“Music Business 101: Neighbouring Rights”

By Ronja Döring on Wed, 07/28/2021 - 19:17

What are Neighbouring Rights?

Elsewhere in the world Neighbouring Rights may also be referred to as Needletime Income in Africa or Leistungsschutzrechte in Germany.

An often-overlooked revenue stream, Neighbouring Rights accounted for $2.6 billion in 2019. Now more than ever, performers are seeking additional, previously unclaimed income.

Remember, Neighbouring Rights Income does not refer to income collection from Neighbouring Countries. The term, rather, is derived as the “neighbour” to the recording or composition rights. This right protects the actual performers and those who have contributed to the musical sound recording: i.e the singers, the backing vocalists, the session players etc. It does not relate to publishing nor regular record sales income.

Collection Management Organisations like PPL in the UK, SAMPRA in Southern Africa, SENA in the Netherlands and GVL in Germany facilitate the licensing and collection of such royalties on behalf of repertoire owners and performer members.

In most territories, it is standard practice for 50% of Neighbouring Rights Royalties collected to be paid to the repertoire owner (in many cases, represented & collected by Paradise Worldwide), and the remaining 50% to be paid to the performers (in most cases, the artist).

Where do these royalties come from? And how are they collected?

Neighbouring Rights societies issue licenses to radio & TV broadcasters, live music venues, and satellite and internet radio stations. Any time your music is performed in any one of these scenarios, a royalty is triggered and collected by the relevant society on behalf of labels and performers.

Let’s imagine your label controls the rights on a massive song called “Coffee Cup” by a famous artist called Milky Bar. “Coffee Cup” gets played all over the world on Top 40 radio stations several times a day over a 12 month period. The radio stations pay a licensing fee to the Neighbouring Rights society in their respective countries and submit cue sheets or radio reports to these societies which includes the spins that “Coffee Cup” received.

Let’s say $10 000 dollars was collected by the society:  $5000 gets paid to the repertoire owner of the sound recording (usually the label or distributor), and the remaining $5 000 will be paid out to the performers who physically performed on the track itself: namely Milky bar, the bassist, drummer, keyboard player and you! The splits of the remaining $5000 are dictated by the rules and guidelines in each territory.

Paradise collects Neighbouring Rights income from more than 50 territories around the world. Paradise Worldwide is pleased to offer collection of these royalties on behalf of repertoire owners.

We offer:

  • Global Collection with most Neighbouring Rights Societies
  • Retroactive collection (up to 4 years in some territories)
  • Simplified, uncomplicated metadata registration.
  • Dispute and Conflicts management
  • Itemised reporting in quarterly statements.
  • Handbooks for performers to collect their shares.

For a full list of societies from which we collect, please click here.

For more on Paradise Worldwide’s Neighbouring Rights Service, please contact your label manager.

For FAQs related to other Non-Record Income Rights, please click here.