What Are Neighboring Rights and Why Are They Important?

Neighboring rights refer to the right to publicly perform or broadcast a sound recording.They are called neighboring rights because they are said to be “related to” performance rights in the field of music publishing, or the right to publicly perform a musical composition. In this post, we’ll break them down and give you everything you need to know.

What Are Neighboring Rights and Why Are They Important?

Let’s break it down…

The concept of neighboring rights is similar to that of performance rights. Both kinds of royalties are earned through public performances/broadcasts of music. The difference is performance rights refer to the right to publicly perform the musical composition, and neighboring rights refer to the right to publicly perform the 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.

What do neighboring rights have to do with independent record labels?

Neighboring rights are the right to broadcast master recordings, controlled by master rights owners – and master rights owners are the record label.

If you’re a record label manager, and your master recordings are being publicly performed and broadcasted on the following media, you – and the artists performing on those recordings – are earning neighboring rights royalties!

To clarify,  you’re earning neighboring rights royalties if your music is being played on:

• Pandora (or any internet radio platform)
• BBC Radio
• Sirius XM (or any satellite radio platform)
• Cable TV music channels
• terrestrial radio outside of the USA
• Businesses and retailers as background music (I.e. Restaurants, retailers, hotels, etc.)
• Live in clubs / live performance venues
• Various new online medias as digital music technology changes and develops more over time.

Sound recording owners (record labels and performing artists) collect neighboring rights royalties whenever their sound recordings are publicly performed on any of the above media.

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.

If you’re a performing artist and know your recordings are getting radio airplay, talk to your record label that released your EP/LP/album. See if the label is already collecting these royalties for you… or if they themselves need to get on board with this so that you and your label can collect these royalties!

Remember: Selling well doesn’t necessarily mean you’re earning these royalties.

The important thing to realize is that just because your recordings are selling well in any given territory does not mean you are earning neighboring rights royalties. Neighboring rights royalties are earned when your master recordings are publicly performed and broadcasted, not sold. With that said, if there is a large rise in sales in any particular territory, this might be an indicator that radio play has occurred, so any neighboring rights administrator should take note of significant increases in sales!

International Neighboring Rights Law & USA’s Sound Exchange

Neighboring rights law differs internationally.

Basically, in most 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 complex reasons. Here’s the short version: During the big convention that officially recognized neighboring rights, the Rome Convention of 1961, the United States did not attend and did not sign the official Rome Convention document. Only countries who are signatories to the Rome Convention pay these neighboring rights royalties to master rights owners.

(Click here to see the full list of Rome Convention signatories.)

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 publicly streaming sound recordings.” Technically, this is not recognized as “neighboring rights.” But it’s so similar that we simply umbrella it all into one worldwide service: Neighboring Rights Administration.

How Symphonic Distribution Helps Labels Collect These Royalties with the Click of a Button.

The aim of Symphonic’s Neighboring Rights Administration service is to help our eligible distributed label partners – who are the master rights controllers of their distributed music with us, and who have proven to have radio airplay – collect their neighboring rights royalties. With a few clicks of a button, our labels give us their recording data that we then export simultaneously to key neighboring rights collection societies in the world.

As easy as that, their recordings are registered and their royalties are collected!