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In startling reversal, AccuRadio moves to radio, citing high music royalty costs

AccuRadio, one of the two leading brands of pureplay online radio in the U.S., has stunned the online audio business community by announcing that it is switching to broadcast radio distribution. The change will occur on April 5 according to Founder/CEO Kurt Hanson and COO Ben Husmann.

The cost of music has motivated this change of course, according to Husmann. “Due to the high cost of music royalties for online radio, plus an opportunity we see for a significant revenues increase, we’ll be winding down our current online service and moving, effective next week, to broadcast radio,” he said.

In an aggrieved press release, the company describes different royalty structures which the U.S. government regulates for streaming, satellite, and broadcast radio, noting that some webcasters pay an effective rate representing 70% of total revenue. “We believe if more online radio brands follow our lead, even companies like Pandora can find a way to achieve profitability,” Hanson noted.

Escaping to radio, with its rich ecosystem of commercial stops, is the company’s solution. “AccuRadio on the AM band will be able to field a competitive product even while playing up to 22 minutes of commercials per hour,” AccuRadio EVP Music Programming Paul Maloney noted.

AccuRadio differentiates from algorithmic internet radio, and lean-in subscription services, by providing over a thousand human-curated stations. Transitioning this array of content to linear broadcast is a challenge that Hanson and Husmann will solve by spreading the channels out in time.

“All 1,100 of AccuRadio’s curated music channels will be available on the broadcast version of AccuRadio, although only one on any given day,” AccuRadio informed RAIN News via shortwave. As an example, the radio premiere will  feature AccuRadio’s “Ukulele Unleashed” channel, which will then be repeated on June 12, 2025.

We reproduce the entire press release below, as we are too staggered to say anything more about it.


Leading Online Radio Service AccuRadio Moving to Broadcast Radio Distribution to Increase Revenues and Reduce Music Royalty Costs

CHICAGO (3/31/21) — AccuRadio, one of the two leading brands of pureplay online radio in the U.S. and featuring over 1,100 curated and personalizable channels of music, in a bid to increase spot revenues and address the high music royalty costs of Internet radio, will be transitioning away from Internet delivery effective next Monday (April 5th), Founder/CEO Kurt Hanson and COO Ben Husmann announced today.

“Due to the high cost of music royalties for online radio, plus an opportunity we see for a significant revenues increase, we’ll be winding down our current online service and moving, effective next week, to broadcast radio,” Husmann noted.

Hanson noted that Congress and the U.S. Copyright Office have set radically different royalty structures for broadcast, satellite, and Internet radio., with broadcast radio paying about 6% of its revenues for music royalties, satellite radio paying about 15% of its revenues, and Internet radio required to pay a per-performance rate that for some webcasters can represent up to 70% of their revenues. “Although we feel that there is inherent unfairness in this rate disparity, we believe if more online radio brands follow our lead, even companies like Pandora can find a way to achieve profitability,” Hanson noted.

For AccuRadio’s move to broadcast transmission next Monday, the company has already lined up handshake agreements with top broadcast groups similar to iHeartMedia, Audacy (formerly Entercom), Citadel, Beasley, Hubbard, and Mid-West Family Broadcasting (plus Slaight Communications in Canada), for signals that cover close to 38% of the U.S population (and 16% of Canada’s), making AccuRadio’s move to the AM band an easy transition for a large percentage of its listenership, AccuRadio Chairman John Gehron noted.

All AccuRadio Channels Will Be Available

All 1,100 of AccuRadio’s curated music channels will be available on the broadcast version of AccuRadio, although only one on any given day.

“Liberated from the conventions of online radio, which include a typical spot load of only about 4 minutes of commercials per hour, in its new competitive environment, AccuRadio on the AM band will be able to field a competitive product even while playing up to 22 minutes of commercials per hour,” AccuRadio EVP Music Programming Paul Maloney noted. [1]

AccuRadio was able to line up a strong network of signals for its launch as a result of recent events.  “Thanks to Rush Limbaugh’s passing, lots of AM stations have become available at affordable prices,” noted Hanson. “While some of us will miss Rush’s insights, perhaps AccuRadio’s diverse music offerings will similarly add to the public good.”

Initial Channel Line-Up Announced

Subsequent to the shutdown of its Internet-delivered product, AccuRadio will debut on AM radio on Monday, April 5th with its “Ukulele Unleashed” channel.  “If you love ukulele music, don’t miss it, because that channel won’t be coming up again in the channel rotation until Saturday, June 12th, 2025,” noted AccuRadio Senior Music Director and Social Media Manager Eric Bowden.

Other AccuRadio channels that will be featured in its first week of its new incarnation include “Magic Sunny Lite Hits Mix” on Tuesday, April 5th (available again on Sunday, June 13th, 2025 and Wednesday, August 30th, 2029), “Rock ‘n Stereo” [2] (a tribute to the glory days of AOR radio) on Wednesday, April 6th (available again on Monday, June 14th, 2025 and Thursday, August 31st, 2029), and “Cocktail Jazz Trio” (inspired by the combos that play at Houston’s and Bandera restaurants) on Wednesday, April 7th  (available again on Tuesday, June 15th, 2025 and Friday, September 1st, 2029).  Dates in 2025 and 2029 are tentative and subject to change as they don’t reflect the fact that AccuRadio continually adds fresh new channels to its channel lineup.

Gehron noted that the small number of AccuRadio listeners who live outside of those 38% of U.S. markets that will have an AccuRadio AM signal can order, until Sunday (4/4), their favorite AccuRadio channel on a set of forty 90-minute stereo cassettes.[3]

In-Car Listening Still Available

Starting Monday, in-car listening will be almost as easy as listening to AccuRadio on a smartphone, AccuRadio Senior Developer Phil Vuollet noted: “For example, if you’re driving from Minneapolis to St. Louis, just tune to AccuRadio AM 1240 until you get near Mankato, then switch to AM 830.  At Mason City, change your dial to AM 1650; Fort Dodge AM 1280; then expect 20 miles of no signal; and then simply turn to AM 1550 in Des Moines.  It’s that easy!”  Voullet adds, “As a mnuemonic device, simply remember this rhyming couplet:  ‘1240, 830, 1650, 1280, 20 miles, and 1550’.”

Promotional announcements describing various popular driving routes in America, and the recommended listening frequencies for each route, will air on AccuRadio on a thrice-hourly basis during the remaining four days of its Internet streaming.

[1] As a humorous and “tongue-in-cheek” reference to AccuRadio’s new spot load policy, AccuRadio brand manager Todd Manley noted that one of AccuRadio’s slogans, on days that AccuRadio AM’s featured channel is one of AccuRadio’s 38 world music channels, will be “Give Us 22 Minutes [of Listening to Commercials], We’ll Give You the World Music”

[2] To be rebranded as “Rock ‘n Mono”

[3] Listeners can receive a $900 discount in the price of the cassette package by using promo code NOAM400, reflecting a 20% savings

 

Brad Hill

7 Comments

  1. Will some one explain this to me ? “Internet radio required to pay a per-performance rate that for some webcasters can represent up to 70% of their revenues” My Label only receives 6 Cents per 100 Streams – – –

  2. Brilliant move! Spotify and Pandora have missed the boat in satisfying consumer demand for longer stop-sets – this move nails it!

    • there is consumer demand for hearing longer commercials? stop sniffing glue

  3. OK, you guys actually got me for a few moments. Hahahaha. I feel like an idiot! The concept of royalties being too high is understandable. The rotating format idea was over the top! Especially the frequency change travel sequence. Geeeeez! Good one!

  4. You guys are making a serious mistake. Do you really expect people to wait three years for each one-day of good programming? I have a suggestion, and if you use it I only expect 65% of your gross income as my royalty. Buy 1100 AM stations spread evenly around the country for $.75 each. Not $.75 on the dollar, literally you can get them for $.75 as no one wants them. Then put one of your channels on each individual station 24/7. And then all you have to do is get people to move around the country once, and they will have the exact music they want all day every day. Assuming of course they can find a terrestrial radio tuner these days. That’s a separate issue, and you may have to produce your own and provide them free of charge. Final thought; considering the 200 quadrillion dollar infrastructure package the communist party is now suggesting, I think you could get 200 years of funding in one shot from them. Think about it, let’s say they want to build a big bridge in Idaho (assuming Idaho has bridges – I have no idea) then they’re going to need a bunch of bridge builders in Idaho. Nobody has thought about that. But you could do some market research and see what kind of station bridge builders prefer, and then you could run that station 24 seven someplace in Idaho nearby the new bridge construction site. That way there would be a natural surplus of bridge builders right where they are necessary, saving the communists a small fortune in relocating workers! You are welcome 🙂

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