Japan's Agency for Cultural Affairs Weighs New 'Phonogram Performance and Communication Right': Cross-Border BGM Revenue for Japanese Artists Meets Domestic Pushback Ahead of 2026 Diet Bill

Japan's Agency for Cultural Affairs has begun reviewing a new 'phonogram performance and communication right' that would extend rights to record labels, singers, and performers. A subcommittee established in August 2025 is set to finalize its direction by year-end, and the agency is targeting submission of a Copyright Act amendment to the 2026 ordinary Diet session at the earliest. If enacted, restaurants, retailers, and similar establishments using commercial recordings as background music would pay a fee that would be distributed to performers and record labels. This article maps the structural shift, including the link to cross-border BGM monetization for Japanese artists.

Under the current Copyright Act, BGM use of commercial recordings is licensed through JASRAC and similar bodies on behalf of composers and lyricists (copyright holders). Compensation rights for performers, recording artists, and labels (neighboring-rights holders) remain limited in scope. The proposed 'phonogram performance and communication right' would fill that gap, moving toward a structure in which performers and labels also receive equitable consideration.

Policy framing: One central driver is strengthening incentives for Japanese artists to expand internationally. Japanese music is widely consumed overseas, but the absence of a domestic phonogram performance and communication right has long been cited as the reason Japan cannot collect cross-border BGM royalties on a reciprocal basis. Establishing the right would also align Japan's framework with the international standard called for under the WIPO Performances and Phonograms Treaty (WPPT).

What this means for the industry: (1) a new revenue stream for labels, performers, and singers; (2) reciprocal cross-border BGM collections that could route overseas income back to Japanese artists; (3) renegotiation of roles between JASRAC, NexTone, and any new management body; and (4) added cost exposure for restaurants, retailers, and similar BGM users. Combined with the expansion of Sync Licensing, this could be a turning point toward a multi-layered monetization framework for song usage rights.

Industry view: Pushback over additional BGM costs has already surfaced from the food-service industry. The structural debate will center on fee levels, the scope of covered venues, and collection mechanics. The agency is set to lock in concrete design choices through year-end subcommittee work, with cross-industry lobbying and public-comment activity intensifying in parallel through 2026.

ZEN editorial view: For Japanese indie creators, this institutional change carries direct relevance. On top of distribution agents (TuneCore / The Orchard Japan, etc.), copyright management (JASRAC / NexTone), and Sync Licensing, 'BGM fees' could emerge as a new revenue axis — with downstream implications for label affiliation and master-recording management choices. For CREATIVE LAB artists, the trajectory of this proposal sits on the continuous-monitoring agenda for rights-management strategy.

Sources: Nikkei / Agency for Cultural Affairs — Council for Cultural Affairs Copyright Subcommittee, Policy Committee / Hakomori Law Office