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Live365 to close because of SoundExchange rate changes

By | Published on Monday 25 January 2016


The long-standing US-based online radio platform Live365 is set to go offline at the end of the month, in no small part because of the recent Copyright Royalty Board ruling on what rates online radio operations licensed via SoundExchange should pay.

As previously reported, the CRB ruling was big news in the US, though most headlines centred on what it meant for Pandora, which has traditionally utilised the compulsory sound recordings licence that exists under US copyright law for online radio services, including personalised radio set-ups.

The CRB controls what rates companies using the compulsory licence – which is administered by SoundExchange – pay, and for Pandora the ruling meant a higher rate, though not as high as the record industry had been pushing for. Pandora was pleased with the latest changes, but small to middle-sized online radio outfits were not, because a revenue share option that had previously been available to grass roots operators was phased out.

Live365, which launched way back in 1999, provides a platform for bedroom, smallscale and community broadcasters based in the US via which they can webcast. It not only provides the webcasting technology for its broadcasting customers, but also music licences, which it sorts out via the music publishing sector’s collecting societies and, for recordings, under the SoundExchange licence.

Shortly after the CRB ruling, the company laid off staff and left its offices, explaining that: “The absence of the [smallscale broadcaster] licence will make legally streaming copyrighted musical content prohibitively expensive for many small to mid-sized internet broadcasters. Live365 relies on this licence for many of their broadcast partners”.

Meanwhile, the firm’s Dean Kattari argued that this development was bad news for the record industry that was the beneficiary of the higher royalties. He said: “The true value of Live365 lies in its diversity of content – it’s a sanctuary where you can hear music and other content that is 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”.

To make matters worse, Live365 also lost investors in the wake of the CRB ruling. At the time management said that they were trying to find new business partners to help them move forward, but it seems that search has been unsuccessful.

According to RAIN, a recent email to webcasters who use the Live365 platform reads: “We are sad that we are closing our doors at the end of this month. There are always possibilities that we can come back in one form or another, but at this point in time, 31 Jan 2016 is the last day that Live365’s streaming servers and website will be maintained and supported”.

It’s thought that many of the grassroots webcasters that rely on Live365 will struggle to find alternative ways to legally webcast given the removal of the special SoundExchange licence for small-scale operations. They will therefore be hoping Live365 can indeed “come back in one form or another”, though that seems far from assured for now.