Label Keeps All Neighboring Rights - Traps & Scams Every Musician Must Avoid

If you ever signed a record deal and later felt like your money went into a black hole, this is the article that will make your contract paranoia useful. Neighboring rights are one of the sneakiest revenue streams labels love to hoard. You will learn what neighboring rights are, why labels try to take them, how to spot deadly contract language, and how to fight back like a boss. Expect real world examples, practical scripts you can use when negotiating, and a survival checklist that will stop you from getting played.

This is for millennial and Gen Z artists who want more than viral clips. You want money that actually shows up in your bank account. You want clarity. You want options. And you want to laugh at the corporate nonsense while you reclaim your cash. Let us get ridiculous and very useful.

What Are Neighboring Rights Anyway

Neighboring rights are the rights in a sound recording that sit next to the copyright in the recording itself. In plain English they are the rights performers and sound recording owners have to be paid when recordings are broadcast, performed in public venues, or used on certain platforms. These rights are separate from songwriter rights. Songwriters collect publishing income which is different. Neighboring rights belong to the people who created the recorded performance and to whoever owns the actual recording.

Quick glossary

• Neighboring rights Income paid for public performances and broadcasts of a sound recording. This can include radio plays, TV, restaurants, bars, and some streaming services.
• Master rights Rights in the actual recording. The owner of the master can license the recording and collect certain revenues.
• Publishing The rights and income related to the underlying composition. Writers and publishers get this money.
• PRO Performance rights organization. Examples are ASCAP which stands for American Society of Composers Authors and Publishers, BMI which is Broadcast Music Inc, and SESAC which is Society of European Stage Authors and Composers. These collect public performance royalties for songwriters and publishers. They do not collect most neighboring rights for sound recordings in many territories.
• Collecting society An organization that collects and distributes neighboring rights or performance royalties for recordings. Examples include SoundExchange in the United States and PPL which stands for Phonographic Performance Limited in the United Kingdom.

Why Labels Want Neighboring Rights

Simple. Money. Neighboring rights flow in places that can be hard for artists to monitor. Think background music in bars, radio spins, TV syncs, and some country specific streaming payouts. Labels know this. If a label owns your masters and your neighboring rights, they can capture more revenue from the same song twice. A label will often collect the master revenue and then take a cut or everything from neighboring rights as well. If the contract is written badly or aggressively the artist can be left with pennies on top of dust.

Labels also use neighboring rights as leverage. If they hold the admin or registration control they can decide which collecting societies get paid, which territories are claimed, and when payouts are processed. Delays and administrative fees become a revenue stream. A label can even license neighboring rights to third parties and keep the lion share of the cash while the artist gets a small percentage after recoupment.

Real Life Scenarios That Will Make You Scream

Scenario 1: The Forgotten Club Spin

You play a hit at a festival. The radio station broadcasts it. Your manager sends a text saying the song blew up. Two years later your bank shows a tiny deposit of $12 from a collecting society. Meanwhile your label reports tens of thousands in revenue from licensing the song to a TV show. You get nothing because the label kept all neighboring rights. The label used your master to license and then kept all the neighboring income under a broad clause in your contract. You did not even know to register with the right collecting societies because the label said they would handle it.

Scenario 2: The Global Stream Trap

Streaming is confusing. In some countries streaming services pay neighboring rights to the performer and the master owner. The label registers every territory and claims the payouts. You did not register with the international collecting societies that pay performers. A month later you see an offer from a collecting agency that says they can recover back pay for a fee. The label signs a deal with that agency and keeps the comeback money as part of their admin fee. You get a tiny slice and a big story about how recovery is complicated.

Scenario 3: The Contract With the Bait Clause

You sign an indie friendly deal that promises marketing and playlist support. Buried in the contract is a clause that assigns neighboring rights to the label in perpetuity. You only find it during a breakup with the label. The clause says the artist assigns all rights in the recording to the label and that the label will collect all related income including neighboring rights. You thought neighboring rights were separate. You have no leverage now because the label says they own everything connected to the recording.

How Neighboring Rights Work Around the World

Neighboring rights rules vary wildly by country. That variability is the swiss cheese of music rights. Some territories pay well for neighboring rights. Others do practically nothing. Understanding geography matters because a label can register claims in countries with strong payouts and collect most of the money.

• United States The U S historically did not have statutory neighboring rights for terrestrial radio plays. That means radio station plays do not generate neighboring pay to performers in the U S. The exception is digital performance royalties paid through SoundExchange for non interactive digital transmissions such as satellite radio, internet radio, and certain streaming services. That is why many artists register with SoundExchange to collect these specific digital performance royalties.
• Europe Many European countries pay robust neighboring rights for broadcast and public performance. Collecting societies such as PPL in the United Kingdom, SCPP in France, and GVL in Germany manage these collections. If your label registers the masters in these territories they will collect those revenues unless you own the neighboring rights yourself.
• Latin America and Asia Several countries in these regions have their own collecting societies and some pay well for TV and radio use. Each territory has its own rules about who qualifies for performer payouts and how splits are handled.

The takeaway is simple. Whoever registers the recording with the right collecting societies and controls the metadata and documentation gets the money. Labels are often better resourced to register everything quickly and at scale. If they own neighboring rights they will capture a big cut of side income that artists could have had directly.

Contract Language That Signals Danger

Beware these phrases. Each one should trigger full stop mode and a call to a lawyer.

• We own and will exploit all rights in and to the masters and all associated rights. If a contract includes language saying the label owns the masters and all associated rights you need to question what associated rights include. That phrase is broad and can be used to capture neighboring rights.
• Artist irrevocably assigns all rights to current and future royalties. The word irrevocable is a huge red flag. It means you cannot later reclaim rights. It can trap you for years.
• Label will register recordings with collecting societies on behalf of the artist and retain any fees and deductions. If the label retains admin control you will not know which societies were registered and what fees were deducted.
• All territory rights assigned globally in perpetuity. Perpetuity means forever. Few artists should sign away worldwide neighboring rights forever.
• Label retains the right to license the recording and collect all related income. Watch for the phrase all related income. It is deliberately broad.

How Labels Hide Neighboring Rights Tricks

Labels are not always evil cartoon villains. Often they hide bad deals in legalese or bury them under operational complexity.

• Administrative mystery. Labels handle registrations but do not share copies of registrations or statements. Artists assume the label is doing the work. Later the label claims the registrations were done and that any payments were applied to recoupable expenses.
• Recoupment math. Neighboring rights cash can be listed as recoupable against advances. The label lists collection income and then deducts marketing or tour support fees before calculating your share. The math is opaque and often in the label favor.
• Third party sales. A label may sell neighboring rights or license them to third party administrators who then take a large cut. The artist never sees the full revenue because the label cut a deal up front.
• Global swoop. Labels often register and claim neighboring rights across multiple countries at once. They then apply their contract terms to these global collections even in places where cultural rules would have favored performer payouts to you directly.

What Artists Need to Do Before Signing Anything

Neglecting neighboring rights in contract negotiations equals leaving cash on the table. Here is a practical pre sign checklist you can use the moment the label sends you a deal memo.

1. Ask explicitly who owns neighboring rights and for how long. Get the answer in writing. Do not accept vague promises. Ask whether the label is taking ownership or merely administering collections for the artist.
2. Request a clause that requires the label to provide copies of all registrations and statements from collecting societies. You deserve a copy of every registration and statement for every territory.
3. Demand a clear breakdown of administration fees and deductions. How much will the label deduct before paying you? Is collection income recoupable against your advance?
4. If the label wants to administer rather than assign the rights ask for a limited term administration agreement rather than an assignment. Administration means the label handles registrations for a fee while you retain ownership. Ask for regular reporting and an audit right.
5. Get a carve out for recovering royalties due to you under local collecting society rules. This means if your country guarantees performer payouts the label must respect that and not intercept those payments.
6. Ask for reversion clauses. If the label fails to register the recordings with collecting societies within a short time the rights revert to you. Reversion is your safety net.
7. Consult a music lawyer. Yes you will pay for it. You will save much more money in the long term.

Negotiation Tactics To Keep Neighboring Rights

You do not need to be rude. You need to be strategic. Here are lines to use and reasons labels might accept them.

Ask for administration instead of assignment

Say this: I am happy for you to handle registrations and admin for neighboring rights for a fixed fee or percentage for a specified term. I want to retain ownership of the rights. This gives the label the operational workload they like and keeps ownership with you. Labels often accept this because they still profit from administering collections.

Propose a revenue share with caps

Say this: We can split neighboring rights revenue 60 40 with the artist getting 60 percent after reasonable admin fees which cannot exceed X percent. The label likes guaranteed upside and you get a clear number. Put a cap on admin fees so the label cannot take an imaginary expense and eat your share.

Request audit and transparency clauses

Say this: I need quarterly statements and the right to audit once per year by a third party. Labels hate audits that find problems but they prefer deals that are documented. This clause forces transparency and reduces the chance of sloppy accounting.

Put a reversion on non registration

Say this: If recordings are not registered in core territories within six months of release the neighboring rights revert to the artist. Deadlines create consequences and compel label action.

How to Reclaim Neighboring Rights After Signing

If you already signed and the label controls neighboring rights you still have options. Reclaiming rights is messy but not impossible.

• Review your contract with an entertainment lawyer. Look for ambiguities around assignment and definitions. Ambiguity can be your friend in court or mediation.
• Demand accounting. Even if the label owns the rights you have a right under many jurisdictions to see statements. Ask for full statements from the collecting societies and licensing deals. Request copies of registrations as proof.
• File direct claims with collecting societies where possible. In some countries you as the performer can register directly and collect your share even if the label claims it. This varies by territory and society rules. Consult the collecting society guidelines for each country.
• Negotiate a buy back or carve out. You can propose to buy back neighboring rights for a fair market value or negotiate a limited carve out for specific territories. Labels sometimes accept cash up front or an ongoing small fee in exchange for giving rights back.
• Use leverage. If you are the performer and your recordings are generating attention and bookings you can use that leverage to demand better splits. Labels prefer deals to lawsuits so negotiation often wins.
• Take legal action only if it makes sense. Litigation is costly. Choose it when the sums justify the expense or when precedent will set a beneficial example for many artists.

How Much Money Are We Talking About

Neighboring rights money ranges from negligible to life changing. It depends on territory, type of use, and the collecting society rates. Examples include radio play payouts in Europe that can add up to thousands monthly for a hit record. Public performance in hotels and restaurants across a country can be a steady revenue stream. TV sync payouts that involve paying for both the master and the composition can be substantial. If a song places in a network television show that uses the recording extensively neighboring rights can add tens of thousands in revenue in a short time.

Expectation management is key. Not every song will generate large neighboring income. But if you have a catalog and the label controls neighboring rights across multiple countries that says compound interest over time. Those small sums become material when accumulated across plays, territories, and years.

Practical Steps to Start Collecting Neighboring Rights Yourself

1. Identify your role on each recording. Are you the featured performer, a session player, or a producer who performed? Your status affects eligibility for performer payouts.
2. Register with the relevant collecting societies. In the U S register with SoundExchange for digital performance royalties. In the U K register with PPL. Check local collecting societies for other countries. Each society has requirements for documentation so gather ISRC codes which are the unique identifiers for recordings, release dates, and proof of your performance credit.
3. Collect documentation. Session notes, release forms, a copy of the recording and proof of identity help verifying claims. The more complete your paper trail the faster the society can register you.
4. Keep metadata clean. Ensure your name and role on each track is consistent across streaming platforms and liner credits. Labels often mess up metadata on purpose because messy metadata is an excuse to claim ownership.
5. Use direct licensing platforms. Some platforms let artists license directly to certain users. This can be another revenue route if you own or control neighboring rights.

Red Flags in Deals You Must Never Ignore

• Broad all rights language that includes associated rights. This is the classic trap.
• Perpetual assignment with no reversion. Forever is forever. Be careful.
• Opaque admin fee schedules. If the label will deduct undefined costs, walk away or negotiate limits.
• No audit rights. If the label refuses audits they either expect sloppy bookkeeping or worse.
• Assignment of future rights. If the deal assigns rights to works you have not yet created think twice. You are signing future income away for present promises.

Sample Clause Edits You Can Propose To Keep Neighboring Rights

Below are practical edits you can propose to a label. Use them as negotiation ammunition. They are plain language alternatives that reduce ambiguity.

• Label will administer registration and collection of neighboring rights for a period of 24 months after release. After that period administration may continue only by mutual written agreement. Artist retains ownership of neighboring rights at all times.
• All administration fees charged by the label will be capped at a maximum of 10 percent of gross collections and will be itemized in quarterly statements. Any fee above that cap must be pre approved in writing by the artist.
• If the label fails to register the recordings with major collecting societies in the United Kingdom or the United States within six months of release the neighboring rights for those territories will revert automatically to the artist upon written notice.
• Artist retains the right to register directly with collecting societies in territories where local law permits performer registration. The label will not block or interfere with such registrations.

What To Do If The Label Refuses To Negotiate

If the label refuses to budge you have tactical options.

• Consider other partners. Some distributors and indie labels specialize in artist friendly agreements. You may get less upfront money but you keep ongoing income streams.
• Build leverage. Play shows, build streams, and create demand. The more visible you become the more power you have to demand fair terms or to leave.
• Use social proof. Artists who share bad deals publicly sometimes pressure labels to change terms. This is risky and messy but it gets results if you are prepared for the fallout.
• Shop the masters or buy them back. If owning masters and neighboring rights matters to you consider buying back your masters when you have the funds. Many labels will sell older catalogs if you can pay.

Action Plan Artists Can Use This Week

1. Find your record contract and highlight any reference to neighboring rights, associated rights, or registration with collecting societies.
2. Schedule a one hour call with a music lawyer or a free legal clinic for creatives. Bring the contract and ask about ownership of neighboring rights. Get one clear sentence you can use when emailing the label.
3. Register with SoundExchange if you have digital performance activity in the United States. This is fast and can generate immediate small payments.
4. Clean your metadata on streaming platforms. Make sure your artist name is spelled consistently and that performer credits are correct.
5. Prepare a negotiation email that asks for administration instead of assignment and requests transparency and reversion clauses. Use the sample clause language above.

FAQ

Who owns neighboring rights by default

Ownership depends on your contract and local law. Often the record label that owns the master will claim neighboring rights either explicitly or implicitly through broad contract language. In some countries performers also have statutory neighboring rights so ownership and entitlement can be shared. Always check your contract and local collecting society rules.

Can I collect neighboring rights if my label owns the masters

Sometimes yes and sometimes no. Many collecting societies require the owner of the recording to register. If the label has registered the master and is collecting revenues the label may be able to keep distributions. However some territories pay performer shares directly. You should register as a performer where possible and request documentation from the label. If the label refuses to register properly you can pursue negotiation or legal remedies.

How do I know if my label registered my recordings with collecting societies

Ask for copies of registration certificates and confirmation emails. Most societies provide receipts or registration numbers. Demand quarterly statements that show what was registered and where. If the label refuses share a screenshot of your request publicly or with a lawyer. Labels hate the bad publicity and usually comply when pushed.

Is SoundExchange the same as a PRO

No. SoundExchange is a U S organization that collects digital performance royalties for the sound recording. PROs such as ASCAP and BMI collect royalties for songwriters and publishers for public performances of compositions. They are separate systems and you should register with both if you are eligible.

What is recoupment and how does it affect neighboring rights

Recoupment is when labels deduct costs they advanced to an artist from future revenue. If the contract allows the label to apply neighboring rights collections to recoup the artist advance you may not receive payment until recoupment is satisfied. That means neighboring rights money can be used to reduce debt rather than be paid as income to the artist.

Can I audit my label to see if neighboring rights were collected

Often yes if your contract includes audit rights. An audit allows a third party to review the label accounting. If you do not have audit rights you can negotiate for them or request them as part of a settlement. Audits are a powerful tool to ensure labels are not skimming revenue.

What is a reversion clause and why is it important

A reversion clause forces rights to return to the artist if the label fails to perform certain obligations. This is critical for neighboring rights because it prevents a label from owning unregistered or unexploited rights forever. Ask for short deadlines for registration and automatic reversion if the label misses them.

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