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Mr. BLAKE. I just want to say this: I have been on the stage 76 years, because I started in 1899. But this is the first time I have ever had stage fright in my life.

Mr. DANIELSON. Let me ask you-after 76 years, you think you might make this your career?

Mr. BLAKE. My statement is that if I had to depend on just the royalties that I made from my music, I could not take care of my wife and family. So I agree with Mr. Hamlisch; I think that the mechanical rate should be raised. I am the worst businessman in the world. I do not know anything about business, I do not know anything about business, because all the businessman I know [gesturing). And I do not want to get like that. So I think that the rate should be raised. Now, how far? I leave it to the economists to tell me how far it should be raised. I know it should be raised because I have been writing for years. But if I had to live off my royalties, my wife and I would be in the poor house tomorrow. Fortunately I can still perform to supplement by income. That is my statement and I am not going any further.

Thank you very much.

Mr. DANIELSON. Thank you, Mr. Blake. That is probably—I hate to say this Mr. Nathan and Mr. Gortikov—it is probably the most eloquent presentation today.

Mr. Drinan?

Mr. DRINAN. Thank you very much, Mr. Chairman, and thank you gentlemen.

I am sorry. I simply had to go to the markup of another bill during part of your presentation. I will ask Mr. Hamlisch first, even if the statutory maximum were increased from 2 cents to 4 cents, do I understand that you would still only get $10,000 instead of $5,000.

Mr. HAMLISCH. Correct.

Mr. DRINAN. So that you really would not be happy with what is being proposed ?

Mr. HAMLISCH. No, I would be happy with that. I think that the 4 cents would be adequate-but, I would like to see Congress adopt a mechanical rate based upon a percentage of record sales—8 percent of sales. But, some people in the record industry do not seem to want to do that because it would be very hard to regulate. I think it would be adequate to adopt a ceiling of 4 cents.

Mr. DRINAN. Would you tell me more about your recommendation along with Mr. Blake, that the mechanical rate should be a mandatory 8 percent of the sales price of the phonograph records?

Mr. HAMLISCH. That is what most of the countries in Europe are getting now.

Mr. DRINAN. Would you tell us more about that?

Mr. HAMLISCH. The one thing about a percentage rate that I like is that it adjusts for the cost of living. If record prices go up, the composers will get more money based on percentages of prices.

I think the reason we are in a dilemma today is because in 1909, when a record sold at 35 cents, instead of making the rate a percentage of the list price, Congress set a flat rate of 2 cents. As record prices went up, the rate stayed the same. Now composers, lyricists, and publishers together get the same 2 cents out of a record that sells for over a dollar.

Mr. DRINAN. Why do you not push for a percentage ?

Mr. HAMLISCH. I do not think it is a question of that. I think it is a question of persuading the other side. I do not think that it has ever been an open question.

Mr. Drinan. Try to persuade to Congress.

Mr. HAMLISCH. I am perfectly willing to do that. With your's and God's help, maybe we have a chance.

Mr. DRINAN. You will need more than God's help.

Mr. HAMLISCH. Unfortunately, I think you are right. I think we need more than God's help. I think what we really need is to make sure that everyone understands the situation, because I know that most people do not understand what composers do. Most people say to me, were you not in the movie, "The Way We Were"? And I say, no, I just wrote the music. And they get very depressed by that.

Second I think that if I received $10,000 based upon a 4-cent rate, I would be happy. I think that it would bring back some self-esteem to the composer. I think it is a rough life to live thinking that if you have a hit, a fantastic check will come in. When the check does come in, it is so small that they say, I cannot believe that this is it. I think that is our problem. Most people do not realize how low the rate really is.

Mr. Drinan. I take it, however, that you simply do not want the total deregulation of the industry?

Mr. HAMLISCH. No, because to be honest with you, composers are artists: we are not good businessmen. We are, I think, the easiest people to intimidate. I must give you an example.

If today, someone in the record industry said to me that I can have Frank Sinatra record a song of mine if, instead of 2 cents, I would take a half-a-cent. My pride would say, for Sinatra I will pay to have my song, performed. I think what happens is that the writer gets coerced, because the marketplace is limited by certain companies and by certain singers. For example, as you realize, many singers record their own material.

I would love Elton John to record my songs but normally he records his own. I would love Stevie Wonder to record one of mine but normally he records his own. So the number of artists I have available to me is very small. Therefore, when one of the top artists wants to do a song of mine, it is very easy for the record company to bargain against me. The company says, if you want this artist to record your song, you are going to take less than 2 cents. If Congress sets a floor on the rate, I will not be put in that position again.

Mr. DRINAN. Going back to 1909—I am reading the law here-I find it anomalous how the Government interfered or intervened in the regulation, the very tight regulation, of this particular industry, and I am not entirely certain if the regulation is necessary, but appar. ently there are no votes for deregulation on the other side of the controversy.

Mr. PATTISON. You missed it.

Mr. DRINAN. Oh, well, then, I am sorry. I had hoped that there was a deregulator—I had hope because it is a deregulator here.

One last question, in most of the European nations how is that arrived at, by statuté, by agreement, or union or what?

Mr. Feist. That is arrived at by negotiation between the International Federation of the Phonographic Industry (IFPI), which represents all, I guess, of the record companies on the Continent, and a bargaining organization representing the copyright proprietors. It covers all records released and is the subject of renegotiation from time to time, and it has gone from 7 to 8 percent in the last decade.

Mr. DRINAN. Cannot we have that association come to the United States and solve our problems?

Mr. Feist. There is some question as to whether or not under U.S. laws such bargaining could take place.

Mr. DRINAN. Well, if the Congress will fix that up.
Mr. Feist. If Congress would fix it up, it could work beautifully.

Mr. DRINAN. Well, I am getting a little bit of hope. All right, thank you very much, gentlemen, and I am sorry, once again, that I had to miss part of your presentation.

Mr. DANIELSON. Mr. Wiggins.

Mr. WIGGINS. Mr. Nathan, did you hear or see the chart, and the statement about the chart, that the average payment per tune was roughly $1,400 currently and was 2 years ago roughly $600?

Mr. NATHAN. Yes; I saw that.
Mr. WIGGINS. Do you agree with it?

Mr. NATHAN. I have not had an opportunity, Mr. Wiggins, to check any of these figures. It does not seem to reconcile with ours, with our analysis, which is all royalties and all selections, and I do not know what difference there is between released tunes and others. I will look into the figures and analysis, and I would like to then submit observations on these, but, frankly, sir, I could not comment at the moment on the accuracy of those figures.

Mr. WIGGINS. Mr. Chairman, I do hope that the witness will be given that opportunity because that is an important chart to me, and your comments on it would be useful.

Mr. DANIELSON. I would certainly-we would bring it up with our chairman, but I am certain that we all want to be as well informed as possible.

Mr. WIGGINS. Mr. Feist, you are representing publishers and I have a concern that part of the problem is with the publishers. Does your conscience bother you, taking 50 percent for the kind of service you perform, which is essentially an agent service?

Mr. Feist. Mr. Wiggins, on this my conscience never bothered me, and we do not get 50 percent. We do, on occasion. The only standard contract that exists within the publishing business generally is one prepared by the American Guild of Anthors and Composers. It includes a blank space for the insertion of the percentage which will be paid to the writers, and in parentheses it says, “but no less than 50 percent."

There are negotiations between some writers and publishers, just as there are between record companies and publishers—who are working on behalf of the song writers. It then depends on the relative 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 would 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.

In any event. I share my troubles with you. [Subsequently the subcommittee received the following letter from Mr. Feist :]


New York, N.Y., October 8, 1975. Hon. ROBERT W. KASTENMEIER, Chairman, U.8. House of Representatives, Subcommittee on Courts, Civil Liber

ties, and Administration of Justice, Committee on the Judiciary, Washington,

D.C. DEAR MR. CHAIRMAN: In the course of the Subcommittee's hearing on September 11, 1975 regarding mechanical royalties 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. You can have the biggest and most exnensive studio, the best sounding musicians and experienced engineers and technicians; if you don't have the song, the artist cannot be expected to have a hit." Neither can the record 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 Conference 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 current 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 1948—the author's percentage is left blank but the printed text specifies that in no case is it to be less than 50%.)

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