The next part of our rights management series will focus on Neighboring Rights.
Neighboring Rights refer to the right to publicly perform, or broadcast, a sound recording. Sound recording owners (record labels and performing artists) collect Neighboring Rights royalties whenever their sound recordings are publicly performed on satellite radio (such as Sirius XM), internet radio (such as Pandora, BBC), cable TV music channels, TV outside of the USA, terrestrial radio outside of the USA, and much more.
Neighboring Rights royalties are collected by Neighboring Rights collection societies. In order to collect the neighboring rights royalties you are owed, registering your individual master recordings directly with each collection society in the territories you are getting radio play in is absolutely essential.
Something worth noting, the Neighboring Rights law differs internationally. Basically, in almost all territories outside of the USA, Neighboring Rights are recognized by law. But Neighboring Rights are not technically recognized by law in the USA, for certain reasons too long and complex to explain here. However, in the USA, the society called Sound Exchange collects “digital performance royalties,” or more specifically, “statutory royalties from satellite radio (such as Sirius XM), internet radio, cable TV music channels, and similar platforms for streaming sound recordings.” Technically, this is not recognized as “Neighboring Rights.” But it’s so similar that I simply umbrella it all into one worldwide service through Symphonic: Neighboring Rights Administration.
The concept of Neighboring Rights is similar to that of performance rights in the field of music publishing, because both kinds of royalties are earned through public performances/broadcasts of music. Except that performance rights refer to the right to publicly perform a musical composition. Neighboring Rights refer to the right to publicly perform a sound recording.
Neighboring Rights and publishing are two completely separate businesses.
Neighboring Rights have to do with sound recordings. Record labels and performing artists own the rights to sound recordings. Therefore, record labels and performing artists collect Neighboring Rights royalties.
Publishing rights have to do with musical compositions. Publishers and composers/songwriters own the rights to compositions. Therefore, composers/songwriters (and publishers/publishing administrators if the composer is signed with a publisher/publishing administrator) collect any publishing-related royalties (performance royalties, mechanical royalties, etc.).
A Neighboring Right is to a sound recording as a performing right is to a musical composition.
Neighboring Rights are to performing artists/record labels as performing rights are to songwriters/composers/publishers.
Neighboring Rights collection societies are to Neighboring Rights as Performing Rights Organizations (PROs) are to performing rights.
If a band covers your song, that equals performance, and if a band plays your sound recording entirely that equals Neighboring Rights.
There are two companies of note that can help individuals and songwriters receive Neighboring Rights income if you reside in the regions where they operate.
Sound Exchange collects “digital performance royalties,” or more specifically, “statutory royalties from satellite radio (such as Sirius XM), Internet radio, cable TV music channels, and similar platforms for streaming sound recordings.” They collect these royalties for performances and broadcasts in the USA and can potentially collect internationally. While Sound Exchange has reciprocal agreements with foreign societies, in reality, they do not work most of the time. For example: In the UK’s Neighboring Rights society, PPL, if recordings are not registered directly with the society (which Sound Exchange currently does not), the radio airplay cannot be matched and the royalties from that airplay cannot be allocated to you.
So, you have Neighboring Rights income if you are a master rights owner and if your master recordings are:
- Being played on Pandora
- Being played on BBC (any BBC radio station)
- Being played on Sirius XM
- Being played on cable TV music channels
- Being played on terrestrial radio outside of the USA
- Being played in businesses as background music (like restaurants, retailers, hotels, etc.)
- Being played in clubs / live performance venues
- Being played on any internet radio platform
- Being played on any satellite radio platform
- Being played on various new online medias
Ensuring you have your music registered through Performing Rights Organizations and/or a Neighboring Rights Society will potentially provide you additional income and protection over your music. This is especially important if we’re talking about an exciting aspect of the industry, Sync Licensing. If you’d like to learn more on collecting Neighboring Rights royalties, make sure to check out our Neighboring Rights service here.