Photo Credit: Ashley King (AccuRadio website)
AccuRadio, an early pioneer in human-curated online radio, has filed for Chapter 11 bankruptcy after a protracted legal battle with SoundExchange over royalties.
The conflict traces back to 2016, when AccuRadio’s royalty payments to SoundExchange became inconsistent and ultimately ceased in 2018. SoundExchange is tasked by the U.S. government with administering the statutory license under Section 114 of the Copyright Act. SoundExchange claims that AccuRadio accumulated substantial unpaid royalties and failed to meet the terms of negotiated payment plans set up by SoundExchange.
In July 2024, SoundExchange filed a lawsuit in federal court, alleging that AccuRadio had “directly harmed creators over the years for refusing to pay royalties for the use of protected recordings.” AccuRadio contests that characterization, stating that it had been a reliable licensee for over two decades and has paid more than $13.5 million to SoundExchange in royalties.
AccuRadio CEO Kurt Hanson expressed surprise at the lawsuit, noting the company resumed current payments in early 2021. Hanson also says his company engaged in ongoing negotiations with SoundExchange to resolve the outstanding balance. Hanson says the bankruptcy was triggered by the lawsuit, but also by what he describes as a “royalty scheme that renders music streaming extremely challenging for all but the largest corporations.”
The bankruptcy filing reveals AccuRadio owes $10 million to SoundExchange, with total liabilities of $10.5 million. The company also owes significant sums to BMI and ASCAP—estimates put the figure at $200,000 each. The Chapter 11 bankruptcy will allow AccuRadio to restructure its debts and continue its daily operations, rather than shutting down.
Hanson argues that the Copyright Royalty Board’s procedures exclude smaller services due to the prohibitive costs of legal and expert participation, resulting in rates that are unsustainable for all but the largest players. He claims this effectively ‘rigs’ the system against independent platforms.
“AccuRadio has spent almost 25 years building an innovative and well-loved music streaming service while facing royalty obligations that climbed to levels that seem to suggest the system is rigged, perhaps inadvertently, against small and midsize streamers,” AccuRadio founder and CEO Kurt Hanson said in a news release.
Content shared from www.digitalmusicnews.com.