Like a Good Neighbor, the IAFAR is there

Setting the Scene 

In 1961, the U.S. opted out of the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, better known as the Rome Convention, which produced a treaty establishing neighboring rights as law for its signatories. 

Neighboring rights provide a revenue stream for featured performers and session musicians in the form of royalties when their recorded works are publicly performed through terrestrial radio broadcasting. 

Therefore, it’s incredibly important for recording artists, as well as record labels, entertainment lawyers and many others involved, to be aware of neighboring rights and the royalties these parties could easily be missing out on. However, many of those most affected by neighboring rights or the lack thereof have never heard of them before, leaving a potentially large income stream untapped. 

Along comes IAFAR 

This is where the Independent Alliance For Artist’s Rights (IAFAR) comes into the picture.

IAFAR formed in 2018 to: 

• Advocate for an optimized system to effectively collect artists’ neighboring rights royalties owed to them through collaboration with CMO’s (Collection Management Organizations, who are the collectors and distributors of royalties. There is a unique collection society in every country and an artist must register their music with each individual collector to receive the royalties they are entitled to from each country) 
• Educate those who are entitled to these royalties 
• Cultivate a community around the topic to raise awareness and understanding of what neighboring rights are

According to IAFAR’s website, “Neighboring Rights are the rights related to the public performance of master recordings. Literally, Neighboring Rights sit beside, or neighbor the composition copyright of a work.” They are also referred to as Related Rights. 

This means that the musicians who are featured on the recording of a song that’s played on the radio in a contracting country get paid for the performance of the recording in addition to the royalties that are paid to the songwriter(s) for the use of the composition, the latter of which are known as mechanical royalties. Sometimes the songwriter and the recording artist the same person, but often they’re not. 

Why is this important to artists today? 

Because of opting out of the treaty at the Rome Convention, the U.S. government does not recognize neighboring rights, meaning U.S. terrestrial radio stations do not pay these royalties to recording artists, even though these rights are currently recognized in 95 other countries. 

According to Neils Teves, Co-CEO of Fintage House, including neighboring rights could potentially “double the size of the U.S. annual market.” 

Neighboring rights have often been overshadowed by the world of publishing rights, which ensure royalties are paid to labels and songwriters for the use of their compositions. The rise of satellite and digital sound recording income from sources such as SoundExchange has increased awareness to the fact that this income stream exists. 

“The relative obscurity of such an important revenue source made us all vulnerable and enabled CMO’s to remain unchecked as regards rules and regulations that range from unfair to unlawful,” according to IAFAR’s website. 

Reciprocity 

American musicians and labels are not the only ones affected. Since the U.S. doesn’t pay recording artists royalties when their works are played on terrestrial radio (this doesn’t include streaming platforms like Sirius XM, Spotify, or Pandora), this means artists from neighboring rights-contracting countries are not paid either when their songs are played on U.S. radio stations. 

This discrepancy between contracting and non-contracting countries has led us into the murky waters of reciprocity — because the U.S doesn’t pay foreign recording artists from contracting countries for terrestrial radio play in the U.S., many of these countries reciprocate by not paying U.S. recording artists for public radio broadcast within their own borders. 

Get up, stand up, stand up for your neighboring rights 

The “Fair Play Fair Pay” act was introduced to Congress in February 2017 to create provisions for recording artists to receive royalties paid by terrestrial radio stations in addition to the mechanical royalties paid to songwriters but failed to pass. Although some of its more minor elements were included in the Music Modernization Act of 2018, this primary provision was left out and there has been no legislation since to open this revenue stream to U.S. recording artists. 

However, according to article 5 of the treaty from the Rome Convention, artists from non-contracting countries are sometimes entitled to their neighboring rights royalties (depending on the contracting country) if any of the following apply: 

• The song was recorded in a contracting country
• It was released in a contracting country within 30 days after its release in a non-contracting country, which qualifies it as a “simultaneous release” 
• The song features performers or is produced by someone from a contracting country 
• The record label is based in a contracting country

Neighboring rights represent a large amount of potentially untapped income or, in the case of musicians from the U.S. and other non-contracting countries, unavailable income from the performance of their recordings on terrestrial radio, though it could be tapped into via the conditions listed above. IAFAR is working to enlighten the necessary segment of the music community on the nuances of NR through online and in-person workshops available to its members and tackling worldwide issues affecting neighboring rights legislation. 

Who knows, maybe in time IAFAR will help bring about legislation in the U.S. to recognize neighboring rights, thus injecting a much-needed monetary infusion into the music industry that directly benefits the artists who built it. At least they’re building a community and raising awareness, which is the prerequisite to action. As they state in their mission statement, "Individually, we might not have much of a voice. Together, we speak loud enough for everyone to hear.”