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Live365 warns of potential shut down next month over copyright rate increase

The logo of online radio broadcast service Live365.
The logo of online radio broadcast service Live365.

New rates set by an online copyright board could force hundreds of streaming stations operated by Live365 off the air next month, the service warned in a letter to users on Wednesday.

At issue is a provision that previously allowed small- and medium-sized broadcasters to pay a significantly lesser rate in exchange fora license to legally stream protected music over the Internet. The provision was not renewed when the Copyright Royalty Board recently announced its new rate structure for the next four years beginning in 2016; Live365 primarily serves small- and medium-sized broadcasters.

“The absence of this license will make legally streaming copyrighted musical content prohibitively expensive for many small to mid-sized Internet broadcasters,” the company said in an e-mail on Wednesday. “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.”

In a double blow, Live365 acknowledged that its investors had recently expressed little confidence over the future of the service’s ability to make money, leading to “significant” layoffs throughout the company.

Live365 primarily sells online radio services in the form of cloud storage space, web-based software and streaming bandwidth to amateur broadcasters and small organizations.

“These stations are the hard work of real human beings who use Live365 to share their vision with the world,” Dean Kattari, the director of broadcasting for Live365, said in a statement. “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.”

Live365 says it will continue to operate stations at least until the end of January and is talking with several businesses who may be interested in partnering with the service.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).