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Live365 and the importance of the revenue percentage option

live365 logoLive365 has sounded the alarm regarding the Copyright Royalty Board’s latest proposed copyright royalty rate schedule. Layoffs and worse are in the offering. The CRB’s latest tithes:

(1) Commercial Webcasters: $0.0022 per performance for subscription services and $0.0017 per performance for nonsubscription services.

(2) Noncommercial Webcasters: $500 per year for each channel or station and $ 0.0017 per performance for all digital audio transmissions in excess of 159,140 ATH in a month on a channel or station.

The problem, as Live365 has noted in the press release we received, is that the new royalty rates do not offer webcasters the option of paying a percentage of their revenue, as have earlier arrangements. I am not a webcaster, but I can understand why the revenue percentage model could be attractive. It can be more predictable than a pay-by-play arrangement.

Here’s an excerpt from the Live365 statement:

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.

But, the company adds at the end of the release: “Basically, Live365 may not be able to continue service for our broadcasters after January 31, 2016; so streaming audio may stop at that point.”


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