Moses Avalon is one of the nation’s leading music-business consultants and artists’-rights advocates and is the author of a top-selling music business reference, Confessions of a Record Producer. More of his articles can be found at www.mosesavalon.com.
You have money sitting in bank accounts in European and Canadian rights organizations. Why are you not trying to get it? The following is a sample chapter/excerpt from the revolutionary tell-all book by music business veteran Moses Avalon called 100 Answers to 50 Questions on the Music Business. Enjoy.
What money? My money is in a foreign bank? Oh yeah — a lot of it. In fact, though you could wait years for royalty checks from US labels, there are foreign agencies (and yes, Canada is a foreign country) that have cash for you now, if you know how to get it.
Unlike the US, just about every other country pays both the record company and the artist when their recording is played on radio and TV. In the US, we only pay the songwriters. (This will change when we are able to pass the Performing Rights Act. But in the meantime…) The key to getting this sound-recording money comes in understanding a term called “Neighboring Rights.” As the term implies, this is money for rights that neighboring countries owe to authors of phonorecords and is collected by Neighboring Rights Organizations (NROs). They are like ASCAP, BMI, and SESAC, except they collect money for the sound recording instead of the composition.
So if a German artist has records playing on French radio, the French NRO collects the money from the French radio stations and pays the German NRO the performance fees. The German NRO then pays the artist/label in their territory.
These warm and friendly rights are a creation of an international treaty called the Rome Convention, which was adopted in 1961. It protects artists and producers of sound recordings against unauthorized reproduction. It also covers certain “secondary uses” of music recordings, such as broadcasting.
This simply means that it creates a revenue stream that must be paid to the producers, labels, and artists of sound recordings when they are played on the radio. Sounds great, right? How come I haven’t heard of this, and where can I get some? Well, there’s just one problem. Two actually. 1) The US hasn’t passed the Performing Rights Act yet, so we still don’t pay artists like the rest of the world, and 2) The real depressing news…the US didn’t opt into the Rome Convention.
Who else isn’t in the pay-the-artist club? China, North Korea, Iran, and Rwanda. Great company.
So the term “neighboring rights” means nothing in the US. We don’t pay Canada squat, and they don’t pay us either. And since we don’t pay European artists for this right when their music is performed here, guess what? They don’t like to pay us either.
Instead, we pay digital-performing rights for US artists when their music is performed on satellite radio and webcasts with a “digital royalty” that is collected by SoundExchange. Meanwhile, the European money, which is collected for US-based artists, stays over there. And here is where it gets interesting…
Artist and labels only have a limited window to collect their money before it “disappears” into the NRO “black box” bank accounts!
Sounds like a hopeless situation, right? Wrong. There is a workaround. More and more American artists are qualifying for overseas performance monies, and a whole subculture of companies called “royalty recovery agents” has sprung up in recent years that specializes in finding and exploiting these qualifications. These firms can be expensive, often charging rates of 30% and a few grand in upfront fees. But the good news is, you don’t need them if you’re persistent and have some time on your hands.
One simple action you can do for yourself is to sign up as a “US artist in residency” with each NRO. Those that are familiar with US PROs will say, “Wait a minute…you can’t do that and still belong to ASCAP, BMI, or SESAC!” Those individuals would be wrong. This is not ASCAP/BMI money, it’s a different revenue stream. ASCAP, BMI, and SESAC collect for writers and publishers. NROs collect for owners of sound recordings: artists, producers, and labels.
There is a way to collect this money, and I can show you just how to do it. It’s time-consuming, but can be worth it if you’ve got music playing anywhere on European TV or radio. In 100 Answers to 50 Questions on the Music Business, there is a list of many NROs and the procedure to approach them. I also answer a few sidebar questions on this subject, like:
– Why your lawyer will not help you collect this money, even if he’s working on commission. (Cant blog about it publicly. Too outrageous.)
– What ASCAP and BMI will have to say about it and what you should say to them.
– Which NRO territories pay the most.
Someday, we will have a Performing Rights Act to help artists and labels collect this money, but until that day, artists need to empower themselves and get this cash!
Do you have experience that you can share with readers about collecting from these organizations? Please post your comments.