Songwriters singin' blues on royalties

Songwriters, it seems, are making out all right. In the 1945 film "Rhapsody in Blue," Cary Grant, as composer George Gershwin, sits poolside in the backyard of his posh Beverly Hills home.

Today, Burt Bacharach doesn't seem to be on the verge of bankruptcy, either.

Even the recent film "10" has Dudley Moore's songwriter character driving a banana-yellow Rolls-Royce and flying off to a Mexican resort on a moment's notice.

But the image is faulty, says the American Guild of Authors and Composers, a trade group that is part of a current battle in Washington over whether to increase royalties to songwriters.

Composers, music publishers, and record companies are all pleading their cases this summer before an obscure panel called the Copyright Royalty Tribunal, whose five members have until the end of the year to decide whether to increase the current royalty rate of 2 3/4 cents per tune. This is the rate paid to the composers each time a song is sold, whether on an individual record album or on a piece of sheet music. They receive the same royalty when a song is used in a performance.

The songwriters and music publishers, who usually split songwriting royalties evenly, say they cannot keep up with inflation with that rate. But the record companies say the recording industry is in bad enough shape right now without having to dish out more money to songwriters who, record executives say, just walk away with their royalties in their pockets and don't share any of the risk of the boom-and-bust record business.

The profits of the record companies are at stake -- but so are the incomes of thousands of songwriters and publishers.

"The songwriters make money from Record 1," says Stanley Gortikoff, president of the Recording Industry Association of America. Citing the financial difficulties of the recording industry starting in 1979, Mr. Gortikoff claims that "there are no profits to absorb [a royalty increase] from."

But because the tribunal lacks subpoena power, the composers' guild has been unable to force the record companies to come up with proof of costs to back up their claims, the guild director, Lewis Bachman, says. The guild is asking for an 8 prcent royalty rate, based on the retail price of a record.

"They [the record companies] pay everyone else on a percentage basis but us," Mr. Bachman says. "We need a percentage rate in order to keep up with inflation , but now we are locked in by law to a flat cents rate."

The guild commissioned an economic profile of songwriters by Rinfret Associates Inc., New York financial consultants, which concluded that for most, songwriting is a risky business with meager economic rewards. According to te Rinfret survey, more than half the respondents reported that their music-related income in the past five years averaged less than $5,201.

The National Music Publishers Association is calling for a 6 percent royalty rate. In its report to the tribunal, the association claimed the royalty rate is skewed to maximize record company profits.

Because of inflation, and because there are fewer songs on the average album today, composers pull in a far smaller percentage of profits than years ago. The Copyright Act of 1909 set down a 2-cent-per-song rate, which didn't increase until an updated act in 1976, which upped the royalty to 2 3/4 cents starting in 1978. The new copyright law calls for review of the law this year, in 1987, and every 10 years thereafter by the presidentially appointed tribunal.

But while songwriters and publishers are pushing for a bigger slice of a lucrative pie, the record companies are struggling to recover from 1979, a bust after unflagging years of boom.

When the songwriters compare the US music industry with that in Europe, where their colleagues get 8 percent royalties, Mr. Gortikoff of the Recording Industry Association counters that Europe is a much smaller market, where composers have to get a higher rate to survive.

On another flank, trade groups such as the American Society of Authors and Composers are working for tax advantages for composers, a variation on the Republic of Ireland's theme of tax-free living for artists in efforts to encourage them to live and produce there.