accuradio
Free music streaming service AccuRadio has filed for bankruptcy, citing $10 million in debts to SoundExchange and failed settlement talks in the organization’s lawsuit against the streamer over unpaid artist royalties.
AccuRadio, an ad-supported platform that describes itself as “the only online music streaming service curated by human beings, not algorithms,” sought bankruptcy protection in a Wednesday (May 14) petition to the federal court in its home city of Chicago.
The bankruptcy petition says AccuRadio owes $10 million to SoundExchange, the nonprofit that collects and distributes royalties to record labels and artists. SoundExchange sued AccuRadio last summer, alleging the streamer had an undisclosed amount of unpaid royalties dating back to 2018.
Trending on Billboard
AccuRadio contests those claims, saying it’s been a “consistently reliable SoundExchange licensee for the vast majority of the past two decades.” The company put out a press release Wednesday, blaming its bankruptcy on failed settlement talks in the litigation.
“We were led to believe that our latest proposal would be accepted by SoundExchange with only minor modifications,” wrote AccuRadio’s founder/CEO, Kurt Hanson. “However, eventually SoundExchange altered its position and rejected that proposal. We were extremely disappointed that we couldn’t reach a negotiated settlement.”AccuRadio’s bankruptcy petition says the company has less than $1 million in assets, while its liabilities total $10.5 million. In addition to the $10 million SoundExchange debt, AccuRadio says it owes more than $400,000 to royalty collectors BMI and ASCAP.
The streaming service has filed for Chapter 11 bankruptcy. This means that rather than fold completely, AccuRadio hopes to restructure, pay off its debts and continue operations in the future.
“Filing for bankruptcy protection wasn’t an easy decision, especially since our revenues have been consistently improving and we have returned to profitability,” says Hanson in the AccuRadio press release. “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.”
AccuRadio has been around since 2000. According to the company, it offers more than 1,400 ad-supported, curated music channels free of charge.
SoundExchange is suing a free streaming service called AccuRadio over allegations that the company failed to pay royalties for music, claiming the streamer has “directly harmed creators.”
In a lawsuit filed Friday in Washington D.C. federal court, SoundExchange accused AccuRadio of violating the federal law that governs how radio-like services pay royalties to record labels and artists for the right to publicly perform copyrighted sound recordings.
SoundExchange – the non-profit that collects and distributes such “statutory royalties” – says AccuRadio had always paid its full bill until 2016, when its payments “slowed” and then finally stopped in 2018.
“AccuRadio has directly harmed creators over the years by refusing to pay royalties for the use of protected recordings,” said Michael Huppe, SoundExchange’s president and CEO said in a statement on Monday. “Today, SoundExchange is standing up for creators through this lawsuit to protect the value of music and ensure creators are compensated fairly for their work. We hope AccuRadio will immediately reverse course and pay what they owe for the use of the music that sits at the foundation of its service.”
Trending on Billboard
Founded in 2000, AccuRadio boasts that it is “the only online music streaming service curated by human beings, not algorithms.” The company offers hundreds of ad-supported free music channels that users can further customize, including skipping songs they don’t like.
According to SoundExchange, after AccuRadio stopped paying its royalty bill, the two sides have attempted to negotiate a solution for years, including a so-called forbearance agreement last year in which the streamer agreed to make a set down payment and then regular additional payments. But after three months, SoundExchance claims AccuRadio defaulted on that agreement, too.
“The cumulative amount of defendant’s underpayment – which harms SoundExchange, as well as the performing artists and copyright owners on whose behalf it collects and distributes royalties – continues to grow with each passing month,” SoundExchange’s lawyers write in their complaint.
In addition to demanding payment, the lawsuit is seeking a preliminary injunction that would immediately force AccuRadio to either pay up or stop offering copyrighted music to its listenership.
“While defendant has defaulted on the payments due pursuant to the forbearance agreement, it continues to operate its multichannel internet radio service, providing access to over a thousand pre-developed music channels and access to millions of sound recordings,” the lawsuit reads. “Injunctive relief is reasonably necessary to stop defendant from abusing the statutory license and incurring further damages throughout the pendency of this litigation.”
AccuRadio did not immediately return a request for comment on Monday.
-
Pages