III. Master Rights
3. Neighboring Rights
1. Performer vs. Master Owner Share
Neighboring rights are triggered when a song is publicly performed or broadcast (radio, TV, or public spaces like bars and gyms).
2. The Split: Who Gets Paid?
Similar to composition royalties, neighboring rights are split 50/50 between the “performers” on the recording and the “owner” on the recording.
The Performer Share (50%):
Featured Artists: The main artist(s) whose name is on the track.
Non-Featured Artists: Session musicians, backing vocalists, and orchestral players.
The Master Owner Share (50%):
This usually goes to the Record Label (or the Independent Artist if they own their masters).
Key neighboring rights societies:
| Country | Organization | Key Role |
| United States | SoundExchange | Collects digital performance royalties for rights owners and performers. Note: The US does not pay neighboring rights for terrestrial AM/FM radio. |
| United Kingdom | PPL (Phonographic Performance Ltd) | Collects for both owners and performers across radio, TV, and public venues. |
| Canada | Re:Sound | The umbrella organization that distributes to rights owners and performers. |
| Germany | GVL | One of the largest societies in Europe, handling complex splits for session musicians. |
| France | SPPF / SCPP | These primarily represent the producers/rights owners, while ADAMI and SPEDIDAM represent performers. |
| Australia | PPCA | Collects for rights owners and registered artists for public performance and broadcast. |
In the United States, FM/AM radio stations do NOT pay neighboring rights royalties. Only digital platforms (satellite radio, streaming) trigger SoundExchange collection. This is unique to the US and a handful of developing markets — most of the world does pay for terrestrial broadcast.
The Collection System
1. The Revenue Source:
In most of the world (excluding U.S. terrestrial radio), when a recording is played in public—on the radio, in a gym, or in a club—the law mandates that the performers and the rights owners must be paid. This is called Neighboring Rights because it “neighbors” the songwriting right.
2. The Collection Mechanism
Blanket Licenses: Just like PROs, these CMOs (e.g., PPL in the UK, Re:Sound in Canada, GVL in Germany) charge businesses a flat annual fee for the right to play any recording.
The U.S. Exception: In the U.S., SoundExchange is the primary CMO. However, they only collect for digital non-interactive play (SiriusXM, Pandora, iHeartRadio). They do not collect from FM/AM radio.
3. How They Pay You
Registration is Mandatory: CMOs do not know you exist until you register your ISRC codes and your performer profile with them.
Direct Pay: Unlike a record label which might “recoup” your expenses before paying you, many CMOs pay the performer’s share directly to the artist, bypassing the label entirely.
In 2026, many artists use a “Neighboring Rights Administrator” to collect these fees globally. Without one, your money might sit in a “Black Box” in a foreign country like France or Japan because your local society may not have a perfect data link with them.
This module transitions from the “automatic” world of royalty collection (where societies collect money for you) into the “proactive” world of licensing contracts.
Master Use Licensing is the gatekeeper of the actual sound recording. If the composition is the “recipe,” the Master is the “baked cookie”, and you need a specific license to take a bite of that cookie for your own project.