Japanese singers and musicians will finally receive royalties when their works are played as background music in public spaces under a bill to overhaul the Copyright Law approved by the government on May 15. 

The global chart-topping success of J-pop stars such as Yoasobi and Kaze Fujii served as the impetus for the long-sought right.

The amendment, expected to pass during the current Diet session, creates a new “record performance and transmission right.”

This move ends a 60-year delay in adopting an international standard that could unlock billions of yen for Japanese artists. 

However, the change has struck a sour note with some business representatives concerned about new costs.

Currently, when establishments including restaurants and hotels play music, copyright groups such as the Japanese Society for Rights of Authors, Composers and Publishers (JASRAC) collect and distribute royalties only to the songwriters.

Meanwhile, the singers, session musicians and record producers behind those recordings receive no compensation when their pieces are played in the background in public venues.

“Performers and record producers are granted neighboring rights, but the protection has not always been sufficient,” said Ayuko Hashimoto, a lawyer specializing in copyright law.

The new legislation is designed to rectify that.

60-YEAR FINANCIAL STANDOFF

The right for performers to be compensated when their recordings are played in public was established internationally under the 1961 Rome Convention.

More than 140 countries have since adopted similar protections. Among the 38 developed OECD nations, only Japan and the United States have lagged behind.

Japan became a signatory to the treaty in 1989 but opted out of this specific provision. The reason, industry insiders say, was a simple financial calculation based on the principle of reciprocity.

Under this rule, if two countries recognize the right, artists from each get paid when their music is used in the other.

For decades, that was a losing proposition for Japan.

One industry insider confided, “Until now, it was mostly Western music that was listened to in Japan. Since Japanese music wasn’t played overseas, granting these rights would have meant nothing but paying royalties out. There was no incentive to address the issue.”

For Japan’s music industry, achieving this right had become a long-cherished goal after years of lobbying. The sense of a historic breakthrough was palpable.

Just before the amendment bill was approved by the Cabinet, one industry member said with emotion, “We have achieved something that felt like grasping at straws, something no one could do for decades.”

This long-standing omission created a situation where, as one industry veteran lamented, “The value is the same whether Kaze Fujii sings a song or an ordinary person sings it.”

THE YOASOBI EFFECT

In the last few years, the tide has dramatically turned.

In 2023, the duo Yoasobi’s hit “Idol” became the first Japanese-language song to top Billboard’s Global Excl. U.S. chart.

Artists such as Kaze Fujii, Kenshi Yonezu and the hip-hop unit Creepy Nuts have also stormed up international charts. And this fall, solo artist Vaundy’s first Asian arena tour saw tickets for its 10,000-plus capacity Seoul dates sell out soon after going on sale.

“We want to promote overseas expansion, return compensation to the artist and create a positive cycle, but the right itself didn’t exist,” said Shunsuke Muramatsu, chairman of the Recording Industry Association of Japan. “It was urgently needed to build a system where Japanese artists can be properly compensated.”

The potential economic payoff is substantial. 

Mitsubishi UFJ Research & Consulting Co. estimates that had the rights been in effect in 2024, Japanese artists would have garnered 2.4 billion yen ($15.1 million) in overseas revenue that year.

By 2034, that figure could soar to 13.9 billion yen, with Japan’s net surplus in music royalties surging from 800 million yen to 9.8 billion yen.

This aligns with the government’s strategy of positioning the content industry as a “key industry,” with a goal to increase overseas music sales tenfold, from 100 billion yen in 2024 to 1 trillion yen by 2033.

The issue gained momentum last June when language urging an “early conclusion” on the protection of copyrights was inserted into the government’s key economic policy framework, leading to a rapid acceleration of discussions.

STARS VS. STOREFRONTS

For music lovers such as Nobuaki Ando, who runs the Kayokyoku Bar Spotlight in Tokyo’s Shinbashi district, the change is welcome.

“It is a good thing that we will be able to properly return compensation to the singers and other performers,” he said.

Ando’s bar currently pays fees to JASRAC. Under the new law, it would face an additional payment for performers, unless granted an exemption.

But for many, that new cost is a major concern.

An industry federation representing 940,000 businesses and 5.9 million workers—from restaurants and hotels to barbershops and cleaning services—submitted a formal objection to the government in January.

“For us, it is sudden and heavy-handed,” the group stated, adding, “We find it difficult to accept the introduction of this system.”

“With rising fuel, utility, and raw material costs, the food and beverage industry is already stretched to its limits,” said Akihiko Ito, the group’s executive director. “Public awareness of this new right is still insufficient, and even if we pass on the costs, it would be difficult to gain customer understanding.”

An estimated 1.57 million businesses, or 30 percent of all industries, could be on the hook for the new royalty payment.

Tasuku Mizuno, a lawyer specializing in the field, urged caution. While not opposed to the right itself, he warned of unintended consequences.

“If additional burdens are placed on stores and facilities, they may refrain from playing music,” he said. “Careful system design and explanations are necessary to avoid narrowing opportunities for music to circulate in society.”

Acknowledging these concerns, the Agency for Cultural Affairs has proposed a preparatory period of about three years after the law’s passage to publicize the change and facilitate negotiations between artists and business groups.

(This article was written by Ryo Jozuka and Shiki Iwasawa.)