For decades, if you walked into a bustling cafe in Tokyo, a boutique clothing store in Osaka, or a hotel lobby in Kyoto, the music playing in the background was only paying half its royalties.
While songwriters and composers have collected royalties from these public spaces for years, the actual performers and record labels behind the tracks received absolutely nothing.
That is all about to change. On Wednesday, 17 June, Japan’s parliament completed the passage of a revised Copyright Act, introducing a brand-new record performance and communication right.
This landmark reform completely reshapes Japan’s music economy, aligning the world’s second-largest recorded music market with global standards and unlocking vital new revenue streams for artists both at home and abroad.
Closing a decades-old loophole
To understand why this is such a big deal, you have to look at how Japan handles copyright. The system splits music rights into two distinct categories:
- Authors’ rights: Held by songwriters, composers, and music publishers.
- Neighboring rights: Held by the performers and record producers who actually create the audio recording.
Under Japan’s original 1970 Copyright Act, neighboring-rights holders were only entitled to a fee when their music was used in broadcasting (like TV or radio), not when it was played in public commercial venues. Meanwhile, songwriters have been collecting background music royalties via JASRAC (the Japanese Society for Rights of Authors, Composers and Publishers) since 2002.
This left performers and labels entirely out in the cold when it came to cafes, shops, hotels, and gyms.
Global isolation and the price of reciprocity
The concept of paying performers for public playback isn’t new—it actually traces back to the Rome Convention of 1961. According to the Japanese government, 142 countries have already adopted this right. In fact, among members of the OECD, Japan and the United States were the only two major economies holding out.
This lack of domestic law had severe consequences for Japanese artists looking to expand globally. Because international copyright rights are often granted on a reciprocal basis, countries that do collect these royalties have refused to pay Japanese performers and labels when their music is played in European or British bars and restaurants.
With Japanese acts like YOASOBI and Fujii Kaze rapidly building massive international fanbases, the education and culture ministry realized the domestic system was leaving global money on the table. Catherine Lovrics, a partner at intellectual property firm Marks & Clerk, noted that the change finally brings Japanese artists “further into the international fold”.
Interestingly, this reform bridges a gap that was actively highlighted in Japan’s economic partnership agreements with both the United Kingdom and the European Union.
What happens next?
Don’t expect businesses to start paying tomorrow. The reform has been meticulously planned—the Cultural Council has been examining the right since 2023—and the rollout will be gradual.
[Cabinet approves bill: 15 May] ➔ [Diet passes law: 17 June] ➔ [Implementation: Within 3 years]
The revised law will officially take effect on a date set by government order within the next three years. This buffer gives the industry time to set up the infrastructure required to handle the money:
- Designation of a collection body: The Commissioner of the Agency for Cultural Affairs will appoint a specific organisation to collect and distribute the fees.
- Setting the rates: This designated body must draw up and publish a tariff of secondary-use fees.
- Industry negotiations: The body will enter discussions with representatives of music users (like retail and hospitality associations) to agree on fair rates. If they hit a stalemate, either side can apply to the Commissioner for a formal ruling.
The bottom line
The United States now stands as the lone major holdout, where terrestrial AM/FM radio and public venues still pay nothing to performers and labels for the recordings they broadcast.
For Japan, however, this is a monumental step forward. Following an 8.9% year-on-year growth in recorded music revenues in 2025, this new framework secures the financial future of Japanese musicians, ensuring that as the country’s music footprint expands globally, its artists are finally paid what they are owed.
