British neighbouring rights society PPL announced this week that they had collected a record £94 million in international royalties in 2021. This result positions PPL as the world’s leader in international collections.

In this op-ed penned for Creative Industries News, Laurence Oxenbury, Director of International at PPL, argues that neighbouring rights — which are codified by the World Intellectual Property Organisation‘s Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations (WPPT), which has not been ratified by the United States — should be a constant fixture in free trade agreements that the UK will sign with other countries to optimise the global collections of neighbouring rights.

On Thursday 10 February PPL announced that in 2021 it had collected £94 million in neighbouring rights royalties for the public use of recorded music abroad – a record annual total and nearly triple the £32.4 million we collected ten years ago. It is a result that cements our position as the market leader in the international neighbouring rights sector, collecting more revenue than anyone else. 

The result also reflects the scale of revenue that neighbouring rights can deliver for the UK’s music industry, especially individual performers, when appropriate legal protections are in place around the world. 

The UK is a cultural and musical force, exporting artists around the world to commercial and critical acclaim and producing world-renowned musicians and session players. The country regularly sits in the top five of soft power rankings (a measure of global cultural influence) and its artists often top market-specific music charts. With these overseas markets also consuming UK recordings at a similar scale on radio and TV, or in bars, offices, shops and other public places, it follows that this should generate notable sums of neighbouring rights royalties for the performers and rightsholders of those recordings.

Legal exemptions

However, the detail of country-specific copyright regimes means this is sometimes not the case. It is not uncommon for countries to be signed up to the WIPO Performances and Phonograms Treaty (WPPT) — which sets out important protections for both performers and sound recording copyright owners — but to have filed reservations which mean that, contrary to WPPT standards, performers still don’t receive neighbouring rights royalties when their recordings are played in those countries.

Similarly, some markets have legal exemptions which allow relevant companies to not pay royalties for the recordings they use. In other markets, there are artificial caps on the amount of royalties paid. Such laws reduce the amount of neighbouring rights revenue that flows to UK performers and recording rights holders from the affected markets.

With their music being used without proper payment, the small businesses which constitute the majority of the UK music industry are effectively subsidising the overseas local businesses enjoying the benefits of that music: whether it be large broadcasters in Australia and Canada, theme parks and night clubs in Japan, or shops in Korea.

Seize the moment

But there is now a moment of opportunity. It is possible for the UK to take advantage of Brexit to enhance the neighbouring rights of its performers and recording rights holders through negotiation of free trade agreements (FTAs). Whilst there are always many different areas and competing priorities in each FTA, these negotiations frequently include commitments on intellectual property matters and therefore provide a means to encourage countries around the world to recognise the rights of performers as laid out in the WPPT. The UK can and should seize this moment to push for those rights to be recognised, excessive licensing exceptions to be dismantled, and arbitrary royalty caps to be tackled. 

Commitments have already been secured from two of the world’s top ten recorded music markets by revenue: the 2020 FTA agreed by the UK and Japan reflects and enhances the position of the EU-Japan agreement with obligations to explore the introduction of equitable remuneration from the public performance of recordings; and the 2021 UK-Australia agreement includes commitments to “discuss measures to ensure adequate remuneration for performers and producers of phonograms when phonograms published for commercial purposes are used for broadcasting or for any communication to the  public.”

The 2021 UK-New Zealand agreement in principle (with the full trade deal expected shortly) also included commitments to extend the term of protection of producer and performer rights and to maintain and or adopt public performance rights for performers to cover communication to the public of phonograms.  

Drive improvements

There are ongoing UK negotiations with India, and Canada, Israel and Mexico are slated to be next in line. All are potentially significant recorded music markets and each negotiation presents opportunities to improve the protection of performer equitable remuneration. Better protections will result in more neighbouring rights revenue flowing around the world, benefitting the UK as a net exporter of music.

Looking forward, PPL will further fine-tune the technology and business processes on which our successful international collections are founded, as well as seeking to further develop our already strong relationships with other collective management organisations around the world.

We will also continue to play our part in driving improvements in the operation of the global recorded music industry, thereby helping to maximise neighbouring rights returns for performers and recording rightsholders. But the UK Government and its partners around the world can and must play a vital role by improving legal protections for recorded music and performances in overseas domestic legislation.

With such protections in place we believe we can continue to grow the international neighbouring rights market, helping performers and recording rights holders in the UK and around the world maximise their neighbouring rights revenue and better supporting the global ambitions of UK artists and music businesses.

By Laurence Oxenbury