Citing a “surprise” lawsuit from digital royalty fee collector SoundExchange and a royalty environment that disadvantages small and midsize streamers, online radio platform AccuRadio filed for Chapter 11 bankruptcy protection in federal court on Wednesday.
In a statement, AccuRadio CEO Kurt Hanson, who founded the company in 2000, said, “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.”
Founded in 2000 by CEO Kurt Hanson, AccuRadio operates an advertising-supported model and claims over one million monthly listeners. Hanson said the company has spent nearly 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.”
SoundExchange filed the lawsuit in July to recover unpaid royalties owed to performers and rights holders, with CEO and President Michael Huppe asserting that AccuRadio “refused to pay royalties for the use of protected recordings” between 2018 and the present.
Hanson says the streamer resumed full royalty payments to SoundExchange months ago and has paid more than $13.5 million to the performance rights organization over the past two decades. As such, according to Hanson, SoundExchange’s lawsuit came “as a complete surprise.”
“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. We were extremely disappointed that we couldn’t reach a negotiated settlement.”
Hanson frames the dispute within the larger context of structural challenges facing smaller streaming platforms. He criticized the Copyright Royalty Board’s rate-setting process, stating that the high cost of legal representation and expert testimony effectively shuts out independent and midsize services from participating.
While acknowledging that filing for bankruptcy was a difficult decision, Hanson said he remains optimistic about the future and is “confident that AccuRadio will emerge from it healthier and more resilient.”
I think the Crossing is going to go back to FM radio maybe even on an analog Audacy signal if AccuRadio isn’t on the internet anymore and unlike last time Mark Blackwell could even duplicate the brand into other markets with different markets (possibly with different owners putting it into their portfolio) tailoring it to their market especially if it is popular within AccuRadio in multiple areas.
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