AccuRadio Files for Bankruptcy Amid Royalty Dispute, Sparking Industry Debate
The music streaming landscape is facing a shakeup as AccuRadio, a Chicago-based internet radio pioneer, has filed for Chapter 11 bankruptcy protection. The move comes amidst a heated legal battle with SoundExchange, the organization responsible for collecting digital royalties for recording artists. This development has ignited a debate about the fairness of royalty structures for smaller streaming services.
AccuRadio, which launched in 2000 and boasts nearly 1,400 music channels, claims SoundExchange is demanding over $10 million in unpaid royalties. CEO Kurt Hanson argues that the royalty obligations have become unsustainable, suggesting the system is "rigged, perhaps inadvertently, against small and midsize streamers."
According to Hanson, AccuRadio has already paid SoundExchange over $13.5 million in royalties over the years. The dispute allegedly began when AccuRadio stopped payments in 2018, leading to a lawsuit filed by SoundExchange in 2024. While an agreement was initially reached in 2020, SoundExchange claims AccuRadio failed to uphold its end of the bargain, prompting the legal action.
"We were extremely disappointed that we couldn’t reach a negotiated settlement," Hanson stated, adding that AccuRadio has resumed making full current payments to SoundExchange. He criticized the Copyright Royalty Board’s rate-setting process, arguing that the exorbitant costs associated with legal representation effectively exclude smaller players from participating.
The bankruptcy filing has broader implications for the music industry. Some experts believe that legacy terrestrial radio broadcasters have been struggling in the digital age due to competition from streaming services. AccuRadio's case highlights the challenges faced by smaller, independent streamers in navigating the complex royalty landscape. Large radio chains such as iHeartMedia, Cumulus and Audacy have all previously navigated Chapter 11 bankruptcy filings.
Despite the financial difficulties, AccuRadio remains operational, serving over one million listeners a month. Hanson assures users that the service will continue to provide human-curated music, and the company intends to emerge from bankruptcy stronger. "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," Hanson affirms.
The **AccuRadio bankruptcy** raises crucial questions about the sustainability of smaller streaming services in the face of rising royalty costs. Will this case lead to reforms in royalty structures, or will it become another example of the challenges faced by independent players in the digital music ecosystem?
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