Neighboring Rights: The Royalties Performers Often Miss

The short version

Neighboring rights are performance royalties owed to the people who made a recording, meaning the featured performers and the master owner, when that recording is broadcast or publicly performed. They are separate from the composition royalties songwriters collect through a PRO. A lot of this money goes uncollected, because it is easy to miss, fragmented across countries, and, for US artists, limited at home. Specialist neighboring rights agencies exist to register you worldwide and collect it on your behalf. If you perform on recordings that get played, this is money worth chasing.

What neighboring rights are

Every recorded song is two things: the composition (the song) and the master (the specific recording). When a recording is played publicly, the master can earn a performance royalty of its own, paid to the performers on it and to whoever owns it. These are neighboring rights, so called because they sit next to the composition copyright.

In keysig's picture of the collection system, there are three collective management organizations (CMOs): a PRO collects performance royalties on the composition, the MLC collects mechanical royalties on the composition, and a neighboring rights organization (NRO) collects neighboring rights on the master. Neighboring rights are the NRO's slice, and only the NRO's. Your PRO will never pay them to you, because they are not composition money.

Why so much of this money goes uncollected

Neighboring rights are among the most under-collected royalties in music, for a few reasons:

• They are easy to miss. Many performers know about PRO registration but have never heard of neighboring rights, so they never register to collect them.
• They are fragmented across countries. Each country's NRO collects within its borders, so being owed money in ten countries can mean ten separate registrations. Money you never registered for tends to sit unclaimed.
• The US system is limited. In the US, SoundExchange collects neighboring rights only for certain digital and satellite radio; ordinary AM/FM radio pays nothing on the master. Meanwhile many other countries pay neighboring rights on regular broadcast, so a US performer can be owed real money abroad with no obvious signal that it exists.
• Session players forget. Even work-for-hire session musicians usually keep the right to collect their neighboring rights as performers, and a large amount of that goes unclaimed simply because no one registered.

Where a neighboring rights agency comes in

Registering yourself with every relevant NRO around the world, tracking what each one owes, and claiming it is a lot of work. This is the gap that specialist neighboring rights agencies fill. A neighboring rights collection agency (sometimes called a neighboring rights administrator) registers you and your recordings with NROs across multiple territories, tracks where your recordings are performed, and collects and remits the royalties to you, taking a percentage as its fee.

In the US you can and should register directly with SoundExchange as your NRO, which is free. Beyond that, a global neighboring rights agency is how many performers capture the international share, because it handles the many-territories problem for you. There are several such companies; the point here is the category, not any single provider. As with any deal that takes a percentage of your income, read the terms, understand the commission, and check what territories and rights it covers before signing.

Are you owed neighboring rights?

You are a candidate if you are a featured performer on recordings that get played, or you own masters that get played, especially through digital or satellite radio in the US or through broadcast and public performance abroad. Session and backing performers are often owed too. If any of that is you, the practical steps are: register with your home NRO (SoundExchange in the US), and if your recordings get meaningful play internationally, look into a neighboring rights agency to collect the rest. For the wider picture of how this fits with foreign PROs, see the guide to collecting royalties abroad, and for where neighboring rights sit among all the royalty types, see how music royalties work.

How keysig helps

keysig is not a collection agency and does not collect neighboring rights for you. What keysig does is keep the ownership record clean underneath: agreements and split sheets that establish who performed on and who owns each master, with the PRO, NRO, and IPI details that any collector will ask for. When a neighboring rights agency or an NRO needs to know who is owed what, clean documentation is what lets the money reach the right people. That groundwork is keysig's part.