Your record is playing in a café in Lisbon right now. The barista has it on the speakers. The shop pays a small monthly fee for the right to play recorded music in public. That money goes somewhere. The question is whether any of it reaches you.
If you’re an American artist and you have never heard of neighboring rights, the answer is probably no.
Neighboring rights are one of the most misunderstood and overlooked royalty streams in music. They generated $2.9 billion globally in 2025, up for the fifth consecutive year. And there is a fair chance some portion of them belongs to you, sitting unclaimed in a foreign collection society because no one ever registered your recording to find it.
This guide covers what neighboring rights are, how they differ from performance royalties, who collects them, why the United States stands apart, and how to make sure you’re claiming yours.
What Are Neighboring Rights?
What are neighboring rights in music? They are the public performance royalties paid to the sound recording side of a song.
Every song has two copyrights:
- The composition is the song itself: melody, lyrics, structure.
- The sound recording is the specific performance captured on tape, the master.
These are separate legal objects, owned by different people, and they generate different royalties.
The name confuses people. It has nothing to do with neighboring countries. The term refers to the fact that the right "sits next to" the composition's performance right in copyright law. Some countries call them related rights. The principle is the same.
When a sound recording is broadcast on radio, streamed on a non-interactive service, played in a bar, or pumped through a department store's speakers, the people who made that recording are owed something. Songwriters get paid for the song. Performers and master owners get paid for the recording. Two payments. Two rivers. One performance.
How Neighboring Rights Differ from Performance Royalties
The confusion here is structural, and it costs artists money.
Performance royalties go to the composition side. They are collected by Performing Rights Organizations: ASCAP, BMI, SESAC, and GMR in the United States; PRS for Music in the UK; SACEM in France; GEMA in Germany. The money flows to songwriters and publishers.
Neighboring rights royalties go to the recording side. They are collected by Collective Management Organizations (CMOs): SoundExchange in the U.S., PPL in the UK, GVL in Germany, SENA in the Netherlands. The money flows to recording artists, session musicians, and master owners.
A single broadcast triggers both. When a French radio station spins a track by an English band, the songwriters get paid through SACEM on the composition side, and the performers and master owner get paid through SCPP or SPPF on the recording side. Two paths. Two checks. Write the song and own the master? Both are yours.
Who Earns Neighboring Rights Royalties?
Three groups have a claim:
- Featured performers: The lead artist whose name goes on the record. The vocalist, the band leader, the named act.
- Non-featured performers: Session musicians, backing vocalists, the players whose names appear in the fine print of the credits.
- Master recording owners: Usually the label. Sometimes the artist, if they own their masters. Sometimes a publisher or investor who bought in.
The typical split in most international markets is 50/50 between performers and master owners. Of the performer share, featured artists generally take the larger slice (often around 80%, depending on the jurisdiction), while non-featured performers take the rest.
The session musician who played on a Top 40 hit in 1982 has a small but real claim if that recording is still being broadcast in 2026. Many of them never collect it. The systems exist. The registrations don’t.
Why the U.S. Is Different
The United States has a peculiar position in international music copyright. It’s one of the few major economies on Earth that doesn’t pay neighboring rights royalties for terrestrial AM/FM radio.
Iran doesn’t pay them. North Korea doesn’t pay them. The United States, the world's largest recorded music market, doesn’t pay them either.
Historical Background: The Rome Convention
The reason is historical. In 1961, a group of countries gathered in Rome to sign the Rome Convention, which established performers' and producers' rights as a matter of international law. The treaty now has more than 90 signatories.
The United States isn’t among them. American broadcasters argued, and continue to argue, that:
- Playing a record on the radio is free promotion for the artist
- Artists should thank them rather than charge them
The argument made some sense in 1961, when AM/FM radio was the dominant discovery engine. It makes considerably less sense in 2026.
The Digital Carve-Out
The U.S. did sign the 1996 WIPO Performances and Phonograms Treaty, which covers digital. That distinction created the modern American carve-out:
- Non-interactive digital streaming pays neighboring rights royalties
- Terrestrial radio doesn’t
This is why SiriusXM, Pandora's radio mode, and webcasters generate royalties for recording artists in the United States, and why iHeart's FM stations don’t. The technology is similar. The legal treatment isn’t.
Legislative Efforts: American Music Fairness Act
Several pieces of legislation have tried to close this gap. The current effort is the American Music Fairness Act, reintroduced in January 2025 by Senator Marsha Blackburn and Representative Darrell Issa. It would establish a performance right for sound recordings on AM/FM radio and bring the U.S. into rough alignment with the rest of the world.
The bill cleared committee in a prior Congress and has been pending in one form or another for nearly two decades. Whether this Congress finally passes it remains an open question.
Who Collects Neighboring Rights?
Every country with neighboring rights music protection has at least one CMO. The major ones:
- SoundExchange (United States): the sole organization designated by Congress to collect digital performance royalties under the Section 114 statutory license. Since 2003, it has distributed more than $12 billion. It also handles international collection for U.S. performers and rights holders through reciprocal agreements with more than 90 foreign CMOs, covering 91% of the global neighboring rights market.
- PPL (United Kingdom): the largest single-market neighboring rights organization in the world. PPL collected £301 million in 2024, the highest in its ninety-year history, and operates 113 agreements across 52 countries.
- GVL (Germany), SCPP and SPPF (France), SENA (Netherlands), SIAE (Italy), Gramo (Norway), STOART (Poland), and dozens more, each running its own territory and exchanging data with peers.
The international system is a web of reciprocal agreements. Foreign CMOs collect on behalf of U.S. artists and route the money to SoundExchange. SoundExchange collects on behalf of foreign artists playing on American digital platforms and routes the money out. The WIPO directory of collective management organizations is the closest thing to a single international index.
The mechanics are bureaucratic, the data exchange is imperfect, and the gaps are real. An American artist whose music is played in a German bar is paid by GVL through SoundExchange if both organizations have correctly matched the recording to the artist. Often they haven’t.
How to Collect Your Neighboring Rights Royalties
If you have recorded music being played in public anywhere in the world, you need to register. Here are the steps:
- Register with SoundExchange: This covers your U.S. digital performance royalties and gives you a pathway into the international system.
- File an International Mandate: SoundExchange members can authorize the organization to collect on their behalf from its foreign partners. Without this step, your foreign collections sit in unmatched pools.
- Get your metadata right: This is where most money goes missing. Wrong ISRC codes. Misspelled artist names. Incomplete performer credits. Missing label codes. Each error breaks a link in the chain. The recording plays in Spain. The CMO collects from the broadcaster. The CMO tries to match the recording to a registered performer. The match fails. The money sits. After a few years, it’s forfeited.
- Register your sound recordings, not just yourself: ISRC codes (International Standard Recording Codes) are how recordings are identified globally. Every track you have ever released should have one, and it should be tied back to you in the CMO's database.
The most common mistakes that cost artists money: failing to register session work, forgetting to update credits after a band lineup change, not filing the International Mandate, assuming that signing with a label means the label collects everything, and not realizing that some neighboring rights collections require a separate claim entirely.
The defaults aren’t in your favor. The money doesn’t arrive unless you ask for it.
How Big Is the Neighboring Rights Market?
According to the IFPI Global Music Report 2026, performance rights revenue from sound recordings reached $2.9 billion globally in 2025, growing 0.3% year-over-year. That’s the fifth consecutive year of growth and roughly 9% of total recorded music revenue.
The number has held remarkably steady around $2.9 billion even as streaming has exploded, because most neighboring rights income comes from broadcast, public performance, and non-interactive digital, none of which scale with on-demand streams.
The figure also tracks only what gets paid out. It doesn’t include what was collected and never matched to a recipient. That unmatched pool is meaningful and is one of the more durable inefficiencies in the music business.
What You Can Do With Your Neighboring Rights Income
If you’re earning neighboring rights royalties, that income is part of your catalog's value. It compounds quietly, year after year, often outliving careers and sometimes outliving the artists themselves. A track recorded in 1985 that is still played on broadcast radio in Europe is generating money in 2026. That cash flow has a present value. It can be sold.
Royalty Exchange lets you sell a portion of your future royalty income and raise money on your terms. You choose what to sell. You keep earning on the rest. You never give up ownership of the underlying work. Investors get a piece of the future cash flow. You get the cash now. Both sides of the marketplace get what they came for when the asset is real.
If you’re sitting on a catalog generating neighboring rights royalties, you own something most people don’t realize is worth anything until they go to sell it. The market exists. The buyers exist. The only question left is what your share is worth.
Neighboring rights are just one piece of your catalog's value. Want to know what the whole picture looks like? See what your catalog is worth →
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