SX Sues AccuRadio; AccuRadio Responds
• SoundExchange (SX) on Monday announced it has filed has suit against AccuRadio, Inc. “to recover unpaid royalties owed to performers and rights owners.” The suit was filed on July 19 in the United States District Court for the Northern District of Illinois.
“AccuRadio has directly harmed creators over the years by refusing to pay royalties for the use of protected recordings,” said Michael Huppe, President & CEO of SoundExchange. “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.”
• In an endeavor to get both sides of the story, RAMP reached out to AccuRadio Founder/CEO Kurt Hanson (left), who sent us this response: “SoundExchange’s (SX) lawsuit against AccuRadio comes as a complete surprise to us, as we have been working with SX negotiating a fair and reasonable payment plan for several months now, in what we believed was good faith from both parties. In fact, we thought our latest proposal was being vetted by SX and would be adopted by the parties with few modifications.”
Hanson continued, “Rather than ‘refusing to pay royalties,’ as SX’s press release states, in fact AccuRadio has been a consistently reliable SX licensee for the vast majority of the past 20+ years, having paid SX over $12,500,000 in royalties to date. SX’s implication that AccuRadio hasn’t paid royalties since 2018 is erroneous and fails to note that AccuRadio resumed full payments in early 2021 and continued until very recently.”
The core problem for AccuRadio and for many other music services, Hanson notes, “is that sound recording royalty rates for music played on online radio are wildly higher than they are for other forms of radio — or for other forms of royalties such as songwriters’ royalties. AM/FM stations pay no sound recording royalties for terrestrial broadcasts, and satellite radio is rumored to pay a royalty of about 15% of revenue,” Hanson said, “yet, AccuRadio’s SX royalty obligation in some months has worked out to be as high as 45% to 78% of its revenues.”
Hanson further notes that the high music streaming royalty rates are particularly challenging for smaller and independent webcasters like AccuRadio that don’t have deep pockets or multinational corporate parents. In conclusion, Hanson remarked, “At AccuRadio, we love the medium of online radio — with its ease of use, incredible variety, personalization features, and reasonable spot load – and we intend to continue to work with SX, either directly or via a judge, to enter into a fair and reasonable payment plan for past obligations and to resume current-period payments ASAP.”
