You probably remember the outcries from Netcasters big and small when new copyright royalty rates were announced earlier this year – rates that amounted to increases of over 300 percent for some Internet radio companies.

The reason for the increased rates had to do with how royalties are calculated. Previously, royalty rates were calculated on a percentage of revenue derived from advertising. However, the new rates are based upon the number of times each song is played, often resulting in rate increases that could easily outdistance a company’s yearly revenue.

While most protests against the new rates came from small Internet radio services, it now looks as if the big boys are also hurting from the new fees.

AOL and Yahoo are considering shutting down their radio services, citing a 38 percent royalty rate increase making it difficult, if not impossible, to derive any profits, reports Bloomberg.

“We’re not going to stay in the business if cost is more than we make long term,” Yahoo’s radio division GM Ian Rogers said in an interview quoted by Bloomberg.

AOL and Yahoo stopped directing traffic to their radio operations last July, with the latter promoting videos and songs for sale instead of its Internet radio service.

But loss of income isn’t limited to the major companies. Small outfits, like, are also losing money.

It’s no secret the record labels have lost millions in the past few years. While the recording industry attributes peer-to-peer file-sharing as the major reason for its financial woes, factors such as CD prices and other entertainment opportunities available to consumers have also affected the recording industry’s revenue stream. It’s a money stream the labels are anxious, if not desperate, to replace.

Under the new rates, Internet radio stations pay a retroactive fee based upon .08 of a cent per song per play for last year, .11 of a cent per song per play this year and .19 of a cent per song per play in 2010.

If this sounds reasonable, remember that, unlike terrestrial radio stations where only one song is played at any given time, Internet radio sends individual streams to its listeners. That means hundreds, if not thousands, of songs are individually streamed to listeners at any given moment.

“The current math doesn’t add up,” said AOL’s managing director of radio, Lisa Namerow. “If the rates remain as they are, it would be very challenging to sustain a business that is profitable.”

Although companies like AOL and Yahoo are considered examples of big business, with net incomes often cited as just under $1 billion per year, neither company is apt to continue running a service that loses money. And if neither company’s radio service can justify its existence by generating black ink, it’s a sure bet those companies will replace those services with something that can make a buck.

Or, as founder Tim Westergren said in the Bloomberg piece:

“At the new rates we’re losing tons of money. If we don’t think there’s a real answer that’s going to happen, it’s our fiduciary responsibility to stop.”