performance royalties Archives

Neighboring rights and royalties are one of the least understood aspects of the music business in the US, and unfortunately, the reason for that is mostly out of artists’ control.

In today’s music business, knowledge is power. Understanding the various ways people or companies may use your music and how you can earn from their use matters more than ever. Neighboring Rights is a term that relates to the royalties earned from the public performance of a sound recording. The performing artists on the recording and the copyright holder of the master recording are entitled to receive royalties every time it is broadcast on TV, radio, or any other live performance.

In short, neighboring royalties for performing artists and master owners are the same as the performance royalties are for songwriters and publishers.

All that will make sense to some of you, but others probably need a little more insight. We certainly did. Thankfully, our friends at The Modern Musician have a new video that further explores neighboring rights, and the royalties artists can earn through them. Check it out:

Perhaps the most interesting piece of information from the video above is that the US does not recognize neighboring rights. Broadcasters in the United States are exempt from paying license fees to performers and labels when a sound recording plays on terrestrial TV. As a consequence, the US does not have a traditional organization for the collection and distribution of neighboring rights royalties.

But why? Why doesn’t the US have a group responsible for this?

The answer goes back to 1961 and the Rome Convention for the protection of Performers, Producers of Phonograms, and Broadcasting Organizations. Only countries that are signatories to this convention recognize and pay neighboring rights and only performers who are permanent residents of these countries — or if the musical recording was made in one of the countries that signed — are eligible for these royalties. The United States is not a participant.

One consequence of the US decision to not recognize or pay neighboring royalties is that it hurts an artist’s ability to profit. In an era where physical media is declining, and competition for ticket sales is fiercer than ever, artists need as many revenue streams as they can find. Neighboring royalties would not change every performer’s life in a significant way, but it would put more money in their pockets.

Hello, everyone! We are continuing our look at life in the music industry this afternoon with the first of two Advice columns for the week. If you have any questions about the content of this article, or if you have a suggestions for a future installment of this series, please email james@haulix.com and share your thoughts. We can also be found on Twitter and Facebook.

Hunter S. Thompson famously called the music industry ‘a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs.’ While we do not necessarily agree with this sentiment,we can agree the music publishing world is a strange and often confusing place place where things slip through the cracks when no one is looking. If you’re a band working with sites like Spotify or Rdio today without someone representing you in the publishing world who has at the very least a working knowledge of how the business game is played there is a good chance you may be missing out on money that is owed to you. We cannot help you claim monies potentially due, but we can help you better understand the numerous ways independent artists are able to generate income through streaming services.

1. Basic stream payments

There have been dozens, if not hundreds of blog posts written across the world wide web about the lack of quote/unquote “fair” payout to artists from streaming platforms. Many bands have turned to social media with complaints, often citing how thousands of streams resulted in less cash than would be required to fill the same band’s van a single time while on tour. Regardless, there is money to be made here. These payments are often referred to as the ‘master royalty’ or ‘artist royalty,’ but in simpler terms they are fees being paid for streaming your licensed sound recording.

2. Peformance royalties

Performance royalties in the music industry can include any of the following:

a performance of a song or composition – live, recorded or broadcast
a live performance by any musician
a performance by any musician through a recording on physical media
performance through the playing of recorded music
music performed through the web (digital transmissions)

That last one is where streaming comes in. As long as you’re registered as both a songwriter and publisher with a performing rights organization such as ASCAP or BMI, then you’ll receive these royalties. If not, click here for more information on Performing Rights Organizations and how you can become a member.

3. Mechanical royalties

The term mechanical royalty covers any copyrighted audio composition that is rendered mechanically. For example:

tape recordings
music videos
ringtones
MIDI files
downloaded tracks
DVDs, VHS, UMDs
computer games
musical toys etc.

Several online services, including YouTube and Spotify, likely owe you for these royalties. Unfortunately, due to a number of loopholes and similar ‘industry troubles’ many independent artists never see this money without the help of a publishing agent (HFA, for example).

4. Performance royalties for the master recording

This one requires the help of our friends at SoundExchange. They collect performance royalties on behalf of the people who helped create a particular sound recording, including session players, record labels, etc. Spotify pays these kinds of performance royalties to SoundExchange for “non-interactive” plays via Spotify Radio, but not for on-demand streams).If you’re interested in joining SoundExchange, click here for information on becoming a member. Signing up is fast, easy, and best of all – absolutely FREE.