In a speech to a membership 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 success is in a very strong position to negotiate with the publisher for a higher percentage. A successful writer may also choose to establish his own publishing company, 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 & McCartney (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 manifold 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. He has been subsidized for the last 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.

Mr. DANIELSON. Mr. Pattison.

Mr. PATTISON. 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. FEIST. May I add

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 copyright?

Mr. FEIST. Not in today's world.

Mr. PATTISON. But I am talking legally.

Mr. FEIST. Oh, yes.

Mr. PATTISON. There is no requirement. In fact, you can buy a song, can you 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.

Mr. PATTISON. But, I could draw up a contract that says 10 percent, whatever deal we want to make between the publisher.

Mr. FEIST. Precisely.

Mr. PATTISON. 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?

Mr. PEER. The question of ease of entry into the record business is, perhaps, an economic one.

Mr. PATTISON. I am speaking very theoretically.

Mr. PEER. 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 publishing 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 difficulty of entry is in distribution.

Mr. PATTISON. And capital and a lot of other things?

Mr. PEER. That is right, but at this point in time

Mr. PATTISON. Oil companies can be in the marketing business or not be, right.

Mr. PEER. Yes, sir.

Mr. PATTISON. They should not be.

Mr. PEER. 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.

Mr. PATTISON. Yes, you are not doing that out of the goodness of your heart?

Mr. PEER. No, we feel we need to do that in order to have them with us.

Mr. PATTISON. 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.

Mr. PATTISON. You are building up good will with him, and he is going to be loyal 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 him 25 percent

Mr. PEER. Absolutely. It is a free market.

Mr. PATTISON. I have no further questions.

Mr. DRINAN. Mr. Chairman, I have a question for Mr. Pattison. How 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

the ASCAP money, do you not also receive some type of consideration for the use of this in the motion picture?

Mr. HAMLISCH. You are looking at a person who, because I was not happy with the way things were going as a composer-right, "the way things were," thank you that was a "sting" in the room there-with my business as a composer, I went to other sources, that is, I became a movie composer, so naturally I got a fee. Most people are not as fortu

nate as me.

Mr. DANIELSON. I think your answer was yes.

Mr. HAMLISCH. Yes, but that is just for a movie song.

Mr. DANIELSON. That is my only question.

I would like to know--perhaps Mr. Feist can help me here--I think that you and your family have been in this business for a long time, right?

Mr. FEIST. That is true.

Mr. DANIELSON. I remember when I was a boy, there was a tune called "I Wonder What's Become of Sally" and I think that it said Feist Publishers.

Mr. FEIST. We never did find out.

Mr. DANIELSON. I would like to know this. About how often in your industry is the situation one in which the publisher buys the copyright, takes the total assignment or purchase, rather than just a contingentfee contract?

Mr. FEIST. I would think that is almost nonexistent today.

Mr. DANIELSON. It is almost all on a contingent-fee basis, and that would call for a percentage participation.

Mr. FEIST. Division of the income between the writers and the pertinent composers.

Mr. DANIELSON. Of the selection of tunes you have in your portfolio, could you give us a ball-park figure, what percentage do you own outright of the copyright, what percentage do you have under the contingency arrangement?

Mr. FEIST. Since I am not now in the publishing business, may I refer to Mr. Peer?

Mr. DANIELSON. Except he is such a youngster.

Mr. PEER. It is my father who started the firm, sir. We do not have any songs at all, we have no songs in our catalog that we own on a complete basis.

Mr. DANIELSON. Then it would follow that if the rate were raised, the composer would participate?

Mr. PEER. Absolutely.

Mr. DANIELSON. It is not a situation where the successor in interest, the copyright, would get the raise, and the composer would sit there, as Mr. Blake says, and be like a fly?

Mr. PEER. Not at all in our company, sir, and I doubt in any others that we know about.

Mr. DANIELSON. In negotiating, how frequently does the rate exceed 2 cents?

Mr. FEIST. Only when there is a composition of extended length: in other words, a symphonic work which might take 20 minutes. Some years ago when the LP came along, by accommodation between the recording industry and the publishing industry, that rate was established at a quarter of a cent a minute.

The record industry recognized the 2 cents really was not enough for a symphonic work that could be put on one side of a record, so that is what those figures over 2 cents cover.

Mr. DANIELSON. Could the recording industry-why cannot they enforce the 2-cent rate in that sort of work?

Mr. FEIST. I would hope that they would not, but they could. I believe they could.

Mr. DANIELSON. I was looking for some kind of a loophole here which you could get around. Are those compositions in the public domain, perhaps?

Mr. FEIST. No, although this gives me an opportunity to make the comment that I was anxious to make.

When the record industry talks about classics, they are mostly talking about public domain works. There are woefully few contemporary compositions available on recordings presently under copyright or written by living composers, so the one-quarter cent rate would not apply to the classics. Did I answer your question?

Mr. DANIELSON. What rate?

Mr. FEIST. One-quarter cent a minute would apply to copyrighted classical works.

Mr. DANIELSON. I see, and the last question I have here is really, throwing it right out into the ring for anybody to snap at it if they wish. Here is the question. The compulsory license seems to have served a purpose in one respect, at least, of making the music available to any recording industry or company that wishes to make a recording. The rub comes when we come to the ceiling of 2 cents.

It seems to be pretty hard to have a compulsory license without some kind of a rate or fee also included within that law, so the question seems to be, which equity is the heavier here? Is it better to have a compulsory license without, with a fee, or have no compulsory license with a potential of monopoly, but with open negotiations?

I just wonder if there could be some alternative. The thing that bothers me right now, could we have a compulsory license with the provision that the licensee would never have to pay open to negotiation on the first publication, but that the subsequent licensees, the compulsory licensees, could not be compelled to pay any more than the highest rate charged by negotiation.

Mr. FEIST. I think there would be great danger in that, Mr. Danielson. If someone were extremely eager-and this would be usual-to get first exposure of a new song or a new work, he might then make a deal at an unrealistically low price just to get it in circulation, and then under your concept he would be tied in every one of the subsequent licenses and every other recording of that work.

Mr. DANIELSON. Of that particular work.

Mr. FEIST. He would be tied to an unfortunate deal that he may have made for reasons of anxiety or some other

Mr. DANIELSON. Of course, you have free enterprise entering in there in fixing the rate. I want to think about that further. Mr. Hamlisch, here now, he has a real giant smash hit, and he could probably next time around get 4 cents if he wanted to.

Thank you all very much. We must adjourn this particular committee, this particular subcommittee hearing, subject to the call of the Chair. I am going to leave the record open since there is no objection

57-786-76-pt. 3—18