New European court verdict could cause American artists to net overseas royalties
Musicians based in the United States have historically been unable to access royalties for overseas use of their songs. SoundExchange, a facilitator of online and satellite radio music licensing, estimates that musicians missed out on more than $350 million in foreign royalties in 2019 alone. However, this could all change following a monumental court decision made in early September that is set to greatly benefit American artists and record labels.
The legal action in question originated not from an American entity, but rather from Irish royalty collection group, Recorded Artists Actors Performers (RAAP). The RAAP brought charges against Phonographic Performance Ireland (PPI) earlier this year in the Irish High Court following PPI’s move to reduce royalty splits from a standard 50/50 arrangement to just 20 percent for record labels.
European Union legislative oversight, the European Court of Justice (ECJ), reached a verdict in this case on September 8. The result: regardless of nationality, all musicians are to receive equal profit shares generated from all public and radio plays in the EU. Large concentrations of American artists’ fanbases are located in Europe, but these listeners’ music consumption was previously barred from generating revenue for Americans. In other words, this landmark court decision is a gargantuan win for American musicians.
Many countries currently do not honor overseas streaming royalties. Countries currently withholding revenue from American artists include the United Kingdom, Netherlands, Japan, and Australia, among others. Although offering streaming royalties to foreigners as if they were nationals is very uncommon, the recent ruling from the ECJ is a positive step towards the implementation of this treatment on an international scale.
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