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News June 29, 2022

How a Busted Reciprocal Agreement Has Ripped Off Australian Musicians

Senior Journalist, B2B
How a Busted Reciprocal Agreement Has Ripped Off Australian Musicians

With 11 weeks at No. 1, Tones And I smashed a U.K. chart record that isn’t about to fall anytime soon.

“Dance Monkey” stands alone as the longest reigning song by a solo female artist on the Official U.K. Singles Chart, a glorious stretch in a marathon 116-week stint on the survey.

Tones’ career has been flying since “Dance Monkey” dropped into our lives in 2019. She’s landed two more titles on the U.K. chart, including 2021’s “Fly Away,” which just missed out on a Top 10 appearance, peaking at No. 11.

The Aussie singer and songwriter’s irrepressible chart leader was a monster on the airwaves, too.

Just three singles enjoyed more U.K. airplay in 2020 than “Dance Monkey,” according to Phonographic Performance Limited (PPL), the British neighbouring rights royalty collecting society, as it slotted-in behind hits from Dua Lipa, Ed Sheeran and Ariana Grande.

And for all those spins across U.K. radio stations, TV channels, and in offices, shops, bars, nightclubs, music venues and festivals across the country, Tones’ banked a sum that makes the eyes water.

For remuneration out of the U.K., the cheque is likely nought.

Tones isn’t alone. INXS, The Kid Laroi, AC/DC, Sheppard and countless other homegrown artists earn nothing from U.K. airplay of their works.

Likewise, Ed Sheeran, Dua Lipa and their countrymen and women earn zip from plays of their songs across the airwaves in the land Down Under.

Something is broken in the already-complicated world that is neighbouring rights, a growing sector that has left behind Australian and British musicians, and leaving them poorer for it.

The culprit? A breakdown in the alliance between Australia’s PPCA and the U.K.’s PPL, the national organisations that collect royalties from the airplay of the sound recording and distributes those sums to rights holders and performers.

For eight years, PPCA and PPL have operated without a reciprocal agreement.

No deal means no royalties.

It’s a fixable situation, and there’s a growing clamour in both countries to resolve it.

Tones And I

What are Neighbouring Rights?

NR is money that stems from the airplay of the sound recording, paid directly to contributors — the artists, musicians, producers on the sound recording. 50% goes to the contributors and the other 50% to the owner of the sound recording.

A songwriter receives money every time their composition is played on radio. The record company receives money every time their recordings are played on radio.

Where session musicians may earn a fee, the record company gets paid every time the recording is played.

In the world of neighbouring rights, when a performance is played on radio, all the musicians are paid, whether they’re featured or backing, programming or producing.

A typical $300 session fee “does not adequately compensate a musician,” notes Susan Cotchin, Managing Director of Good Neighbour, and an expert in this complicated field.

Where neighbouring rights exist, session musicians, producers and programmers can earn a solid full-time wage not only from session fees, but from being paid a royalty each time their performance receives airplay on radio.

For each recording this could amount to anywhere between $5,000 – $70,000 per/annum from the U.K. alone, according to data crunched by Good Neighbour, which joined the Mushroom Group fold in 2019.

“Add in Australia, play on a few tracks and our session musicians could be earning a decent living from being a full-time professional musician,” Cotchin notes.

Imagine then, over the next 20 years, every time a musician heads to a café or puts the radio on in their car — if they can afford one — while driving “to a shitty job, or at a club where thousands of people are jumping around to their voice or beats,” notes Cotchin, “they simply must accept they got $300 for that session, whilst the record company continues to suck up the royalties.

That’s the situation right now.

How did we get to this?

The U.K. stopped paying Australian performers in 2014. Prior to that, the U.K. paid Australians as we are a signatory to the Rome Convention (1961) which protects sound recordings (notably the United States did not sign the Rome Convention).

In 2014, however, the U.K. decided as Australia does not and has never paid U.K. performers, they should no longer be paying Australian performers.

Backing musicians, programmers, producers who may have played on big hits also miss out.

“It’s the COVID that hit our Australian industry in 2015, that nobody is talking about,” says Michael Chugg.

What’s the damage?

“Dance Monkey” or Sheppard’s “Geronimo” from 2015 would have resulted in the performers receiving no income out of the U.K. for their performances on these hits, equating to losses for the performers of between A$500,000 – $1,000,000, estimates Good Neighbour.

The hit British-Australian collaboration that is Elton John, Dua Lipa and Pnau’s “Cold Heart” will only see U.K. performance royalties delivered to Elton and Dua, while Pnau would not receive any money on their neighbouring rights as they are Australian and the track was recorded in the U.S.

Chugg, whose company Chugg Music represents Sheppard in several areas of their career, wants action.

“We talk about touring, employing Australians who work on the tours and the money it brings into Australia, but we need to have a conversation about our musicians,” he tells TMN.

 “There would be no tours without performers, and with less money from abroad flowing to our recording artists, there is little in the pot to support domestic tours.”

Also, he notes, international acts come to Australia “having had chart success and radio airplay and in turn we can sell out shows. But why are we not paying those international artists when they receive airplay in Australia? It does nothing to help the reputation of Australia’s music industry and our musicians suffer as this payment is then not reciprocated.”

This stalemate “impacts every sector of the industry from artists to artist management, indie labels and session musicians. The winners here are the majors when the performer can’t claim their share.”

What to do?

The reason why Australia doesn’t have a reciprocal right is based upon Australia’s accession to the WIPO Performances and Phonograms Treaty (WPPT), which occurred in 2007.

The devil is always in the detail, and in this specific case it has a number — 15.

Australia refrained from agreeing to Article 15 in the 1996 treaty, relating to the Right to Remuneration for Broadcasting and Communication to the Public.

That article states that “performers and producers of phonograms shall enjoy the right to a single equitable remuneration for the direct or indirect use of phonograms published for commercial purposes for broadcasting or for any communication to the public.”

And because of it, “equitable remuneration” does not appear in Australia’s Copyright Act, and artists like Tones will not receive neighbouring rights.

This also impacts many legacy acts like INXS, Savage Garden, AC/DC, Crowded House and others who, since, 2014 ceased receiving money out of the U.K. 

Gudinski and Good Neighbour

The late Michael Gudinski took the step to bring neighbouring rights into the Mushroom family to better understand it and the impact on the Australian industry. 

“Gudinski called me up one night as I was working late to tell me Chuggi, who’d I’d met with the previous day to discuss Sheppard and neighbouring rights for his acts, had good things to say and from there I was championed by both Michaels to pursue and evoke,” recounts Cotchin.

Good Neighbour has worked with Gang of Youths since 2017, and has expanded its client base to include the likes of Neil Finn and many U.S. artists including Zedd.

“I’m grateful to have a platform such as this to finally get this message across, for it to be heard,” notes Cotchin.

“It was important to Michael Gudinski and is important to Michael Chugg. It was a discussion on the table just prior to Gudinski’s passing so it’s now the perfect time, with a new government and to be through the lockdowns, to start screaming about this from the rooftops.”

Gang Of Youths

What next?

The free trade agreement between Australia and the U.K. creates an opportunity for discussion on “adequate” remuneration for performers and producers of recordings, notes Rod Davies, lecturer in popular music and songwriting at Monash University.

“If we truly value our musicians,” he explains, “adequate must be equitable.”

Sure, there’s nothing sexy about neighbouring rights, though there’s nothing less sexy than being poor.

All performers and record producers should “be having this conversation right now, engaging with other stakeholders and raising awareness,” writes Davies in The Conversation.

TMN has reached out to PPCA for comment on the status of its relationship with PPL, whether both parties are working towards an accord, or whether there are plans to.

“Unfortunately at this time it’s not an option for us or the PPL due to the U.K. government’s classification,” a spokesman explains.

If the Australian government and recording industry will acknowledge “the prevailing conditions for musicians globally and adopt the principle of equitable remuneration,” Davies continues, “we can begin rebuilding the structures that support payments to performers at home and overseas.”

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