FOR IMMEDIATE RELEASE: May 31, 2007
CONTACT: Rod Hsiao, Rod@Live365.com
Live365 Joins Filing for Emergency Stay of New Royalty Rate Increases
Foster City, CA—Mark Lam, CEO of Live365 Inc. joined other Internet radio companies today to submit an affidavit in support of a motion for an emergency stay to halt a steep increase in sound recording royalty rates. On March 2nd, 2007 the U.S. Copyright Royalty Board (CRB) imposed new royalty rates that threaten to bankrupt Internet radio stations like Live365.
“Look, when ALL Internet radio companies, large and small, are fighting the CRB decision the result is obviously flawed. Live365 is one of the top 4 royalty payers to SoundExchange and I can tell you we’ve never made a profit. Now they want to increase music label profits by arbitrarily increasing rates by 44%, 84%, 136% to 150% over four years! They also increased rates on National Public Radio and college stations. I don’t see any consideration for the public interest in the CRB’s deliberations: it was flawed.
Make no mistake, we want to pay a fair royalty to artists. We have been paying songwriters for their copyright royalties for years and you don’t hear complaints about that. But the new rates are insanely high and will kill Internet radio.”
Background on Live365
Established in 1997, Live365 (www.live365.com) is the world’s largest Internet radio network that hosts nearly 10,000 stations and streams music to more than 4 million listeners a month. Its mission is to make it affordable and easy for individuals to start their own radio stations and share their love for music to listeners around the world. Live365 has gone to great lengths to provide a legal and equitable means to stream music to listeners while paying royalties for the right to do so.
Here are some very interesting quotes from the filing:
Page 5: Appellants have contacted both the Clerk's Office and opposing counsel advising them of this Motion. Appellants have sought the consent of Appellees CRB and SoundExchange, Inc. ("SoundExchange") to the relief requested by this Application. Neither Appellee has provided consent.
Page 7: The irreparable harm manifests itself in different ways for different Appellants, but one common thread runs throughout: absent a stay prior to the effective initial payment date of July 15, 2007, the decision will cause wide-scale shutdowns of Appellants' webcasting offerings.
Page 8: Absent a stay, Live365 will be forced to shut down on July 15, 2007. (As will GR1 and GR2)
Page 8: For four of the SCWs (Small Commercial Webcasters) that participated before the CRB, royalties will increase from 11% of revenues under the pre-existing rate structure to 300% of revenues in 2006, 306.5% of revenues in 2007, and 345% of revenues in 2008 – royalty increases of over 2,000%.
Page 9: Unless stayed, the Final Determination will cause NPR substantially to reduce its online radio offerings as of July 15, 2007.
Page 9: The Final Determination will lead to the loss of many diverse sources of music. It will have a devastating impact on independent artists, small stations, and audiences. Quite literally, the date on which the Final Determination becomes effective will be "the day the music dies" for online radio. A stay pending appeal thus is urgently needed.
Page 20: The rates imposed by the CRB could not possibly comply with the "willing-buyer willing-seller" standard of 5 114(f)(2)(B), because no "willing buyer" would ever agree to the ruinous royalty levels contained in the Final Determination.
Page 23: The statutory factors demonstrate that online radio should be encouraged, not punished with higher royalties.
Page 23: There is no doubt that the Final Determination will have an imminent, certain, and devastating impact on online radio.
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