Important amendments to a European directive on neighbouring rights were recently implemented in the Netherlands. The term of protection for performers and producers of phonograms was extended from 50 to 70 years. Accompanying measures strengthen the position of performers and include a ‘use it or lose it’ provision and establishment of a special fund.
Under previous EU laws, recorded musical performances were protected for a maximum of 50 years after their fixation in a record. After expiry of this term, performers lost control over the use of their performances and no longer received any income from them.
Extension of term of protection
Under the 50-year period of protection, an increasing number of performers were facing an income gap later in life. To remedy this, the term of protection has been extended from 50 to 70 years. Performers will now receive royalties for a substantially longer period of time, probably the rest of their lives.
The extended term also has consequences for broadcasters and owners of public places where recorded music is played, as they will now have to pay royalties for a specific record for a longer period of time. Where under the old regulation records first published, made available or communicated to the public on or after 1 January 1963 would be royalty free per 1 January 2014, broadcasters and others have to pay royalties for 20 more years.
To counter criticism that the extended term of protection is more advantageous for record producers and famous artists, accompanying measures for less famous performers have been introduced.
‘Use it or lose it’ provision
The ‘use it or lose’ provision has been set up to allow performers who have transferred their rights to a record company to reclaim those rights if the record company fails to market the record sufficiently at the expiry of the 50-year period. For record companies, it is worth considering what this provision could mean for their long-term marketing strategy.
Performers, who recorded a song in the early 1960s, and have recourse to the ‘use it or lose it’ provision should first send a notification of their intention to terminate the contract. If the record company fails to market the record sufficiently within a year after notification, the contract will terminate.
A fund will also be established for performers who previously transferred their rights to record companies against a lump sum payment. Usually, these are less known session musicians. Under the new amendment, record companies will have to pay 20% of their revenues earned during the extended period. In the Netherlands, the fund will be managed by Sena. Specifics about the fund and its procedures have not been published yet.
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