Four months in the new CRB royalty period, the small webcaster landscape has substantially changed:
- Innumerable indie stations have quietly unplugged their streams, unable to afford higher label royalties following the expiration of the Webcaster Settlement Act which provided a lower cost of music to low-revenue streamers.
- Live365, the venerable webcast host and aggregator of thousands of niche stations, lost its investors and dropped abruptly into bankruptcy.
- Radionomy, the European juggernaut which owns both the ShoutCast platform and digital audio advertising company TargetSpot, blocked its streams from U.S. listening in the TuneIn app (temporarily, the company said).
Last month another webcast provider to small stations, StreamLicensing, sold to Stardome Digital Media, a division of the Hispanic and Latin American market specialist Stardome Media Group. StreamLicensing’s business model pays label royalties for its member stations, funding the business with advertising target to combined audiences. But when that royalty cost dramatically escalated in January, owner Marvin Glass sold to Stardome and warned the new owners that success would be an uphill climb.
New Owner; New Challenge
“StreamLicensing was built on the Webcaster Settlement Act,” said Wes Simkins, Chief Operating Officer of Stardome. “We knew we’d have to either raise rates to stations or find a way to cover the new rates.” We called Simkins when we heard that StreamLicensing had issued a station mandate to use a new player for desktop streaming which would be released in June.
“When they did away with the small webcaster agreement, and we took over StreamLicensing on April 1, we thought it would be devastating to raise the rates,” Simkins said. “We feel for small webcaster. I’m a small webcaster. You can only afford so much.” He described stations whose costs would triple, and more, by applying the new CRB rates.
StreamLicensing charges each station a monthly fee calculated in a formula that includes total listening hours and revenue.
New Money Model
Stardome’s stated mission is to create an enhanced moneymaking engine for StreamLicensing that absorbs the higher cost of music without passing the increased cost to its stations. To do that, an integrated sales and technology plan was developed. “We have a new model.” Simkins said. “We can help small webcasters, and we believe that creators should be compensated.”
An in-house marketing team handles ad sales. The effort is assisted by new technology partnerships which add pre-roll video, full-screen takeovers, and programmatic ad insertion into the player scheduled for June launch. The client stations do have to get on board with the launch, and use the player for their web streams — any that don’t will assume liability for the new CRB per-performance rates which have caused so much pain elsewhere. Wes Simkins mentioned AdsWizz as a key ad-tech partner.
With the paired effort in sales and advertising tech, Simkins thinks StreamLicensing can forge into the new CRB era with a model that supports small stations while remaining legally compliant. “We can obtain fees to cover the per-performance rates,” he told us confidently.
Hope for a Different Future
As to the future, Wes Simkins is holding some hope for structural change in regulation of small webcasters in the U.S. “We will actively participate in the lobbying process. But that will take a long time.”
Currently there is no lobbying process, but there is nothing to stop such an initiative, given resources. When Radionomy implemented its U.S. geo-block, the company emphasized that it is engaged in discussions with music rights-holders about the value of small webcasting. The company’s formal statement expressed confidence in a resumption of U.S. streams via TuneIn “when a positive change with the U.S. rates is applied.”