In December 2015 broadcasting service provider Live365 sent the following letter to it’s subscribers announcing that it was making redundancies and likely to close it doors in the new year.
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.
The Last of the Live365ers.
This time however the news is true, unlike rumours which circulated widely in 2001 during the “dot com crash” the company was closing because investors had pulled funding. With the company attributing part of reason for it’s closure to the recent Copyright Royalty Board (CRM) ruling one of the clauses of which revokes the option for broadcasters to pay a percentage of their annual revenues in fees rather than a flat fee per track played. The company has also lost the support of it’s financial backers, the exact reason for which is not entirely clear. So at this stage the future looks pretty bleak for the 17 year old broadcasting company unless new backing can be found, it can rework it’s business model or make some kind of deal with the CRB. What’s more rumors are circulating from other companies as well with plans to change their business models such as Digitally Imported which may be about to close it’s free service.