SoundExchange, the Washington-based group representing artists and record labels, began collecting the higher fees in July. Those royalties may stifle the growth of Internet radio, which increased listeners 39 percent in the past year, according to researcher ComScore Inc. in Reston, Virginia. full story here

The wheels started coming off the bus back in March when the copyright board brought in pay-for-play fees based on recommendations by record companies.

If more internet radio stations follow suite, the people who’ll be hurt the most are the artists themselves as they watch their online exposure dwindle.

Now that makes sense.