US performance rights organization SoundExchange has filed a lawsuit against AccuRadio, Inc. to recover unpaid royalties owed to artists and rightsholders.
The lawsuit was filed on Friday (July 19) in the United States District Court for the Northern District of Illinois.
AccuRadio is a US-based internet radio service. US copyright law gives digital broadcasters like AccuRadio access to a blanket “statutory” license for the use of recordings, provided they pay a royalty for the music they use.
SoundExchange is the sole entity in the United States designated by the Library of Congress to administer the statutory license specified in Section 114 of the Copyright Act, collect digital performance royalties from licensees, and distribute those royalties to performing artists and rightsholders.
SoundExchange notes in its lawsuit that AccuRadio “operates a multichannel internet radio service that provides access to over a thousand pre-developed music channels and access to millions of sound recordings”.
AccuRadio claims to reach almost 1 million unique listeners per month “with an audience of as many as 25,000 simultaneous listeners”.
SoundExchange claims that AccuRadio paid statutory royalties for the recordings it was using until 2016 but that the platform’s payments “slowed and finally stopped” in 2018.
SoundExchange claims further that it has been negotiating with AccuRadio since then to resolve its outstanding balance, but that AccuRadio has failed to meet the terms to which the parties agreed.
According to the lawsuit, which you can read in full here, “on or about February 25, 2020, the parties entered” an agreement “for [a] Payment Plan of Past Due Amounts”.
The lawsuit adds, however, that AccuRadio “failed to make required payments under the Payment Plan Agreement as and when due thereunder” and that SoundExchange subsequently “performed an audit of [AccuRadio’s] statutory royalty payments for the period of January 1, 2015 – December 31, 2017, through which it identified additional royalties due to SoundExchange”.
SoundExchange also explains in the lawsuit that it entered into a Forbearance Agreement with AccuRadio and that the internet radio service “paid the first three months of Royalty Payments that became due under the Forbearance Agreement and the statutory licenses for the months of June, July, and August 2023”.
After that, however, SoundExchange claims, AccuRadio “failed to make the required Royalty Payments as and when due”.
“AccuRadio has directly harmed creators over the years by refusing to pay royalties for the use of protected recordings.”
Commenting on the legal action, Michael Huppe, president and CEO of SoundExchange, said: “AccuRadio has directly harmed creators over the years by refusing to pay royalties for the use of protected recordings.
“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.”
SoundExchange’s legal action against AccuRadio arrives a year after the US performance rights organization took legal action against satellite streaming service SiriusXM, over alleged unpaid royalties.
In response to the lawsuit filed last August, SiriusXM said it was “surprised” and “disappointed” by the legal action, and argued its method of calculating the royalties it owes is “rigorous, tested and fair.”
In the lawsuit filed with the US District Court for the Eastern District of Virginia earlier the same day, SoundExchange argued that SiriusXM had “wrongfully withheld more than $150 million in unpaid royalties over the past several years.”
SoundExchange previously filed a lawsuit against SiriusXM in 2013, alleging that SiriusXM had underpaid royalties for pre-1972 recordings aired on its satellite service, and for certain channel packages containing music.
That conflict was resolved in 2018, with an agreement that saw SiriusXM pay $150 million to SoundExchange to settle the claims.
SoundExchange reported in January that it paid out $250 million in royalties in Q4 2023, bringing total gross distributions in 2023 to more than $1 billion.Music Business Worldwide
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