Neighbouring Rights: what’s all that about? [explainer]
There’s been a lot of discussion about neighbouring rights recently, after Tones and I signed an international neighbouring rights deal with Kobalt.
And while it might sound like her music will be scoring the next Karl Kennedy affair, it’s actually a lot more simple – and more complicated – than it may seem.
Put simply: neighbouring rights relate to the public broadcast of a sound recording. If your song is played in American Apparel, blasted out of the speakers at Franklins, on regular rotation at your local Sizzler, or played on 2BE or Fly TV – you are entitled to a royalty payment.
Copyright for a song exists in two separate forms: the composition itself (music, lyrics) and the actual sound recording. Neighbouring rights deals only with the latter – the actual sound recording – and its public broadcast, which covers off retail, restaurants and nightclubs, broadcast media (TV, on-demand TV, etc.), and all forms of radio – digital, online, and that little box thing in the common room at your grandfather’s retirement home.
So, these royalties are collected and distributed in Australia by the PPCA, which is a fairly streamlined process. But it’s the international collection that gets a little murky.
As APRA AMCOS points out, over eighty countries pay neighbouring rights to artists, and all of these pay different rates, based on different criteria. America, for example, doesn’t pay anything if your song is played in the club, the mall, or the Shake Shack. They don’t even put the ‘u’ in the word ‘neighbouring’, which is insane.
Some countries pay a rate based on the nationality of the artist. Some pay based on the country in which the recording copyright is held. Some pay based on where the actual recording was made. Some have different trade sanctions with other countries, where what they pay is based on what – or whether – we pay. This leads to all kinds of issues that can really only be avoided if you have a clear understanding of the different structures for neighbouring rights in each of these 80 countries. And who has time for that?
On top of learning eighty different rights structures, you also need to provide each collection society with information on each musician on each recording, and how they contributed to it. Even those who aren’t officially credited on a recording (hard to trace these day) can be eligible for a cut of neighbouring rights in certain territories if they as much as contributed a sound to a recording – meaning if your mate Brett did the count in for your song, Brett may soon be swimming in pesos.
Plus you need to split these with the rights holder for the recording, which is usually your record label. Each performer and the rights holders get separate cuts – again based on each country’s own unique way of divvying things up.
It’s exhausting, and it’s boring. So my advice is to get someone else to do this administration headache for you, so you can get back to doing the work of a true musical artist: tetrising those amps, guitars, and drum heads into the back of your Mum’s Mazda without damaging the plush interior. It’s an art form in itself.