Live 365 On Life Support – Is This What SoundExchange Wanted?

Two weeks ago we suggested doom for small webcasters when the Copyright Royalty Board released its new rates. And now it has begun — Live 365 announces layoffs; cuts streams as investors bail…

Live 365 logoBy Paul Marszalek
TheTop22.com

On December 16, the Copyright Royalty Board (CRB) released the new royalty rates for streaming music.

The new 5-year rule making came as something of an “everybody loses” decision — there was a small uptick in rates for the Pandoras and Spotifys of the world, which still struggle to find profitability. But those new rates were nowhere near what SoundExchange, the representative for the labels and artists, wanted. So those groups will continue to struggle with profitability too.

But the biggest losers were the little guys, and if I were one to wear a tin foil hat, I’d be wondering if the fix was in.

In releasing the new rates, the CRB completely eliminated a provision for small webcasters that allowed them to pay a percentage of income versus the statutory rate per song played. We wrote that this change could wipe out perhaps thousands of small specialty players and hobbyists.

And the CRB changed the game with just two weeks to go on the current agreement. Happy Holidays!

As someone who has personal experience as a small webcaster (I helped run a blues site and stream for years), I’ve always been skeptical of the economics — it just never worked, even under the small webcaster model. Among the worst parts, however, was the amount of time we had to sink into the reporting to SoundExchange. From the start, the system was built to serve big guys who could just crunch and deliver metadata from their servers. Many of the little guys were doing it by hand, or worse, making estimates or not reporting at all.

It’s this piece of the puzzle that has me putting on my tin foil hat. If reporting streaming play every month was a nightmare for me, it had to be absolutely overwhelming for SoundExchange — having to deal with thousands of two-bit players.

With constant pressure for more transparency and accuracy, the little guys had to be a migraine.

The question is, were small webcasters so much of a migraine that they were put on the negotiating table for elimination? Everyone had to be desperate for a simpler solution to reporting streaming play and tracking revenue — but even if it meant destroying the mom-and-pops? Wouldn’t surprise me for a second.

Live 365 has laid of virtually all staff and abandoned their offices. When the CRB decision came down, investors pulled out.

Live 365’s streams coming from “personal” accounts will cease tonight. “Pro” accounts will stream through January.

A letter from Live 365 dated December 30, 2015:

Dear Live365 Listener,

For 17 years, Live365 has offered small webcasters the opportunity to stream music and talk programming, providing an alternative distribution channel for diverse, quality content on the Internet in a legally responsible way.

Recently, the Copyright Royalty Board, the governing entity for establishing the sound recording royalty rates that are paid to copyright holders, has published the new rates for 2016-20. The previous provisions for small webcasters to opt for a percentage of revenue model were not renewed.

The current provisions end at the end of 2015. The absence of this license will make legally streaming copyrighted musical content prohibitively expensive for many small to mid-sized Internet broadcasters. Live365 relies on this license for many of their broadcast partners and, as such, has hard decisions to make regarding their future in the streaming industry.

Two weeks ago, Live365 faced an additional blow, losing the support of its investors who have helped the company with its mission for over a decade.

The company was forced to significantly reduce staff and is now actively looking for partners to help continue the service into 2016. At this time, Live365 is planning to keep their stations active while getting the word out about this investment opportunity. With nearly two decades of Internet streaming experience and thousands of paying customers, this could be an ideal situation for a company looking to diversify into streaming audio.

CEO N. Mark Lam has begun initial discussions with possible business partners as the company looks to new options in the new year.

Dean Kattari, Director of Broadcasting for Live365:

“The true value of Live365 lies in it’s diversity of content – it’s a sanctuary where you can hear music and other content that it so unlike the template broadcasting that is heard on most terrestrial radio. These stations are the hard work of real human beings who use Live365 to share their vision with the world. It’s a 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.”

While Live365 is going through this process, we understand that our listeners will have questions about how all of this will affect their service so we have provided a simple FAQ section to help answer some of them.

We thank you for being part of the Live365 family and hope for the best in 2016.
Rock on,
The Last of the Live365ers

Filed Under: Actual NewsFeaturedLinkageNewsRadio and RecordsSideways Is the New Up

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  1. John Michaels says:

    Small webcasters all over the USA aree banding together against this ! It is wrong ! It is a blatant violation of what America stands for !

    If this lopsided biased ruling stays without a provision for the small webcaster , then that is what is called a monopoly , only giving the RICH corporate companies control over what small webcasters have been paying for , for 15 years !

    Last time I checked , monopolies in USA were Illegal ! But will they get charged for that ? Of course not ! They will BUY their way out of it ! and in the meantime the little guys get screwed !

    Well get ready ! This war has JUST begun !
    Pandora and the CRB , the bed buddies will soon feel the effects of their ruling for the rich from webcasters all over the USA ! Copyright Royalty Board needs to be eliminated ! The Artists dont get a quarter of what the CRB says that they do ! They are liars ! Their lining their own pockets and it is time for them to exit this industry ! Do away with the music Mafia !

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