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Girl listening to music streaming with headphones. Close up portrait.

Most people associate neighboring rights (NR) with radio/TV airplay royalties. Streaming income is often seen as belonging to the record labels’ domain. However, a growing number of NR collectives (most notably the artists-only-ones!) have been very successful in lobbying for a separate right for artists to receive streaming royalties directly. Many of the developments have been triggered by the local implementation of EU Directive 2019/0790, article 18 which recognizes the right for artists to receive a “appropriate and proportionate” remuneration for this type of exploitation. Although article 18 lays the foundations for the implementation of a mechanism improving the remuneration of artists, at the same time it leaves it up to the member states how to arrange this.In the next weeks, Zanoise will zoom in on where individual countries stand when it comes to artists’ individual remuneration for streaming. This week we are starting with Spain, definitely far ahead in this area.Since 2006, there has been an inalienable right in Spain for artists with regards to exploitation revenues linked to their recordings (article 108 of the Spanish Intellectual Property Law). When an artist signs a recording contract, it is presumed by Spanish law that the artist assigns the exclusive exploitation rights to the record label. However, the artist automatically retains an inalienable right to equitable remuneration with respect to the use of his recordings on radio and television as well online. This includes streaming platforms. The recording artists’ equitable remuneration can only be administered by a management collective, i.e. @AIE in case of Spain. In 2021, AIE collected an impressive amount of more than EUR 5.6 million from Spotify, Apple Music, Deezer, Google Play but also from audiovisual platforms like Netflix, Filmin and Movistar.

Artists tapping into streaming royalties!

Piano music pianist hands playing. Musical instrument grand piano details with performer hand on white background.

You will recall that further to the legal dispute between RAAP and PPI, the EU Court of Justice ruled that the application of Directive 2006/115/EC 6 does not allow member states to exclude non-EU rightsholders (e.g. US artists) from neighboring rights payments.Following the court’s decision, the Netherlands have changed their legislation thus enabling US artists to collect neighbouring rights going forward. In other countries legislation hasn’t been changed and thus the local collecting societies have not seen fit to change their distribution method. So materially almost nothing seems to have changed for US artists. However, in France some measures have been taken.According to French law only phonograms fixated in the European Union (and other countries which operate basically in the same way as France) are eligible for neighbouring rights remuneration. The result is that phonograms from the US are This arrangement leads to exclude from the benefit of this distribution, regardless of nationality, holders of rights who participated in the fixation of phonograms in third countries which are not parties to these conventions, or which have expressed reservations thereto.The equitable remuneration being collected, according to article L 214-1 of the CPI, on all the phonograms exploited in France, the sums received by Adami for the use of non-eligible phonograms are considered as “irredistributable” within the meaning of Article L 324-17, 2° of the CPI. They are allocated to the resources of the artistic action aimed at financing actions provided for in the first paragraph of Article L.324-17 of the Intellectual Property Code.However, given the uncertainty surrounding this allocation, a provision for the same amount has been counted. The sums concerned and provisioned in 2020 represented €6,311,789 and those provisioned in for the 2021 financial year, €4,848,062.

Adami holding reserve funds for US claims

Old typewriter with text that contains spelling mistakes, a concept

Data geeks can have a lot of fun browsing through the portals of performing right organisations (PRO’s). There, one can find works that have been registered, lists of unmatched works, lists of missing cue sheets and also files containing unidentified works.And if nobody identifies and corrects the mistakes, the monies collected for unidentified songs will be held for years until they are liquidated (or added as a lump sum to distributable amounts. Often songs end up on unidentified lists because of simple typos.Look for instance at the ways the name of the famous film/TV composer Alexandre Desplat is spelled in just one PRO file:ADESPLAT ADESPLAT ADISPLAT ALEXANDER DEPLAT ALEXANDER DESPLAT ALEXANDRE DESPALT ALEXANDRE DESPIAT ALEXANDRE DESPLANT ALEXANDRE DESPLAT J ALEXANDRE DESPLOT ALEXANDRE DEXPLAT ALEXANDRE PLAST ALEXANDRRE DESPLATSome misspellings, like DEXPLAT, look weird in first instance, but are easy to understand if you consider that on most computer keyboards the X and S are situated next to one another. This also applies to DESPLOT, where the O finds itself close to the P and L keys. Less logical is the N in DESPLANT as the N key isn’t close to any other keys used to type DESPLAT. Other mismatches are caused by the use of the composer’s first initial which is then merged with his last name.In cases like these one would expect the PRO’s to use string metrics in their matching processes, preferably at the point where the data enters the database. A basic script based on Jaro-Winkler’s metric would already deal with the most obvious mismatches and if machine learning technologies were added even bigger steps might be taken.Quite a nice business to be in for companies like Noctil, Winpure and others.

Metadata PRO's

Copyright Law, man writing on transparent screen

Zanoise Talent is again co-sponsoring <a data-mce-href="https://nysba.org/events/easl-music-business-and-law-conference-2022-session-one" href="https://nysba.org/events/easl-music-business-and-law-conference-2022-session-one" target="_blank" rel="noopener">NYSBA’s annual Music Business Law Conference.</a>During the conference, industry experts discuss a wide array of key music industry topics. During the webinar View from Washington DC top experts shed light on the most relevant developments in copyright legislation, amongst which the American Music Fairness Act. An extremely important law for artists and labels as it ensures they will get paid for regular airplay by US broadcasters.Interesting bycatch: they will also receive overseas neighbouring rights royalties!This has to do with the fact that foreign countries refuse to pay royalties for regular airplay to American artists and labels as long as the US don’t reciprocate this. The moment this changes, and the US do start paying airplay royalties, then the doors of the European CMOs will be opened for American artists and labels.Kudos to Marc Jacobson and Rosemarie Tully.

Zanoise co—sponsoring NYSBA’s 2022 Music Business Law Conference!

Asian girls waiting for the subway in the subway station

You may recall that the EU court ruled in September 2020 that the right to equitable remuneration under the EU Directive must be granted both to EU performers and record labels AND to those who are nationals of other WPPT signatories (the US are a WPPT-signatory).Following the court’s decision, the Netherlands have changed their legislation thus enabling US artists to collect neighboring rights going forward. However, in other countries neither copyright laws nor local distribution rules have changed, so materially US artists find themselves still in the same spot. However, looking more closely, one can notice some interesting things. In France, for instance, many millions of Euros have been set aside as a provision against claims, as it is still quite uncertain which direction things go.One possibility is that the French will be forced to compensate US rightsholders or change their copyright law in order to comply with the EU court ruling going forward. Another scenario (much, much preferred by the French CMOs and by many others) is that new pan-European legislation will be adopted so that the ruling essentially will be reverted and neighboring rights royalties will be reserved to artists from the EU and other countries who guarantee their artists the same protection levels.

US artists still waiting for EU neighbouuing rights royalties

African man with dreadlocks in glasses recording a song in a recording Studio

On February 1, 2021, Sony announced its acquisition of Kobalt subsidiaries AWAL and Kobalt Neighbouring Rights, once independent havens for artists. Sony’s press release primarily focuses on AWAL. Only at the very end it spends a few words on the neighboring rights (NR) side by saying its artists and The Orchard distributed labels will be able to partner with Kobalt Neighbouring Rights to capitalize on its infrastructure and collection network.The question is, will Sony artists indeed benefit? In some ways, yes, definitely. It may become easier for Sony artists to receive higher advances. However, on the flipside, Sony is likely to a tighter grip on artists and their careers now that it controls more money streams. This tighter grip may also become noticeable in more subtle mechanisms. Let’s take a look at the administration of NR for US artists.Bear in mind that by default US artists don’t qualify for NR at PPL (UK). By contrast, the US label they’re signed with is entitled to collect PPL royalties in full (in fact including the full artist share). Now, sometimes an American artist records a track outside the US and then that track will qualify at PPL. However, PPL will in that case require that the record label confirms this. Were the label to confirm the track has been recorded outside the US, they would lose 50% of their UK NR income for that track. So moneywise, there’s zero incentive for the label to confirm this. A truly independent NR agency would fight for its artist and turn to the label to have it list the track as recorded outside the US. Now, if this situation were to happen in case of a Sony artist, please raise your hand if you believe Sony’s NR division would take on Sony’s label and force them to accommodate the artist ……… No one??

Sony Artists better off with Kobalt acquisition?

Zanoise Talent

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Blog

Artists tapping into streaming royalties!

Adami holding reserve funds for US claims

Metadata PRO's

Zanoise co—sponsoring NYSBA’s 2022 Music Business Law Con...

US artists still waiting for EU neighbouuing rights royal...

Sony Artists better off with Kobalt acquisition?