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bargaining power. There are song writers who get as much as 75 percent, two-thirds, and this goes back many, many years. Also there are occasions when the song writer and publisher become partners in a joint enterprise. It is by no means a stereotype that there is a 50 percent division.
On the point of the publisher's role, he is not simply an agent. He is a creative factor in the music business. It is he who discovers, in most instances, and encourages young writers and supports them financially as they progress in their careers. He employs many promotion people. I think I am correct in saying Mr. Peer has a staff of 300. He follows through on a song after the initial hit.
After the first impact of “The Way It Was”-I was speaking of Mr. Hamlisch's publisher-he who went out and got those 10 extra records. They did not just fall into anybody's lap.
I could, as you might imagine being a member of, well, a second generation member of, the music publishing business and having had some 40 years of my own life in it, I could go out on the role of the publisher. I hope you will accept my assurance that it is a vital central role in the business, and that we are not just agents who collect and distribute. We are far more than that. We are at least, let me say, as creative and as much a force as the record industry.
Mr. Wiggins. Well, I will accept your statement for consideration, but I have heard contrary statements which I will also consider. If, in fact, the weight of evidence is that most publishers are merely agents for their stable of writers, then the division of revenue of 50/50 does offend my conscience.
I rould like to think that you bargain at arms' length and reach an agreeable division. I am inclined to agree with you, sir, that the creators are often poor businessmen and that that blank space which says “not less than 50 percent," but it becomes 50 percent in reality in all cases, in which event, whether it is conscionable or not, raises trust problems that your counsel should look into.
Inanverent. I share my troubles with you.
(Subsequently the subcommittee received the following letter from Mr. Feist :)
NATIONAL MUSIC PUBLISHERS' ASSOCIATION, Inc.,
New York, N.Y., October 3. 1975. Hon. ROBERT W. KASTEN METER, Chairman, ('.s. House of Representatives, Subcommittee on Courts, Civil Liber.
ties, and Administration of Justice, Committee on the Judiciary, Washington,
D.C. DFAR MR. CHAIRMAN: In the course of the Subcommittee's hearing on Septemher 11, 1975 regarding mechanical rovalties time did not permit a full response to Congressman Wiggins' question regarding the music publisher's role and share of royalties. I take this opportunity to expand my answer for the record.
The allegation by the record industry that our function is largely that of an administrative and clerical conduit is wholly unfounded,
First, music publishers play an important creative role. Our business is songs: and as Chet Atkins, head of RCA in Nashville, has said. “The song's the thing. Yon can have the biggest and most expensive studio, the best sounding musiciang and experienced engineers and technicians; if you don't have the song. the artist cannot be expected to have a hit." Neither can the recorre company. And in May 1974 Goddard Lieberson, then President of CBS Records and Chairman of the Board of RIAA, in his keynote address to the International Music Industry Con. ference in London, also noted that, "the basis of any successful record is the
song.” Some performers, he said, thought they could write their own material, but all too often their creativity tends to dry up quickly. "The time has come,” Mr. Lieberson concluded, "for the record industry to be more concerned and interested in stimulating and relying on songwriters."
Music publishers discover and encourage new songwriting talent. They provide many a writer with substantial advances, annual guarantees or living allowances to enable him to develop his art. Their staffs often include not only business administrators but also creative directors, producers, editors and experts. They conduct workshops for novice writers, provide the kind of guidance and advice that young writers of songs need (like young writers of books), and in many other ways sustain and nurture the writer during the early and difficult periods of his career.
Recordings, by way of contrast, are merely one of many media for the transmittal of a song--an important medium, to be sure, and more technologically complex than most others, but not to be confused with its creative content. Music publishers, since the days of vaudeville, have worked with all the media or outlets for music and will continue to do so.
Second, music publishers play an important promotional role, once a song has been created. They make their own demonstration samples and promotional records at their own expense for the purpose of showcasing their writers' songs. They work to get not merely the initial recording but the maximum additional recordings of each song-interesting a popular artist in recording a country music selection, for example, or vice versa. They develop packages of selections or excerpts to bring their songs continually to the attention of record companies, broadcasters, disc jockeys, motion picture producers, the makers of television or radio commercials, and others selecting material for recording or performing.
While the record company promotes only a particular recording, the music publisher promotes the song, the writer, his other songs and compatible selections from their repertory. While the record industry is increasingly emphasizing cnr. rent products, the music publishing business is a "catalogue" or repertory business which demands persistence not only in the creative function of establishing new songs, but in the promotional function of keeping older songs constantly before the public, seeking new opportunities for their use or new kinds of exposure. No meaningful song in a publisher's repertory is ever dead. Thus, although a record company's promotion is a temporary phenomenon while the artist or writer is at his peak, the publisher's continuity of commitment is an important stimulus to continuing earnings for the songwriter.
It is important to realize that as the media for communicating songs have changed, so, too, has the nature of the publishers' promotional efforts. And as changes inevitably will occur in the future, so, too, will the publishers' promotional activities.
Third, music publishers play an important international role, once a song has been created and promoted in this country. They undertake on their own or with others its publication and promotion abroad in as many countries and languages as possible. They frequently not only select qualified lyricists for foreign language adaptations but also performing artists suitable for various countries. They may have to persuade the U.S. record company's foreign affiliate to release the original language recording overseas. They have often achieved for a song greater success in another country than it had enjoyed here. Record companies cannot and do not fill this role.
Moreover, American publishers acquire songs overseas and commission appropriate English language lyrics which make foreign songs acceptable and often successful in this country.
Fourth, music publishers do indeed play an important administrative role. They represent the author in negotiations with respect to multiple uses of his song-not only in recordings but in motion pictures and otherwise, at home and abroad. Through the NMPA licensing service, The Harry Fox Agency, fees are collected and audited. The importance of this efficient form of protection for the author is indicated by the fact that recoveries made through these audits amount to almost 5% of all royalties paid.
Finally, this brings us to the question of the division of royalties on recordings between songwriters and publishers. The writer's normal minimum has been 50% for many years, and is regarded as comparable to other earnings bases of tradebook writers as well as songwriters. (In the only "standard" contract that exists in the business--the American Guild of Authors and Composers contract of 1948the author's percentage is left blank but the printed text specifies that in no case is it to be less than 50%.)
In a speech to a mempership meeting in California, Edward Eliscu, then President of the American Guild of Authors and Composers, stated that where the publisher does his job in promoting a writer's song, he is surely entitled to his 50%. And the current AGAC President, Ervin Drake, recently said, "we view publishers as our partners in a sense that is best expressed by the word symbiosis'. It is true that a publisher's work may not begin till our work is complete: but, in the large sense, our work is not complete until they exercise their functions properly as publishers." In short, songwriters and their publishers are partners in the true sense of the word.
In fact, the writer's share in mechanical royalties is frequently more than 50%, depending on his bargaining power. A writer with a consistent record of surress is in a very strong position to negotiate with the publisher for a higher Järventage. A successful writer may also choose to establish his own publishing wuupany, either an independent firm or one managed for him by an established publisher, publishing his own songs and, in some situations, songs by others. For example, Charles K. Harris, a Tin Pan Alley pioneer and the writer of many great successful songs such as “After The Ball," was his own publisher and published works by others. For almost 30 years Irving Berlin has been his own publisher. The list of other contemporary writers who own their own publishing companies is so extensive that the following only suggest the extent of this practice : John Denver, Paul Simon, Elton John, Burt Bacharach, Lennon & Mocartney The Beatles), Charlie Rich and Loretta Lynn.
Another practice by which a writer obtains more than the customary 50% is by the establishment of his own publishing company in partnership with his original or another publisher. Among the many who have utilized this approach are George Gershwin, Jerome Kern, Jerry Herman (“Hello Dolly"), Walter Donaldson ("My Blue Heaven"), and Rodgers & Hammerstein,
In short, the relationship varies from writer to writer, some of whom are also artists, some of whom also employ their publishers as agents, and some of whom utilize no publisher at all. That is why it would be unsafe to generalize regarding the division of mechanical royalties between author and publisher, much less legislate on the subject.
Thank you for this opportunity to provide only a brief indication of the mani. fold activities of music publishers, their labors on behalf of writers and their contributions to the American music scene. Sincerely,
LEONARD Feist. Mr. DANIELSON. Mr. Hamlisch, make it brief if you can. We are going to get a quorum call in just a minute.
Mr. Hamlisch. I just want to tell Mr. Wiggins one thing having to do with that. I feel that the argument is not with the publisher because when I went into New York last year to compose the music for - A Chorus Line." I did it with a new writer by the name of Ed Kleban. He is not a proven writer yet. Ile has been subsidized for the la-t few years, been given money by a publishing company to actually be able to live and to be allowed to write.
I think that for every instance where a publisher, say, is a person who does not help, I think that there are a vast amount of people who can tell you that there are people getting paid without yet, you know, giving material, just by having faith in an individual, and, obviously, Ed Kleban now has proved that he is good, and the publisher now has proved that it was worth the investment.
I just want to make sure that you understand that the plight of the composer is not up against the publisher because we have had great success with dealings with publishers. It is elsewhere where we seem to get into trouble.
Vr. DANIELSON. Vr. Pattison.
Mr. Patrisox. Mr. Hamlisch, the $5,000 check you got, those are not the only earnings you got from The Way We Were.
Mr. HAMLISCH. No, that is right.
Mr. Pattison. You get earnings from ASCAP, or something like that?
Mr. HAMLISCH. That, again, is a situation where everything depends on how big the record hit is. When we talk about “The Way We Were" and “By the Time I Get to Phoenix,” we are talking about giant hits, so the performances of ASCAP customarily will be good. When we say, what is good, I would say that we are talking between $20,000 and $30,000 worth of performance on those kinds of songs.
Many times, however—and I think that the majority, particularly in the rock and roll industry, as opposed to songs like "The Way We Were” which becomes a standard and the Phoenix song, which is a standard-many times you have a song hit in January and it has died in February and you never hear it in March. And then, the ASCAP money is very minimal. It is just a question of how many times it is played on the radio and television, and it does not last. The thought that it lasts forever, you know, is erroneous.
Mr. PATTISON. I understand that, but if you make hula hoops and they are good in January and they are no good in March, the same thing happens.
Mr. HAMLISCH. Correct.
Mr. DANIELSON. We are going to have to stick with Mr. Pattison's questions at this time.
Mr. Pattison. I have a few other questions here. Mr. Feist, perhaps, could answer this one, Mr. Peer.
Just as it is perfectly possible to settle your own negligence case without a lawyer or sell your own house without a lawyer, a composer can sell his own songs without a publisher, is not that correct? I mean he can buy himself a typewriter. There is no law that requires anybody
Mr. Feist. Oh, no.
Mr. Pattison. Or a publisher can do its own composing, is not that correct? Cannot a publisher hire a person as a composer for 40 hours a week and say, you do not have any copyright, in other words, you agree that as part of your employment you will turn over your copy
Mr. Feist. Not in today's world.
Mr. Pattison. There is no requirement. In fact, you can buy a song, can vou not, from somebody? A guy comes along and says, I will sell you the song for 50 bucks. I think “Goodnight, Irene” was sold that way, 15 times I understand in 1 day to different publishers. So that there is no statutory requirement; 50 percent is simply a custom of the trade, equity that people belong to certain organizations have agreed that they are not going to take less than 50 percent. You are saying not less than 50 percent is in your contract, but you can cross that off too, could you not?
Mr. Feist. Let me make clear, that contract is not universal. It is only a standard contract.
Nr. PATTISON. But, I could draw up a contract that says 10 percent, whatever deal we want to make between the publisher.
Jr. Fuist. Precisely.
Mr. Patrison. In Mr. Peer's case, he says he is having difficulty dealing with the record companies, for example. He is going to have they are going to pay him a cent and a quarter, why do you not--you could buy yourself machinery and make yourself, you could be in the business, could you not!
Jr. Peer. The question of ease of entry into the record business is, perhaps, an economic one.
Mr. Pattison. I am speaking very theoretically. Mr. Pwer. Technically, any person can be in the record industry. Mr. PATTison. In fact, it is being done. Are not publishers going into the record business and recording companies going into the publishin business?
Mr. PEER. That is true. However, the area of control in the record business is in marketing and distribution. It is not in creativity. The ditticulty of entry is in distribution.
Mr. PATTISOX. And capital and a lot of other things?
Mr. Pattison. Oil companies can be in the marketing business or not be, right.
Mr. PEER. Yes, sir.
Mr. Leer. Sir, may I respond to your original question about the percentage to composers?
Mr. PATTISON. Yes.
Mr. PEER. As an example, we have signed two composers recently that we are subsidizing. They are unproven, have not had hits, and the percentage split between us in on a 75/25 basis because we think that they are particularly gifted.
Jir. Pattison. Yes, you are not doing that out of the goodness of your heart?
Jír. Peer. Vo, we feel we need to do that in order to have them with us.
Mr. PATTISOX. You are buying a guy in the minor league that you can get cheap that you would not be able to get after he has made the majors.
Mr. PEER. That is absolutely true.
Jr. Pattison. You are building up good will with him, and he is going to be loval to you.
Mr. Peer. We are paying them 75.
Mr. Pattison. I understand that, but it is simply a matter of bargaining. If you thought you could achieve the same result by paying lum percent
Mr. PEER. Absolutely. It is a free market.
Mr. DRINAX. Mr. Chairman, I have a question for Mr. Pattison. Ilow come you know so much about “Goodnight, Irene"? Is he a double agent here; is he from the industry?
Mr. DANIELSON. You need not answer that.
Mr. PATTISON. That was Leadbelly. I heard Pete Seeger do that story.
Mr. DANIELSON. Following that, Mr. Pattison-and I am referring to you, Mr. Hamlisch-in addition to the $5,000 that you refer to and