Neighboring rights can be a tricky topic if you’re a newcomer in the music industry. Let’s begin by introducing the two types of recording copyrights: author’s rights (or songwriters copyright) and neighboring rights. The former refers to copyright on the composition of a song and it includes the writers, composers, and publishers. All the royalties from this type of copyrighting go to the previously mentioned entities.
Neighboring rights, on the other hand, refer to copyright for playing music in public places, and streaming devices and platforms. These include streaming platforms, restaurants, TV, radio performances, and so on. All neighboring rights royalties go to the record company behind the song, and the performing artist.
The royalties are usually divided 50/50 between the record label and the artist. If there’s a featured and a non-featured artist, then one half is split between them. Furthermore, independent musicians can claim 100% of the royalties if they are the master owners as well as performing music artists. Since we cleared up what neighboring rights are, it’s best to give an example to help clarify any confusion.
Say a radio station wants to play a song by a certain artist. In that case, the radio station has to pay royalties to the artist and the record label behind the song. These shouldn’t be confused with the royalties that come from selling the songs. Avoiding the neighboring rights payment bears a legal penalty that varies from country to country.
Who Deals With Neighboring Rights?
Three major societies in the world collect neighboring rights royalties: PPL (UK) and PPCA (Australia), and SoundExchange (US). Essentially, you’ll have to register your master recordings with a collection society in the places where you’re broadcasting your music to earn royalties. But, the laws regarding the collection of these royalties are different in every region of the world, and especially differ in the US.
In the US, terrestrial (land-based) broadcast platforms only pay the author’s copyright. This means that they only pay royalties to the songwriters, composers, and publishers. Recordings outside the US, however, are eligible to collect royalties from terrestrial radio. But, on digital platforms like SiriusXM/Pandora artists can collect royalties via SoundExchange.
Similar to SoundExchange we have PPL. A London-based collection society which operates since 1934 and has over 120,000 performers and recording rights holders. It is primarily responsible for licensing music and distributing royalties back to the parties behind the tracks when they are performed on TV or radio within the UK. Some of the channels they license for are the BBC, ITV, and Channel.
Next, we have PPCA, a collection society company with headquarters in New South Wales. It's been operating since 1969 and is currently licensing over 55,000 venues around Australia. It functions exactly like PPL, but it’s licensing music and music videos, and distributes royalties to Australian artists.
If you’re a performing artist and you need help with collecting your neighboring rights royalties, you can hire a neighboring rights administration company. A notable company that deals with this is Kobalt. Its team consists of professionals with long-established relationships with collection societies that help make the most of the market. They are working with highly efficient third-party searching methods and Kobalt’s territory prediction system.
How can Reprtoir help?
So, how does Reprtoir help with neighboring rights royalties?
In an era of digitalization, where music is everywhere, it’s important to manage your royalties. Luckily, Reptroir has excellent royalties accounting software. It offers a service for managing your incomes, fees, advances, and process royalty statements from any source and in any currency.
It’s partnered with over 60 digital, neighboring, performance, and mechanical rights organizations, including the renowned Kobalt. So, you know you’re in good hands. Reprtoir offers tons of features for labels and publishers, such as advanced filtering, mass editing, saved searches, and data exports. For the full list check out Royalty Management Solution.
If you’re willing to try Reprtoir’s neighboring rights royalties manager, you can get in touch with us right now!