AccuRadio Files for Chapter 11, Blames Royalty System

RADIO ONLINE | Thursday, May 15, 2025 | 3:30pm CT

AccuRadio

AccuRadio, a pioneering human-curated streaming music service, has filed for Chapter 11 bankruptcy protection, citing unsustainable royalty obligations and a failed legal settlement with SoundExchange, the organization tasked with collecting and distributing digital music royalties.

The Chicago-based company, founded in 2000 by longtime radio and streaming advocate Kurt Hanson, reported $1 million in assets and $10.5 million in liabilities in its May 14 filing in the U.S. Bankruptcy Court for the Northern District of Illinois. Despite the financial strain, the filing notes there will be funds available for unsecured creditors.

AccuRadio says the decision to seek bankruptcy protection was driven by an impasse in negotiations with SoundExchange, which sued the company in mid-2024 over royalty payments. Hanson said the suit was unexpected, as the company had been working toward what it believed was a near-finalized payment plan.

"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," Hanson said. "However, eventually SoundExchange altered its position and rejected that proposal."

Hanson noted that AccuRadio has paid over $13.5 million in royalties to SoundExchange over the years and resumed full, current payments "many months ago." Still, the service claims the existing royalty framework is stacked against small and midsize streamers.

"The royalty system seems rigged -- perhaps inadvertently -- against smaller players," Hanson said. "The Copyright Royalty Board's rate-setting process leaves us out because the costs of legal participation are prohibitively high."

Paul Maloney, AccuRadio's EVP of Music Programming, echoed that sentiment, saying the current system favors superstar artists backed by major labels at the expense of independent musicians and discovery-based platforms like AccuRadio.

"Emerging artists don't benefit from another Taylor Swift or Drake playlist," Maloney said. "They benefit from services like AccuRadio that take creative risks and highlight underappreciated talent."

AccuRadio offers over 1,400 human-curated channels and reaches an estimated one million monthly listeners. The service has remained independent and fully ad-supported since its inception and bills itself as a haven for adult listeners seeking an alternative to algorithm-driven playlists.

Despite the bankruptcy, Hanson says AccuRadio is not only still operational, but improving. "Revenues have been consistently rising, and we are now profitable," he said. "Filing wasn't easy, but we believe AccuRadio will emerge healthier, more resilient, and better able to serve our loyal listeners and the artists we champion."

The company joins other audio and broadcast firms -- including iHeartMedia, Audacy, and Cumulus -- that have used Chapter 11 as a restructuring tool in recent years. AccuRadio's case number is 25-07366.