It sneaked in past the holidays and headlines about more important matters, and it satisfied neither side of the battle over how much, or little, musicians get paid for the broadcasting of their work, but it may spell the end for thousands of small, independent, online radio stations.

“It” is the ruling by the Copyright Royalty Board, issued in mid-December and effective Jan. 1, mandating new royalty rates to be paid to copyright holders for the next five years. It was bad news for small commercial webcasters who’d been paying a percentage of their revenue, which often was minuscule, or a flat license fee of $2,000. The royalty board (made up of three judges appointed by the Librarian of Congress), scratched that revenue model and threw the small operations into the pool occupied by such music-streaming giants as Spotify and Pandora. All stations and sites will be required to pay per performance, with rates varying depending on the kind of streaming, and adjusted according to the Consumer Price Index.

For small broadcasters, said Dennis Constantine, who’s worked on commercial and online radio, payments could go from $2,000 a year to more than that amount per month.

The impact was immediate. Live365, the Foster City company that, since 1999, has been home to 5,000 online stations, ranging from single DJs to commercial operations, and which covered licensing and royalty fees for its broadcasters, was rumored to be heading for bankruptcy. I had heard that 50 of 55 employees had been dismissed, that the offices were shut down, and that Live365’s stations would fall silent on New Year’s Day.

That didn’t happen. (As I noted in a recent column, I created and program a station, Moonalice Radio, that is a client.) But on Dec. 29, Live365 didn’t mince words, saying the new rates are “prohibitively expensive for many small to mid-sized Internet broadcasters,” and that the company had “hard decisions to make” regarding those under the Live365 umbrella. Beyond — or perhaps because of — the CRB ruling, Live365 said it lost major investors and had to reduce its staff. The company says that CEO N. Mark Lam is looking for new venture capital. If he fails, Live365 will suspend operations at month’s end. Dean Kattari, director of broadcasting, said Live365 has been “the home for musical discovery because many of these stations play emerging artists that terrestrial stations are reluctant to take a chance on. It would be a great loss for this to all go away.”

Among those stations — 30,000 around the country — are Chilltrax and PreDanz, operated by former KKSF DJ and satellite radio programmer Blake Lawrence. When he got the news about the royalty rates and policies, he wrote: “To quote John Kerry after Paris: ‘I’m shocked, but not surprised.’ … The story of the small webcaster is not over yet. It really depends on how much listeners value the wide variety offered by us little guys ... and whether they'll make a stink or be content to switch to iHeart or Pandora.” Lawrence said he is hopeful “that some sort of coalition will emerge to turn SoundExchange’s heads around.”

SoundExchange is the organization that collects royalties for musical and other works on digital media and distributes payments to copyright holders, ranging from musicians to record labels. While broadcasters, small and large, have argued that playing artists’ music gives them valuable exposure, SoundExchange did not sound as if its head would be turned around any time soon. It had sought an increase in royalty rates to a quarter of a penny per 100 plays (0.25 cent) and got between 0.17 and 0.22. Upon receiving the royalty board’s ruling, it expressed its displeasure, saying that “the rates ... do not reflect a market price for music and will erode the value of music in our economy.”

Rich Varrasso, a musician, producer and operator of an online station (Famous Hits Live), worked, until recently, at Live365, and sees both sides. “From an artist’s point of view,” he said, the ruling “puts a crimp into getting airplay for artists who can’t really get airplay, or any Bay Area band that isn’t Journey. It adds another level of complication for discovering new music.” Smaller broadcasters, he feared, might “become pirates and not comply, because it’s so hard to comply.”

Varrasso’s former colleague at Live365, Constantine, agreed, noting that the largest streaming companies saw their rates remain the same — or even lowered. “The big guys got the breaks,” he said. “The little guys got screwed.” Constantine said he hopes that Congress will step in “and say, ‘We’ve got to keep the little voices on.’”

And what of my free-form station for the rock band Moonalice? We remain on Live365, but I am, as they say, exploring all options. Check in at www.moonalice.com or the band’s Facebook page for the latest.

Ratings: KOIT (96.5) got its annual present from Santa, as its all-holiday music format, starting around Thanksgiving, gave it a ratings boost, to second place for the Nielsen Audio numbers through mid-December. KCBS continues to top the market, with a 6.0 percent share of listeners, followed by KOIT (5.7), KQED (way up, from 4.4 in November to 5.6), KIOI (Star 101.3) at 4.1, KLLC (Alice), 4.0, KNBR (3.9), KMEL (3.8), KMVQ (Now) and KYLD (Wild) knotted at 3.4, and KBRG (3.1).

Outside the top 10, it’s KBLX at 3.0 (way up from 2.4 in October), KSAN, 2.9 (also up from a 2.4 before Halloween), KSOL (2.7, up from 2.3), KRBQ (Q102) at 2.6, down from a surprising 3.7 in October, KISQ (Kiss), 2.4, KOSF (Big 103.7), 2.2, from a much bigger 3.0 two months ago. Also at 2.2: KSFO, followed by KFOG, 2.1, KGO, 2.0 (up from 1.7 in November) and KITS (Live 105), 2.0.

KGMZ (The Game) is at 1.9, KDFC, 1.8, and KKSF, 0.6, good (or bad) for 30th place.

But, as Lee Hammer, program director at KNBR, noted, not one advertiser buys based on these overall ratings, which cover all listeners ages 6 and older, at all times. It’s all about demographics, and the ratings hinge on a ridiculously low sample size, of about 2,500 participants in Nielsen’s meter program, representing 7.5 million listeners in the Bay Area. If a handful of loyal listeners in KNBR’s target demographic (adult men) were to, say, go out of town, the station’s numbers could take a beating. So, as I’ve advised since I began writing this column in the mid-’80s, take these numbers with a grain of ... whatever.

Ben Fong-Torres is a freelance writer.