The workaround is stupid:
Play on safari, lock, double home button, play... THEN don't unlock via lock slider: get a message (email/imessage etc) sent to the device, and unlock from that slider, which should show up as a slideable notification. It'll take you directly to the app, and then you can click home twice (quickly after youre in the app, and sometimes you have to repeat the steps above a few times if it doesnt work) and activate background listening via the multitasking bar... and THEN click home.... and then it works......... ...... sometimes.
.... Apple.
It's extremely stupid and strenuous and you have to do this for every new background video... but it works :/