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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?

In almost all countries music copyright societies and neighbouring rights societies work separately from one another. In a way they compete, in that music users receive invoices both for the public use of compositions and recordings.However, in Brazil the situation is entirely different. Since 1973, there is just one entity (ECAD) that collects from music users for both types of rights whilst there are 7 main collectives, i.e. ABRAMUS, AMAR, ASSIM, SBACEM, SICAM, SOCINPRO and UBC (each of which are members of ECAD) which take care of the distribution of the monies collected by ECAD towards their members.The collectives may have slightly different internal workflows, but they all have to respect and abide by the rules voted on by themselves in general assemblies and enforced by ECAD. They all pay out monthly (less frequent in case of international distributions) and their administration fees are identical. With respect to royalty payouts, this is all dependent on the amounts collected and made available by ECAD as well as the timely claiming by the collectives. The competition between the collectives is in fact occurring at the level of royalty distributions and service. The costs charged by ECAD amount to 10% whilst the 7 collectives are allowed to charge another 5% for the work they do for their members. The higher the amount they distribute, the more fees they earn. Currently, the two biggest collectives are ABRAMUS and UBC.

Meanwhile, in Brazil...

Garbage black bag background. Pile of black bin bag for garbage, Trash black bag.

Just a way of saying that incorrect or low quality (data) input will always produce poor output. Well, data geeks can discover quite some garbage browsing through the portals of performing right organizations (PROs). Sinde the portals one can find works that have been registered, lists of unmatched works, lists of missing cue sheets and also files containing unidentified works. 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 lumpsum to distributable amounts). Often songs end up on unidentieds 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 PROs 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&nbsp;<a href="https://www.linkedin.com/company/noctil---an-enterprise-mobile-application-platform/" data-attribute-index="0" data-entity-hovercard-id="urn:li:fs_miniCompany:2519301" data-entity-type="MINI_COMPANY" data-mce-href="https://www.linkedin.com/company/noctil---an-enterprise-mobile-application-platform/">Noctil&nbsp;</a><a href="https://www.linkedin.com/company/verifimedia/" data-attribute-index="2" data-entity-hovercard-id="urn:li:fs_miniCompany:7945990" data-entity-type="MINI_COMPANY" aria-expanded="false" aria-controls="undefined" data-mce-href="https://www.linkedin.com/company/verifimedia/" data-mce-tabindex="-1">Verifi Media</a>&nbsp;<a href="https://www.linkedin.com/company/winpure/" data-attribute-index="4" data-entity-hovercard-id="urn:li:fs_miniCompany:2149782" data-entity-type="MINI_COMPANY" data-mce-href="https://www.linkedin.com/company/winpure/">WinPure™</a>&nbsp;and others.<a href="https://www.linkedin.com/feed/hashtag/?keywords=musicindustry&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520" data-attribute-index="6" data-mce-href="https://www.linkedin.com/feed/hashtag/?keywords=musicindustry&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520">#musicindustry</a>&nbsp;<a href="https://www.linkedin.com/feed/hashtag/?keywords=metadata&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520" data-attribute-index="7" data-mce-href="https://www.linkedin.com/feed/hashtag/?keywords=metadata&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520">#metadata</a>&nbsp;<a href="https://www.linkedin.com/feed/hashtag/?keywords=masterdatamanagement&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520" data-attribute-index="8" data-mce-href="https://www.linkedin.com/feed/hashtag/?keywords=masterdatamanagement&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520">#masterdatamanagement</a>&nbsp;<a href="https://www.linkedin.com/feed/hashtag/?keywords=copyright&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520" data-attribute-index="9" data-mce-href="https://www.linkedin.com/feed/hashtag/?keywords=copyright&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520">#copyright</a>&nbsp;<a href="https://www.linkedin.com/feed/hashtag/?keywords=neighboringrights&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520" data-attribute-index="10" data-mce-href="https://www.linkedin.com/feed/hashtag/?keywords=neighboringrights&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520">#neighboringrights</a>&nbsp;<a href="https://www.linkedin.com/feed/hashtag/?keywords=neighbouringrights&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520" data-attribute-index="11" data-mce-href="https://www.linkedin.com/feed/hashtag/?keywords=neighbouringrights&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520">#neighbouringrights</a>&nbsp;<a href="https://www.linkedin.com/feed/hashtag/?keywords=zanoise&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520" data-attribute-index="12" data-mce-href="https://www.linkedin.com/feed/hashtag/?keywords=zanoise&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6895028034399723520">#zanoise</a>

Garbage in, garbage out (aka GIGO)

<a href="https://www.linkedin.com/company/recorded-artists-actors-performers?trk=public_post_share-update_update-text" rel="nofollow" data-tracking-control-name="public_post_share-update_update-text" data-tracking-will-navigate="" data-mce-href="https://www.linkedin.com/company/recorded-artists-actors-performers?trk=public_post_share-update_update-text">Recorded Artists Actors Performers (RAAP)</a>&nbsp;and PPI (Irish labels’ collective) have been in a legal war for years now. In Ireland, PPI collects all neighboring rights remuneration on behalf of performers and labels. RAAP receives from PPI the royalties due to performers. In accordance with Irish copyright law, RAAP has always paid out to artists who recorded in a Rome Convention (RC) country or are RC citizens. However, PPI also collects royalties for non-qualifying (e.g. US) recordings and 100% of these monies have traditionally been paid by them to record labels (rather than 50% to the record label and 50% to RAAP). RAAP at some point contested this stating any performer shares (including for US tracks) should be paid to RAAP rather than the record label. PPI having everything to lose and nothing to gain dug its heels in the sand. The lawsuit that followed travelled from the Irish Courts to the EU Courts and back to the Irish Courts. All cases proved PPI wrong. However, PPI refused to give up and last week there was another session, this time in the Irish Court of Appeal. Again, PPI didn’t get their way. Instead, the court in fact upheld previous rulings that the right to equitable remuneration under EU legislation 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). Further it was confirmed once again that both artists and record labels should share in neighboring rights income. It is more than likely that PPI as a last ditch effort will go to Ireland’s Supreme Court. Perhaps it hopes to drag the legal process until new EU legislation (currently lobbied for) will reverse the EU court’s ruling on neighboring rights. Bear in mind the Irish copyright law has still not been changed to reflect the EU court’s rulings, so it seems US artists will have to wait before getting paid Irish neighboring rights monies.&nbsp; More info: <a href="https://lnkd.in/eceRFPHi?trk=public_post_share-update_update-text" rel="nofollow" data-tracking-control-name="public_post_share-update_update-text" data-tracking-will-navigate="" data-mce-href="https://lnkd.in/eceRFPHi?trk=public_post_share-update_update-text">https://lnkd.in/eceRFPHi</a>&nbsp;<a href="https://www.linkedin.com/login?session_redirect=https%3A%2F%2Fwww%2Elinkedin%2Ecom%2Ffeed%2Fhashtag%2Fmusicindustry&amp;trk=public_post_share-update_update-text" rel="nofollow" data-tracking-control-name="public_post_share-update_update-text" data-tracking-will-navigate="" data-mce-href="https://www.linkedin.com/login?session_redirect=https%3A%2F%2Fwww%2Elinkedin%2Ecom%2Ffeed%2Fhashtag%2Fmusicindustry&amp;trk=public_post_share-update_update-text">#musicindustry</a>&nbsp;<a href="https://www.linkedin.com/login?session_redirect=https%3A%2F%2Fwww%2Elinkedin%2Ecom%2Ffeed%2Fhashtag%2Fneighboringrights&amp;trk=public_post_share-update_update-text" rel="nofollow" data-tracking-control-name="public_post_share-update_update-text" data-tracking-will-navigate="" data-mce-href="https://www.linkedin.com/login?session_redirect=https%3A%2F%2Fwww%2Elinkedin%2Ecom%2Ffeed%2Fhashtag%2Fneighboringrights&amp;trk=public_post_share-update_update-text">#neighboringrights</a>&nbsp;<a href="https://www.linkedin.com/login?session_redirect=https%3A%2F%2Fwww%2Elinkedin%2Ecom%2Ffeed%2Fhashtag%2Fartists&amp;trk=public_post_share-update_update-text" rel="nofollow" data-tracking-control-name="public_post_share-update_update-text" data-tracking-will-navigate="" data-mce-href="https://www.linkedin.com/login?session_redirect=https%3A%2F%2Fwww%2Elinkedin%2Ecom%2Ffeed%2Fhashtag%2Fartists&amp;trk=public_post_share-update_update-text">#artists</a>&nbsp;<a href="https://www.linkedin.com/login?session_redirect=https%3A%2F%2Fwww%2Elinkedin%2Ecom%2Ffeed%2Fhashtag%2Fzanoise&amp;trk=public_post_share-update_update-text" rel="nofollow" data-tracking-control-name="public_post_share-update_update-text" data-tracking-will-navigate="" data-mce-href="https://www.linkedin.com/login?session_redirect=https%3A%2F%2Fwww%2Elinkedin%2Ecom%2Ffeed%2Fhashtag%2Fzanoise&amp;trk=public_post_share-update_update-text">#zanoise</a>

RAAP vs PPI: another win for performers, but war isn’t over yet

selective focus silhouette photography of man playing red-lighted DJ terminal

On July 29th 2021, <a data-mce-href="https://www.musicbusinessworldwide.com/in-china-a-virtual-artist-has-signed-to-a-major-record-company-is-this-a-sign-of-the-future/" href="https://www.musicbusinessworldwide.com/in-china-a-virtual-artist-has-signed-to-a-major-record-company-is-this-a-sign-of-the-future/">Music Business Worldwide</a> wrote that Whet Records, Warner Music Group‘s pan-Asian dance label in China, signed a record deal with the artist Ha Jiang. So …… what’s so interesting about that? Well, just like the world famous Lil Miquela, Ha Jiang is a virtual pop artist/influencer. We assume the record deal has actually been signed by the company who invented her and no doubt the relevant recording royalties (Spotify, Youtube, Tiktok etc.) will flow into their accounts. However, what about the neighbouring rights? Generally, when a recording is played in public, the artist and record company split the neighboring rights royalties due.Now, in the case of Ha Jiang’s recordings, there’s no problem regarding the record company’s share. But is there an artist’s share to be collected, and who would be entitled to it? Obviously, Ha Jiang is not a real person and can’t collect any neighboring rights royalties. So it would have to be the company behind Ha Jiang. However, in most legislations artist neighboring rights are regarded as strictly personal and can’t be assigned to third parties. So in that case, the individuals creating Ha Jiang’s performances would have to step forward and claim the artist share. That may not be too smooth a process. Would be interesting to explore.

Ha Jiang: a real performer?

More and more, investors in music rights are including royalty streams in their acquisitions, a tendency not exactly embraced by record companies and music publishers. Earlier this year Universal said it is no longer accepting Letters of Direction redirecting artist and writer royalties to investors. Definitely a bummer for music investment funds.When it comes to the acquisition of neighboring rights royalties there are some additional elements to consider. Most jurisdictions outside the US do not accept an outright sale of neighbouring rights royalties, let alone a sale of the underlying rights. In most countries artists’ neighboring rights are seen as unalienable, unwaivable rights personal to the artist.Now, in practice catalog buyers deal with this by simply leaving the artist’s existing membership(s) in place and imposing a continuous obligation for the artist to sign certain forms (such as a letter of direction) as and when needed. However, the situation changes once the artist dies, because then the relevant collecting society will want to ascertain who the rightful heirs are.<h2>Artist’s neighbouring rights</h2>In some jurisdictions the verdict will be that the sale of an artist’s neighbouring rights must be considered null and void, and as a consequence such rights will fall into the artist’s estate. In that case the relevant collecting society will want to see the artist’s last will and testament or (if s/he died intestate) a probate outlining who should represent the estate towards the collecting society.Although in most cases this can still be fixed, anyone having dealt with an estate’s neighboring rights vis-à-vis a collecting society knows it’s a big, big hassle.

Buying neighbouring rights: asset or burden?

Zanoise Talent

music rights

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