What does Neighboring Rights mean in the music industry?

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Neighboring Rights Definition | Music Industry Glossary

In-Depth Explanation

Neighboring Rights (also called Related Rights) are royalties paid to recording artists and record labels when a master recording is performed publicly or broadcast on non-interactive platforms like satellite radio, internet radio, and terrestrial radio (in most countries outside the US). These royalties are separate from the performance royalties paid to songwriters and publishers.

How Neighboring Rights Works

Traditional Performance Royalties go to songwriters and publishers when a composition is broadcast. Neighboring Rights go to a different group: the performing artists and the owners of the Master Recording (usually the record label). The term "neighboring" means these rights sit next to the composition copyright in legal terms.

Neighboring rights are generated when a sound recording is played on non-interactive platforms:

Satellite radio (SiriusXM)
Internet radio (Pandora)
Terrestrial radio (AM/FM) in most countries outside the US
Television broadcasts
Public venues (nightclubs, bars, restaurants, retail stores)

Interactive streaming (Spotify, Apple Music) does not generate neighboring rights. Those services pay labels and artists directly through distribution agreements.

When royalties are collected, they are typically split 50/50:

Master Owner's Share (50%): Paid to the entity that owns the sound recording copyright, usually the Record Label. For self-released artists, this share goes to the artist.
Performer's Share (50%): Paid directly to the artists who performed on the track. The featured artist takes the majority (typically 45%), while non-featured artists (session musicians, backup singers) split the remaining 5%.

The performer's share is paid directly to the artist by the collection society. The label cannot touch it or use it to recoup an Advance.

The United States Terrestrial Radio Loophole

The United States is one of the only developed countries that does not pay neighboring rights for terrestrial AM/FM radio. American radio stations pay performance royalties to songwriters and publishers through PROs like ASCAP and BMI, but they pay nothing to recording artists or labels.

The radio lobby has historically argued that radio play provides free promotion that drives record sales. Critics note that this argument made more sense in the vinyl era and that no other developed country accepts it.

The US does recognize neighboring rights for digital broadcasts. When a song plays on SiriusXM or Pandora, SoundExchange collects the royalties and distributes them to artists and rights owners.

Real-World Example

An independent artist self-releases a single and registers it with SoundExchange. The song gets played on SiriusXM for three months, generating $2,400 in neighboring rights royalties.

SoundExchange splits the collection: $1,200 goes to the artist as the master owner, and $1,200 goes to the artist as the featured performer. The artist receives the full $2,400 because they own both rights.

The same song also gets played on BBC Radio 1, generating 300 GBP held by PPL in the UK. And it gets played on Canadian radio, generating $400 CAD held by Re:Sound. If the artist has not registered with PPL or Re:Sound, that money sits unclaimed. Most societies hold unclaimed funds for three to five years before absorbing them.

SoundExchange has distributed over $13 billion to recording artists and rights owners since 2003, including approximately $991.5 million in 2025 alone. It now covers roughly 91% of the global neighboring rights market through international collection agreements.

Why It Matters for Independent Artists

If your music is played on SiriusXM, Pandora, or any international radio station, neighboring rights royalties are being generated in your name right now. If you have not registered with the appropriate collection society, that money is sitting unclaimed.

Three steps to collect:

Register with SoundExchange (US artists). It is free. This is the only way to collect digital performance royalties from SiriusXM, Pandora, and similar services. See our guide on SoundExchange royalties and how to collect them.
Register internationally. If your music has global reach, use a neighboring rights administrator to register with PPL (UK), Re:Sound (Canada), GVL (Germany), and other societies. They charge 15-20% of collected royalties but recover money you would otherwise lose entirely.
Register before your music gets played. Most societies hold unclaimed royalties for a limited window. After that, the money is gone.

Read our full guide on neighboring rights and international royalties you may be missing and our overview of all the music royalties you should be collecting.

Visit SoundExchange to register and claim your royalties.