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Live 365 lays off most staff due to new royalty rates and investors pulling support


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Old 01-01-2016, 15:02
MikeBr
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Lots of webcasters facing an uncertain future

"Thousands of webcasters are bearing an uncertain holiday season, their businesses threatened by the imminent expiration of legislation which provided below-market royalty rates. Internet radio hosting platform Live365, one of the most venerable brands in this industry, is affected by shifting regulations that change the cost of music on January. In addition, the company’s investors have pulled support from the company, forcing an immediate financial crisis. RAIN News has learned that as a result, nearly the entire staff was laid off this week. The company vacated its office space, and the few remaining personnel are working from their homes.

The company is publicly appealing for investment funding."

Full article
http://rainnews.com/live365-suffers-...acates-office/
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Old 01-01-2016, 15:53
soulboy22
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I had an email from Digitally Imported, it seems they are also affected by the change in regulations and may stop their free service.
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Old 01-01-2016, 16:37
david16
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Hope this is not the death knell to all but the big London based uk national commercial stations who may have only a few local hours each day, and the BBC.
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Old 01-01-2016, 16:40
hanssolo
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Affects the US
The ruling which was released earlier this week, calls for free music companies like Pandora to pay 17 cents per 100 plays of a song, a number which is up from the current 14 cents they now pay. The price will remain set at 17 cents through 2020. This new rate will also apply to traditional radio platforms like iHeartRadio, who have been paying 25 cents per 100 plays.

Read more: http://www.digitaljournal.com/a-and-...#ixzz3w0kpTbp0
Also affects small US internet stations who will need more ads to increase their income.
Spotify and Apple music (Beats) have their own deals.
UK based internet stations also have a different PRS deal.
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Old 01-01-2016, 16:42
omnidirectional
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I had an email from Digitally Imported, it seems they are also affected by the change in regulations and may stop their free service.
Yes, I got that email too. This seems to be bad news for US based online broadcasters. Hopefully a compromise can be found.
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Old 01-01-2016, 16:47
david16
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Lots of webcasters facing an uncertain future

"Thousands of webcasters are bearing an uncertain holiday season, their businesses threatened by the imminent expiration of legislation which provided below-market royalty rates. Internet radio hosting platform Live365, one of the most venerable brands in this industry, is affected by shifting regulations that change the cost of music on January. In addition, the company’s investors have pulled support from the company, forcing an immediate financial crisis. RAIN News has learned that as a result, nearly the entire staff was laid off this week. The company vacated its office space, and the few remaining personnel are working from their homes.

The company is publicly appealing for investment funding."

Full article
http://rainnews.com/live365-suffers-...acates-office/
Are the true ilr’s that still exist and community broadcasters on FM in danger of closure, or being forced to sell to a Bauer or Global in the case of the remaining true ilr’s to still be on air at present?
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Old 01-01-2016, 16:55
Resonance
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Can't they just use a server outside the US to get around it?
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Old 01-01-2016, 17:18
hanssolo
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Can't they just use a server outside the US to get around it?
UK rates seem to be £129 per 45,000 streamed songs for small internet stations, not sure how this compares to the new US rate? (needs some maths). Other countries have other rates, but have reciprocal arrangements so can get complicated.
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Old 01-01-2016, 17:28
hanssolo
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I think the UK current costs work out at about 20 cents per 100 streamed songs, so if my maths is right, a little bit higher than the new US rates?
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Old 01-01-2016, 17:46
voltore
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Right now as of today, UK rates are cheaper than US. If you take into account SESAC/ASCAP/BMI and the new SoundExchange rates it has skyrocketed for "small webcasters".

Up until yesterday, Live365 and many others were covered by the Small Webcasters Act which based the SoundExchange rates on a % of revenue/expenditure. Also ASCAP now want a rate per station, no longer aggregated. SoundExchange now only can offer commercial webcasters a rate of $0.0017 per performance. Soon adds up.

They're all hoping some form of negotiated settlement can happen in January but more may fall by the wayside. Time will tell!
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Old 01-01-2016, 18:16
zing
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Maybe they should change the name now?
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Old 01-01-2016, 19:27
TUC
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UK rates seem to be £129 per 45,000 streamed songs for small internet stations, not sure how this compares to the new US rate? (needs some maths).
By my calculations the above equates to 42 cents per 100 plays.
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Old 01-01-2016, 20:34
ex pirat
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Can't they just use a server outside the US to get around it?
I guess someone will set up something similar to live 365 outside the US with some sort of reciprocal agreement for royatees ?.
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Old 01-01-2016, 20:36
spanners
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Affects the US

Also affects small US internet stations who will need more ads to increase their income.
Spotify and Apple music (Beats) have their own deals.
UK based internet stations also have a different PRS deal.
Rdio went bust a few days ago - $220 million in debt! Strangely Pandora picked up selective assets for $75 million, which shows that there is still some spare cash around in the music streaming industry.
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Old 02-01-2016, 01:06
voltore
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Can't they just use a server outside the US to get around it?
Forgot to mention earlier, location of server is immaterial to this, it's the location of the listener that counts. Live 365 was targeted at US listeners!
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Old 02-01-2016, 10:43
Colin_London
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It strikes me that the US Internet Radio ecosystem must have been buoyed by artificially low royalty rates such that an increase to below what we pay in the UK should cause such devastation.

Whilst the US is the home of entrepreneurship and there is much wailing & gnashing of teeth about this, the artists (who have a better argument for making a living out of their own music than the internet hobbyists) must not be forgotten.

I see this as a necessary correction in what appeared to be an unfair relationship. It's no longer the case that 'airplay sells records' - it's almost the opposite nowadays with people not buying records because they can hear it free online. If these internet stations can't turn a profit whilst recompensing the artists adequately then they don't have a business plan.
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Old 02-01-2016, 13:27
voltore
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It strikes me that the US Internet Radio ecosystem must have been buoyed by artificially low royalty rates such that an increase to below what we pay in the UK should cause such devastation.
I believe you are misinformed. I run a station in the US and it's likely to end this month, depending on negotiations. One thing PRS/PPL offer is a tiered pricing mechanism. Small stations with low Listener Hours (TLH) and/or low revenue get breaks on pricing. With the new structure SoundExchange have no tiers now. Small station (hobby), small AM/FM radio station, Major Market station (NY etc) and Pandora all pay the same rates for streaming. ASCAP now is based on TLH as well per channel, used to be able to aggregate them.

For example, if I ran a small station, say 10,000 hours TLH/month (not a lot), UK royalties would be around £150 ($225), in the US, combined royalties would be approx $400 per month. That station may have previously paid $50/mo. There are no breaks for low revenue/small webcasters. Now you can see why a lot have collapsed.
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Old 02-01-2016, 14:02
Colin_London
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I believe you are misinformed. I run a station in the US and it's likely to end this month, depending on negotiations. One thing PRS/PPL offer is a tiered pricing mechanism. Small stations with low Listener Hours (TLH) and/or low revenue get breaks on pricing. With the new structure SoundExchange have no tiers now. Small station (hobby), small AM/FM radio station, Major Market station (NY etc) and Pandora all pay the same rates for streaming. ASCAP now is based on TLH as well per channel, used to be able to aggregate them.

For example, if I ran a small station, say 10,000 hours TLH/month (not a lot), UK royalties would be around £150 ($225), in the US, combined royalties would be approx $400 per month. That station may have previously paid $50/mo. There are no breaks for low revenue/small webcasters. Now you can see why a lot have collapsed.
Hmmm - this article suggests 'microcasters' should be unaffected - although I can't tell whether the $500 quoted is per month or per annum.

http://www.hypebot.com/hypebot/2015/...-decision.html

EDIT: The article is wrong - SoundExchange are eliminating the Microcaster category w.e.f. this year 2016. http://www.soundexchange.com/service...r/microcaster/ however the Standard Minimum Fee in the new category of Commercial Webcaster (crb) is a minimum $500 per year http://www.soundexchange.com/service...webcaster-crb/ which means the smallest webcasters are only paying $41.66 a month even under the new regieme.
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Old 02-01-2016, 15:00
voltore
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EDIT: The article is wrong - SoundExchange are eliminating the Microcaster category w.e.f. this year 2016. http://www.soundexchange.com/service...r/microcaster/ however the Standard Minimum Fee in the new category of Commercial Webcaster (crb) is a minimum $500 per year http://www.soundexchange.com/service...webcaster-crb/ which means the smallest webcasters are only paying $41.66 a month even under the new regieme.
Yes, that is a minimum which the 0.0017 comes out of. ASCAP/SESCA/BMI has a minimum of around $1,100 per year combined.
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Old 02-01-2016, 17:58
david1956
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dd
Forgot to mention earlier, location of server is immaterial to this, it's the location of the listener that counts. Live 365 was targeted at US listeners!
How does this work if the station is operated from outside the USA. If for example the station was based in Canada but most of the listeners were in the US, how could the US authorities enforce the law upon a foreign operated setup?
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Old 02-01-2016, 22:01
voltore
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How does this work if the station is operated from outside the USA. If for example the station was based in Canada but most of the listeners were in the US, how could the US authorities enforce the law upon a foreign operated setup?
That is the unknown question. We do know that one of the UK licensing groups (not sure which one) sent letters to the big US radio groups demanding stats and payments for their streams that UK listeners were using and they geo-blocked pretty quickly. A lot of the big royalty groups have representation in other countries so technically they could sue locally.

It depends if someone does get sued and whether they have the means/will/cash to counter it. I suspect a cease and desist will just do the trick to most operators. "Battles worth fighting and all that!".

I do know that SOCAN (Canada) threatened a few operators in the US a few years back so a few do pay SOCAN now!

Very little reciprocality sadly
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Old 03-01-2016, 18:26
AEC2600
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I would love to know where all these agencies get the money to run around looking for payments from foreign internet stations for their countries listeners and all the other amount of activities they do? They are hardly volunteers. How are these agencies appointed? via the state or they just take it upon themselves? How much does the artist actually get from royalties collected? I can't understand why, once royalties are being paid in the country of origine that any more should be payed for foreign listeners. Its ridiculous tbh.
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Old 04-01-2016, 19:43
Nick_G
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Hopefully just a coincidence but Canadian college station CKUT's web stream has been off for the last 2 or 3 days. I have messaged them via Facebook and email but no responses from them as yet.

These changes don't affect Canadian stations do they?
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Old 05-01-2016, 12:33
ex pirat
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Are there other companies providing the same sort of service as live365 ? Maybe in uk or europe ?.
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Old 05-01-2016, 14:28
dave2702
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I would love to know where all these agencies get the money to run around looking for payments from foreign internet stations for their countries listeners and all the other amount of activities they do? They are hardly volunteers. How are these agencies appointed? via the state or they just take it upon themselves? How much does the artist actually get from royalties collected? I can't understand why, once royalties are being paid in the country of origine that any more should be payed for foreign listeners. Its ridiculous tbh.
Usually set up by the recording industry of that particular zone, they receive their funding by taking a share of the revenue they collect

Way back in '98 U2 were suing the UK's PRS over the amount they charged

https://books.google.com/books?id=mQ...%20PRS&f=false
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