On Monday (July 22), we reported that US performing rights organization SoundExchange filed a lawsuit against US online radio service AccuRadio, Inc., seeking to recover unpaid royalties owed to artists and copyright owners.
The legal action comes just a year after SoundExchange took legal action against satellite streaming service SiriusXM over alleged unpaid royalties.
SoundExchange claims in its lawsuit against AccuRadio that the free internet radio service paid statutory royalties for recordings it used before 2016, but that the platform’s payments “slowed and ultimately stopped” in 2018.
SoundExchange also claims that it has been in negotiations with AccuRadio since 2018 to resolve its outstanding balance, but AccuRadio has failed to meet the agreed terms.
“AccuRadio’s refusal to pay royalties for the use of protected sound recordings for many years has directly harmed creators,” SoundExchange President and CEO Michael Huppe said in a statement released Monday.
Huppe added: “Today, SoundExchange is standing up for creators with this lawsuit to protect the value of music and ensure creators are fairly compensated for their work. We hope AccuRadio will reverse the situation immediately and pay them for their use. Fees owed for music services basis.
AccuRadio founder and CEO Kurt Hanson has now responded, claiming in a statement to MBW that “the lawsuit against AccuRadio comes as a complete surprise to the company.”
Hanson added: “We have been negotiating a fair and reasonable payment plan with SoundExchange for several months, and we believe both parties have good intentions.
“In fact, we believe our latest proposal is being reviewed by SoundExchange and will be adopted by all parties with only minor modifications.”
Hanson also disputed allegations in the lawsuit that AccuRadio “failed to pay” substantial royalties and claimed the streaming service “has always been reliable.” [SoundExchange] I have been a licensee for the vast majority of the past 20-plus years.”
He further claimed that AccuRadio has paid more than $12.5 million in royalties to SoundExchange to date.
Hansen added: “[SoundExchange’s] It is false to suggest that AccuRadio has not paid royalties since 2018 and fails to note that AccuRadio resumed full payments in early 2021 and continued until recently.
SoundExchange states in the lawsuit that AccuRadio “operates a multi-channel Internet radio service that provides access to more than a thousand pre-developed music channels and millions of recordings.”
AccuRadio claims to have nearly 1 million unique listeners each month, with “up to 25,000 simultaneous listeners.”
U.S. copyright law gives digital broadcasters such as AccuRadio a full “statutory” license to use sound recordings, provided they pay royalties for the music they use.
SoundExchange is the only U.S. entity designated by the Library of Congress to administer statutory licenses under Section 114 of the Copyright Act, collect digital performance royalties from licensees, and distribute those royalties to performing artists and rights holders.
AccuRadio CEO Kurt Hanson claimed in a statement that “recording royalty rates for music played on online radio are much higher than for other forms of radio.”
Hanson added: “AM/FM stations do not pay recording royalties for terrestrial broadcasts, and satellite broadcasts are rumored to pay royalties of about 15% of revenue, but AccuRadio’s [SoundExchange] Royalty obligations in certain months range from 45% to 78% of its revenue.
Hansen added that the webcasting service “intends to[s] Continued cooperation [SoundExchange]Directly or through a judge, work out a fair and reasonable payment plan for past debts and resume current payments as quickly as possible.global music business
