AccuRadio Seeks Chapter 11 Protection, Citing Broken Royalty System and SoundExchange Litigation

AccuRadio, the oldest surviving brand of personalizable online radio and the leading fully-human-curated music streaming service, sought Chapter 11 bankruptcy protection in Chicago today 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,” said AccuRadio CEO Kurt Hanson, who founded the firm back in 2000.

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

INABILITY TO REACH SETTLEMENT WITH SOUNDEXCHANGE

“SoundExchange filed a lawsuit against 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 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 continues 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 only the select group of superstar performers on the Big Three record labels (Universal, Sony, and Warner),” said Paul Maloney, AccuRadio’s EVP/Music Programming.

“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,” Maloney concluded.

ACCURADIO WILL REMAIN AN INDEPENDENT MUSIC STREAMER

“Filing for bankruptcy protection wasn’t an easy decision, especially since our revenues have been consistently improving and we have returned to profitability, but we are confident that AccuRadio will emerge from it healthier and more resilient, and will continue to be an outlet for human-curated music that our listeners desire and cherish,” Hanson concluded.

ABOUT ACCURADIO:

Founded in 2000, AccuRadio offers more than 1,400 thoughtfully-curated music channels tailored to adult listeners. It has remained proudly independent and 100% advertising-supported for over two decades. With a loyal audience of over a million listeners a month, AccuRadio has long championed the power of music discovery driven by humans, not algorithms.