_Unfortunately_, statutory licensing means that you can license most commercial music for your station for a couple hundred per year ( https://www.prometheusradio.org/music-licensing-noncommercia... ). Considering the investment of time that goes into scheduling, promoting, etc. a successful station the licensing costs aren't that big a deal.
I say unfortunately because the existence of blanket rates and in particular compulsory licensing has undermined the free market, and as a result new/independent performers have a much harder time getting aired because they essentially can't compete in terms of price (e.g. you can play our stuff free!) because almost every station/venue is already paying blanket rates and doesn't have much marginal cost in playing the commercial stuff.
In the US you could even transmit FM radio at the legal power levels from the base stations too, reaching like one apartment building from each base station.
A bigger legal problem is the copyright question. You could start with music from Jamendo and the Internet Archive but sooner or later your broadcaster DJs are going to want to broadcast Lindsey Stirling or One Direction, and then you'll have to prove in court that it's legal!