In October 2020, the world’s largest global independent music publisher, peermusic, acquired Premier Muzik, All Right Music and Global Master Rights as part of a major move into neighbouring rights. The newly formed peermusic Neighbouring Rights collectively formed the new global independent leader in neighbouring rights encompassing over 300+ record labels and over 2500+ performers, including Rihanna, Billie Eilish, Imagine Dragons, DJ Snake, Metallica, Jacques Brel, Jean-Michel Jarre, Leonard Bernstein, Megan Thee Stallion, Finneas, Lady A, Lang Lang, Lizzo, Panic! At The Disco, Migos, and David Guetta.
Just ahead of the first anniversary of the merger, we speak to Mary Megan Peer (CEO of peermusic), Gino Crescenza (Managing Director of Premier Muzik), Erik Veerman (Managing Director and Co-Founder of Global Master Rights) and Christophe Piot (Managing Director and Founder of All Right Music) (pictured above L-R) about how their combined efforts are working out, how they are responding to growing competition in the market, where the current sticking points for neighbouring rights are and what their collective future goals must be.
Why are neighbouring rights important? And why did peermusic make such a major move into this area last year?
Mary Megan: It’s a great question and I think it is important to start by defining neighbouring rights as it is one of the least understood areas of the music business. Neighbouring rights are the rights associated with a sound recording and are paid to the performer and master owner. In contrast, the copyright is associated with the composition (i.e., music and lyrics) and is paid to the songwriter and publisher. Like copyrights, neighbouring rights are collected by a network of societies around the globe. Unlike copyrights, much of the legislation recognizing and defining rules around neighbouring rights collections are relatively new and still being established in some territories.
The reason we decided to get into neighbouring rights right now, and why it’s so important, is because it is a durable and growing revenue stream. The durability has been particularly important during the pandemic, when performers were not touring and lost their touring income. Neighbouring rights, since they are associated with a sound recording, were not impacted by the touring shutdown, though there has been some downturn during COVID.
“The reason we decided to get into neighbouring rights right now, and why it’s so important, is because it is a durable and growing revenue stream.”
– Mary Megan Peer, peermusic
The growth in neighbouring rights is what is most exciting to us. This is being driven on many fronts: the neighbouring rights collection societies are professionalizing and becoming more efficient at collecting and distributing income; and there are legislative changes in several countries which will increase collections. Two particularly important ones relate to performer qualification and collections from digital streams. In terms of qualifications, the European Court of Justice has ruled that US-based performers should have many of the same rights as European ones in terms of collecting income. That makes Europe potentially a broader source of income for US-based performers and master owners.
In terms of digital, there is currently proposed legislation in several European countries which would enable digital income streams to qualify for neighbouring rights, which currently is only the case in a few territories, notably in the US at SoundExchange.
There are 45 countries in the world where neighbouring rights are currently collected. We expect that number to keep growing.
The other driving factor for peermusic to get into this space was really finding the right partners. Premier Muzik, All Right Music and Global Master Rights all share our client-focused ethos and independent mindset. Each of the four companies involved in forming peermusic Neighbouring Rights share a commitment to delivering top tier client service and delivering the most royalties to our clients with the support of best-in-class technology. This was a natural fit for our first major expansion into a new line of business in over 90 years
Given the nuances and rapid development in neighbouring rights, it was important for us to find deep expertise in the field. We found that in our new partners who have a combined 60-plus years of experience in the industry and have developed strong working relationships with all of the neighbouring rights societies worldwide. They are extremely well versed on the inner workings of each society, their procedures and regulations and how the metadata qualifies. Two of the principals, including Erik, worked at CMOs before coming to this side of the business.
One year into establishing peermusic Neighbouring Rights we are seeing incredible results for our clients and our ability to deliver these important royalties to them is rewarding, even more so during these times when performers are increasingly reliant on alternate forms of revenue streams.
The recent DCMS inquiry into streaming economics in the UK recommended that publishers and songwriters should get a bigger share of streaming income. What will be the international repercussions of this?
Gino: From my point of view, it was great to see the UK government examine this issue on such a through basis. Although it did not specifically touch on neighbouring rights, the concept of fair renumeration should carry through into the neighbouring rights space.
What we’re hoping for is more Collective Management Organizations (CMOs) to recognise streaming revenues. From our experience, the majority of the CMOs remunerate from terrestrial radio and other broadcasters. There are some societies that are starting to pay on digital income streams, such as Brazil, France and Spain, but it isn’t going to be enough for your next mortgage payment.
I hope societies really push for that and get this income because it’s the future.
Christophe: One purpose of the original French law of Neighbouring Rights was to also recognize a right for the performers, not only for the authors/composers or master owner (this includes every musician/singer part of a recording, main artist or not). That is a right that cannot be granted or cannot be controlled by the majors. That’s very important because that’s probably the only thing left to the artist. This is a very moral law, in a way.
So many songs are hits because of one single musician [but] many of them are not songwriters themselves, they are musicians. People are paying one single fee and that’s it. But thanks to neighbouring rights it can add revenue.
What issues particularly affecting neighbouring rights are you prioritising at the moment?
Erik: Now that we have been acquired under the umbrella of peermusic, we have the opportunity to expand into territories from which it was previously very difficult to collect neighbouring rights.
For example, the Argentinian society does not pay out any royalties to foreign entities, so you have to have a local entity to be able to collect there. Thanks to the infrastructure of peermusic, we now have the opportunity to collect there – so we are rapidly expanding into Argentina and similar territories.
In general with neighbouring rights, one of the most important developments is the increasing importance of technology and data. I have been working in this industry for over 15 years and the data side and the technology side have taken a much bigger part of the industry than they ever used to.
“In general with neighbouring rights, one of the most important developments is the increasing importance of technology and data.”
– Erik Veerman, Global Master Rights
At peermusic Neighbouring Rights, we continue to invest in our own proprietary metadata and distributions platform. We do the best job for our performers and master owners by collecting and registering all their repertoire data accurately and efficiently. Our proprietary platform gives us the ability to do this for our clients. Something that we are really focusing on, especially in the last year, is investing in tools in partnership with airplay data providers and technology firms to get the best data out there so that we can find all the different versions of tracks around the world that are being used.
We pro-actively track and resolve all issues or disputes whenever they occur. We diligently analyse all payments, statements and invoices ensuring nothing is missed.
We are also excited to offer an online portal giving our clients access to all their repertoire, statistics about airplay, revenues, royalty statements and much more. Peermusic Neighbouring Rights has 41 unique countries in which they register.
Of course there are still a lot of difficulties with tracking and monitoring airplay around the world. Some of the societies still don’t have proper tools and technologies to be able to have all the data available that they need to ensure proper distributions. But we make sure all of our clients’ data is accurately registered to give them the best chance of collections.
Are metadata issues still badly holding the sector back here?
Erik: To make estimates is a bit difficult as it varies enormously per territory, but there have been a couple of international initiatives such RDx. RDx has been initiatied by the IFPI and WIN, supported by various labels and societies, to become a central registration point for recording rights holders to supply their repertoire data in a standardized format which can then, eventually, be accessed by all MLCs. Global Master Rights is currently in the process of also joining the RDx.
I think with these kinds of initiatives, they take time. There’s a lot of cleanup to do as there’s a lot of polluted data out there.
The problem is that within the neighbouring rights societies, besides these new initiatives, there hasn’t been a sufficient international standard for how rights owners or performers were supposed to supply their data to them. The templates and formats in which claims need to be filed in order to qualify vary per territory. In the exchange of information between societies on the international level this has led to the problem that a lot of data is not matching and as a direct result the collected revenue remains unclaimed and stays behind in the so-called black box.
Maybe 10 or 15 years ago, the black box was an extremely large and significant percentage of the total collections worldwide. I do think the black box is decreasing, relatively; but there are still millions and millions of dollars or euros unclaimed.
“I do think the black box is decreasing, relatively; but there are still millions and millions of dollars or euros unclaimed.”
– Erik Veerman, Global Master Rights
I do strongly believe that the people behind [these initiatives] have a very passionate motivation to solve this problem. There are a lot of elements to get everybody on board. It is a bit difficult because every country and every society has their own understanding of how the Neighbouring Rights Act is interpreted and also how they execute it on local levels.
To get all those societies joined together on this collective database management system will, I think, still be a few years away. We strongly hope that they can make it happen faster because it’s beneficial for the rights owners.
Mary Megan: It’s like publishing before there was a CWR [Common Works Registration] format. Every society has a different data standard and you have to fill out different forms in different formats for each society. So having a company that has the expertise to do that, that knows each society’s formats, that keeps up with them as they change, and that can register things electronically is really important in this space.
It is coming up on a year since Premier Muzik, All Right Music and Global Master Rights were acquired by peermusic. What results are you seeing so far?
Mary Megan: [Premier Muzik, All Right Music and Global Master Rights] were all working together in a loose alignment prior to our acquisition. They were sharing technology development and other shared services.
In terms of how it’s working, we’ve been able to provide peermusic’s geographic resources [to the existing neighbouring rights businesses]. We have 38 offices in 32 countries around the world. We are looking at collecting locally in some territories that weren’t available to these companies before because they did not have on-the-ground presence. We have also hired in Japan to cover that market. It is a very important neighbouring rights market, as it is on the publishing side.
We’ve been able to bring in our expertise on the technology side, on the legal side and on the finance side so that these companies can really concentrate on growing their business.
In terms of how it’s going, we’ve signed a record number of clients in the past two months. It’s been really strong in terms of growing our relationships with the managers and lawyers who are making the decisions for performers and labels about neighbouring rights.
“We were independently organised and now, thanks to peermusic, it’s a new synergy.”
– Christophe Piot, All Right Music
Christophe: The three companies were working together before we did this acquisition with peermusic. We were independently organised and now, thanks to peermusic, it’s a new synergy. peermusic provides us with a big organisation in terms of network.
Gino: From my side it’s exciting. We share the same vision.
This is a booming area, with both BMG and Downtown recently setting up specialist divisions to handle neighbouring rights. How has this sharp uptick in competition affected you?
Erik: I think it’s beneficial for the performers and for the rights owners that there’s more competition. The quality of the work that we have to provide has to be as good as possible to make sure that clients stay with us and that they’re happy with the results.
It is natural that there is more competition in the space as it grows.
How has the overall rights revenues market been increased by neighbouring rights?
Mary Megan: Yes, neighbouring rights is definitely contributing to the growth in music revenues worldwide. I think it’s primarily legislative changes that have led to an increase in the pie, as well as general growth in the music market.
Christophe: Income from neighbouring rights comes from mainly radio airplay, but also from private copy, which is everywhere in Europe except the UK. In France we recently really fought to maintain this private copying [right] because it is a very important income for the performers and also for the labels. Finally the fight has been won. Private copy is primarily collected from the sale of new or second-hand laptops and smartphones.
With neighbouring rights, what are the big sticking points and what will you be focused on in the coming years?
Gino: Artists credits. One of the main problems in this neighbouring rights world right now is [related to] the non-featured acts. They are the underdogs, especially without complete artist credits.
In the good old days of physical products, the majority of the credits were there – who played bass on which songs and so on. The beauty of vinyl, cassettes, CDs, etc is that they provide the physical space to include the credits for all participants in the consumer facing product.
“One of the main problems in this neighbouring rights world right now is [related to] the non-featured acts.”
– Gino Crescenza, Premier Muzik
In today’s digital market, when the labels provide full credit information of a release to the digital distribution platforms, it is not available to the consumer because the platform lacks the space to display this info in a visually pleasing way. This makes tracking down credits for non-featured musicians, like guitarists, backup singers and percussionists, incredibly difficult. For example, say a Rihanna track was produced by Stargate, unfortunately as a consumer, you would have a difficult time to find out who else may have contributed to the track. Was there someone who played keyboard or drums? Who did the backing vocals? These are all questions we wish we had the answers to! This is where our services are beneficial. We assist and educate performers on how to submit and keep their credits up to date on sites that serve as the authority on metadata for the industry. Having this information available helps to make sure all of our clients, but especially our non-featured clients are paid properly.
The neighbouring rights world is still in the young phase. It’s not like the publishing world, where the likes of ASCAP have been there over 100 years.
The CMOs are evolving in a positive way. It’s amazing. They have opened their doors more and more. In the last 18 years, I have seen a massive evolution.
Christophe: I also think that we are making progress every day technologically.
Erik: Fingerprinting technologies are becoming a bit more used throughout this industry. I was quite surprised that recognition software wasn’t more widely used in and earlier stage by most CMOs to increase accuracy of distributions.
There are many entities who provide fingerprinting solutions and monitoring companies that we work with. We always look for which entity has the best quality of data for each territory.
[…] This article originally appeared on synchtank.com. […]