Government-Mandated Royalty Hikes Force Live365 Out of Business

Live365: Dead January 31, 2016

Live365 is now preparing to completely shut down at the end of January, thanks to a rise in rates set by US Copyright Royalty Board.

The internet radio streaming platform is blaming the recent webcasting rates for their closure, as they were reliant upon the previously-established, lower rates for small broadcasters.  The new small webcaster rates for 2016-2020 will require a minimum annual payment of $2,000 for webcasters earning less than $50,000 a year.  There is also a $500 annual micro-caster rate schedule for those earning under $5,000 in revenues, lower than $10,000 in expenses, and fewer than 18,000 listener-hours per year.

Live365 was launched in 1999 in California, and an early pioneer in the streaming radio space.  The streaming platform features a wide range of 5,000+ internet radio stations covering various music genres as well as news and talk stations.  “These stations are the hard work of real human beings who use Live365 to share their vision with the world,” said Dean Kattari, director of broadcasting for Live365.

“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”.

After the ruling, Live365 management were reportedly looking for new business partners in order to move forward.  Those efforts proved unsuccessful, and the company quickly lost investors.  The platform has already moved forward with the closure and sources have revealed that the company has already laid off most of its staff.

The management of Live365 said in an email to its members, published by BetaNews, that the service will shut down on January 31st. “We are sad that we are closing our doors at the end of this month,” the company shared.

“There are always possibilities that we can come back in one form or another, but at this point in time, January 31, 2016 is the last day that Live365’s streaming servers and website will be maintained and supported.”

20 Responses

  1. Anonymous

    Pretty much all small internet radio stations are either going to shutdown, move overseas, or take some illegal route and not pay. The new rates are completely impractical for those who stream internet radio as a hobby.

    • Rikki

      well black people dont pay royalties rap hip hop underground mashups they have been doing it for 20 years since the beginning of streaming and mp3 hard drives ebay and before that rhey sold huge sets of cds to dj’s hard to compete with stolen music..

        • Rikki

          black privilege…the RIAA never sued anyone black, so why should soundscan or any other rights organization go after them either……..race is important in the new america today

  2. Rick Shaw

    yeah, it was the government that shut them down…whatever.

  3. BullsEye Radio

    Over 4100 signatures all opposing this corrupt biased criminal action by a panel of 3 ” so called ” judges.
    Keep in mind these judges were NEVER oficially elected to this position, they were appointed by the Copyright Royalty Board and it is shameful they are even allowed to call themselves judges making a decision that ENDS 20,000 businesses across the USA !
    Read the comments from station owners, listeners, and artists as well here :

    http://www.gopetition.com/petitions/opposition-to-copyright-royalty-boards-decision-on-hr-1733.html

    The Copyright Royalty Board has handed down a decision after meeting behind closed doors with Pandora and coming to an agreement in reference to royalty rate increases ( http://www.loc.gov/crb/web-iv/amended-web-iv-terms.pdf ) that literally cripples any small webcaster anywhere in the United States of America !

    In this agreement it states that the rate is $0.17 per 100 songs , per listener , raising rates so high that it makes it unaffordable by any broadcaster anywhere.

    While this bill HR1733 is good to force terrestrial radio to finally pay royalties which they had never done since the beginning of internet broadcasting, the original ” Small Webcaster Settlement Act ” ( SWSA ) has been eliminated making no provision whatsoever for hobbyist broadcasters who have no revenue to pay the outlandish fee’s that would be incurred upon them by the elimination of this agreement.

    It also creates a monopoly which according to US law has been deemed illegal in the United States of America , allowing only major corporations like Pandora and iHeart Radio to control what is being heard on the internet.

    For years, small webcasters have been paying royalty fee’s when terrestrial was not! And as a thank you for all the years of trying to do what was right , to be lawful and pay royalties that artists worldwide have worked so hard for and deserve, the Copyright Royalty Board has decided only the wealthy should be allowed to broadcast, thus ending small broadcasters tiny businesses all over the USA.

    Finally, this bill does not only affect the small broadcaster , but affects many businesses that small webcasters have supported as well thus eliminating literally MILLIONS of dollars of spending in business such as :
    * Streaming Servers
    * Chatrooms and servers
    * Messengers
    * Communities and servers
    * Games
    * Webhosting and servers
    * Banner Hosting services and many other services !

    For years small broadcasters have been paying licensing fee’s to stay legal on the internet, paying dues in appreciation for the hobby they so love. They have all had a dream of one day climbing that ladder to make a name for themselves, to achieve success. Some didn’t have that dream, they just wanted to enjoy what they loved to do. Now that dream has been stomped on, spat on, and kicked to the curb by the very people we entrust to treat us fairly. It’s shameful , unjust and should be considered criminal because of the results of this decision being made.

    It should not be allowed.
    Petition:
    We the undersigned oppose the decision of The Copyright Royalty Board to not include a provision such as the Small Webcaster’s Settlement Act of 2002 which allows for small webcasters to have the ability to pay affordable royalty rate fee’s.

    The rates set are totally unfair to those who do not have the revenue such as the larger broadcasters like Pandora and iHeart.

    We the undersigned ask that a provision be included in this decision so that thousands of small webcasters and their listeners and services they do business with may continue to enjoy the music and environment they have created and not be crippled by the Fair Play , Fair Pay bill , as it is not fair at all!

  4. Tom Jefferson

    Government regulations put in place to eliminate competition from corporations who give huge campaign contributions? You don’t say? Since when does big government lead to crony statism? I am totally shocked.

    You should enjoy the consequences of centralized power my fellow citizens. Now go vote for a Socialist Democrat who wants incredibly heavy regulation or a corporate welfare and warfare economy Republican. I’m sure it won’t take much violence to get the other half of the people to agree with you. Heck we already have more people in jail than any other country, why not just force everyone at gunpoint to obey the laws on voluntary exchange? TJ

  5. Paul Resnikoff

    I’d echo some of the sentiment here, specifically why we need this tribunal in the first place. Just look at Pandora, they’re striking a myriad of independent deals that don’t involve the US Government, and circumventing global licensing issues in this manner (the biggest reason why they’ve been constricted to US and Australian borders). They can do this because technology allows it, platforms exist to manage thousands, even hundreds of thousands of separate rights deals.

    So, why should some three-judge panel decide that Live365 should pay more, when the technology exists to allow direct deals from content owners. Let the content owners kill this company themselves lol.

    • Swing And+A+Miss

      They (Pandora) can strike direct deals because they are now large enough and can afford the monumental task and staff required for managing direct deals with thousand’s of labels. The compulsory license remains in place because it is simply impracticable and unreasonable for small to mid-sized radio stations to direct license. Doing away with the compulsory license would invariably be more detrimental than this royalty rate oversight.

      • Paul Resnikoff

        I’m not sure that’s the right assessment, because there’s not just technology to simplify licensing, there are companies that have packaged that technology into services. Take Music Rights, Inc. for example, or Dubset Media, just two off the top of my head. I think that Live365, on behalf of its member stations, could have created a broad-level licensing service with one of these companies, which individual stations could participate in.

        Actually, there seems to be a lot of groups that don’t want that information to be out there, or, try to confuse it. But there seems to be far less need for governmental involvement in what is ultimately a private transaction, ie, a licensing deal between the operator (station) and rights owner (label, publisher and/or artist). That same applies to PROs (and on that, I’d point you to the recent BMI v. DMX precedent).

    • Please Educate Yourself

      Paul/DMN staff. At issue here is the expiration of the SWA 2009. In a nutshell, the SWA gave authority for third parties (small webcasters and SoundExchange) to do just what you propose– sidestep the statutory rates and negotiate a compromise/special rate for Small Webcasters. This is how the percent of revenue rate was established and allowed thousands of small and mid-sized internet radio stations to survive.

      In essence, without any “exception language” in the decision, all party’s hands are tied. The full text of the decision has yet to be released to the public. Only participants in the Judiciary hearings have access until confidential information is redacted. So far, SoundExchange has remained mute on the issue of the potential and ultimate demise of thousands of independent internet radio stations.

      Surely you do want to leave the heretofore diverse internet radio landscape solely in the hands of corp. conglomerates. Or do you?

  6. Swing And A Miss

    This article glazes over the real meat of the Webcaster story. It’s not simply about Live 365 closing down. And it certainly more than stating minimum royalty rates. What’s missing is historical perspective. Here is the real meat of the issue.

    Since 2009 webcasters with lower revenues have been able to pay rates based upon that income, rather than based on tracks played and audience size. Under the Webmaster Settlement Act of 2009 (WSA) stations with less than $1.25 million in revenue were able to pay a percentage of that in royalties ranging from 12% to 14%. That agreement was made between SoundExchange, which negotiates and collects performance royalties on behalf of copyright owners, and a group of internet radio stations. However, the WSA ended on December 31, 2015 and there is no new agreement to take its place.

    This means that all internet broadcasters that qualified for revenue-based royalties in 2015 will now have to pay based upon the number of performances. This is calculated based upon the number of tracks played multiplied by the number of listeners to each track, which is then multiplied by the rate of $.0017 per performance. So, if a station averages just 100 listeners at any given time and plays an average of 15 tracks an hour, then it has 1500 performances an hour, 36,000 per day, and 13,140,000 performances a year. This adds up to a royalty of $22,338 a year. —> Not $2,000. Average 1,000 listeners and you’re pushing over $200,000/yr. in royalties alone.

  7. Smooth

    This is a loss for Independent music artists, who will lose a valuable promotion for their life’s work. The only winners here are corporate radio and corporate record companies.

    Get ready for more Justin Beiber 24/7!

  8. Richard

    The independent radio web cast is dead! Now we’re at the mercy of the corporate radio fiends! How are we going to hear new music now? Damn the CRB and Sound Exchange to Hell, along with IHeart, CBS, Cumulus, Greater Media and Radio One!

    • rikki

      again this will not affect black people who never got sued by the RIAA or never paid royalties in the first place.

      • Alexa

        Hello, rikki I wish you would stop being racist jokes. Also, if you want to play the race card. Back in the day, poor black people did’nt even have money to copyright there music and the white man stole theirs songs and made money off of it.

        So we don’t you so something about that. Also Live365 had black broadcasters too who paid royalties. Why don’t you stop worrying your pretty little head about black people and worry about yourself?

  9. postbush

    I paid my annual fee in December. Does anyone know how to get my money back?

    • Ken

      Something tells me we will have to launch a class action suit to get our refunds back, since there is apparently nobody at the office in Foster City, California. There is also no way to log into our accounts, since the website no longer functions and all of the links/buttons are dead.

      • Ken

        The individuals who ran Live 365 will have to be tracked down and prosecuted for theft and sued by us.