Everything You Need to Know About Music Royalties

Neighboring rights royalties are payments made to the owners of sound recordings and performing artists when their recordings are publicly performed or broadcast. This includes radio, internet streaming services, television, cable music channels, cinemas, public spaces, and businesses. Neighboring rights royalties are distinct from performance royalties, which are paid to songwriters and publishers when their compositions are performed or broadcast.

• Neighboring rights laws vary from country to country, but they typically cover the following:
• The right to reproduce a sound recording
• The right to communicate a sound recording to the public
• The right to broadcast a sound recording
• The right to rent or lend a sound recording to the public
• The right to make a sound recording available to the public online

Neighboring rights royalties are collected by neighboring rights collection societies, which are organizations that represent the interests of sound recording owners and performing artists. These societies collect royalties from businesses that use sound recordings, such as radio stations, streaming services, and nightclubs. The royalties are then distributed to the sound recording owners and performing artists based on the number of times their recordings are used.

Neighboring rights royalties are an important source of income for sound recording owners and performing artists. In 2021, neighboring rights royalties collected by collection societies around the world totaled over $3 billion.

Here are some examples of how neighboring rights royalties are generated:

• When a radio station plays a song, the radio station pays a royalty to the neighboring rights collection society.
• When a streaming service like Spotify or Apple Music streams a song, the streaming service pays a royalty to the neighboring rights collection society.
• When a television show uses a song in its soundtrack, the television network pays a royalty to the neighboring rights collection society.
• When a nightclub plays music for its patrons, the nightclub pays a royalty to the neighboring rights collection society.