AccuRadio, the oldest surviving brand of personalizable online radio and the leading fully-human-curated streaming service, sought Chapter 11 bankruptcy protection in Chicago after reaching an impasse in the face of litigation from SoundExchange and a royalty scheme that renders music streaming extremely challenging for all but the largest corporations.

“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 CEO Kurt Hanson, who founded the firm back in 2000.

“The Copyright Board’s rate-setting process leaves small and midsize players out of the process because of the extremely high costs of lawyers, expert witnesses, and discovery make participation virtually impossible.” Hanson said.

“SoundExchange filed a lawsuit agains us in mid-2024 that came as a complete surprise because we had been working with their lawyers for months to reach a fair and reasonable payment plan — and we thought we were almost there,” Hanson said.

“Then, after many more months of negotiating in good faith during the litigation process, we were led to believe that our latest proposal would be accepted by SoundExchange with only minor modifications. However, eventually SoundExchange altered its position and rejected that proposal” Hanson added.

“We were extremely disappointed that we couldn’t reach a negotiated settlement,” Hanson continued, adding that “AccuRadio has been a consistently reliable SoundExchange with only minor modifications. However, eventually SoundExchange altered its positioning rejected that proposal,” Hanson added.

“We were extremely disappointed that we couldn’t reach a negotiated settlement,” Hanson continued adding that “AccuRadio has been a consistently reliable SoundExchange licensee for the vast majority of the past two decades, having paid SX over $13,500,000 in royalties,” he added.

“Furthermore,” Hanson observed, “AccuRadio resumed full current payments to SoundExchange many months ago and continue to keep current with ongoing obligations.”

HIGH RATES HARM EMERGING AND MID-TIER ARTISTS

“The existing royalty system was ostensibly created in large part to benefit musicians, but it mostly benefits the elect group of superstar performers on the Big Three record labels (Universal, Sony, and Warner),” said Paul Mahoney, AccuRadio’s EVP/Music Programing.

“These artists already dominate algorithm-driven playlists and terrestrial airwaves. As a human-curated streamer with nearly 1,400 channels of myriad genres, we provide a haven for the music of tens of thousands of talented working musicians — i.e, those who tour regionally, record independently, and release albums through boutique labels.” he added. 

“Emerging artists don’t benefit from yet another Taylor Swift or Drake playlist. They benefit from services like AccuRadio who take creative risks, highlight underappreciated talent, and build genuine musical communities. That’s what AccuRadio has done for over 20 years — and what the current system makes so hard for us now.”

AccuRadio, one of the two leading brands of pureplay online radio in the U.S. and featuring over 1,100 curated and personalizable channels of music, announced that it would NOT be shutting down its online streams and moving to various AM ready frequencies, as it had announced earlier.

“We appreciated the outpouring of concern from listeners who were afraid they might not live in one of the 38% of U.S., markets that would have an AccuRadio AM transmitter,” noted COO Ben Husmann. “We thought would cover almost everybody, but we have realized that some of our listeners might indeed not be in an AccuRadio AM market, nor willing to move to one.”

In AccuRadio’s original plan for its move to broadcast radio, all 1,100 of AccuRadio’s curated music channels were going to be available on the broadcast version of AccuRadio, albeit only one on any given day. “Some listeners were also dissatisfied that, given the fact that we would be cycling through, 1,100 channels, their favorite AccuRadio channel would only be available for one day every 3-1/2 years, which some listeners felt was insufficiently frequent,” Brand Manager Todd Manley noted.

The deciding factor, however, noted Senior Music Director and Social Media Manager Eric Bowden, was the realization that AM radios typically do not have a “skip” button. “We just assumed that it was a base requirement for an audio product in the modern era,” he noted.

In conclusion, CEO Kurt Hanson noted there would be no change in the AccuRadio listeners who live outside of those 38% of U.S. markets that were going have an AccuRadio AM signal could order their favorite AccuRadio channel on a set of forty 90-minute stereo cassettes. All orders received on the first of April will be promptly refunded.