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--SGA President speaks to Congress about financial facts of songwriting career.
 
 

SGA Provides 75 Years of Advocacy, Education to Songwriters

 

The 1909 Copyright Act had been in effect for less than a decade when our predecessors developed an uneasy awareness that the relationship between them and their publishers was anything but a partnership. This was especially evident in the contracts they were obliged to sign: royalty payments to writers were frequently not specified and when they were, the rate was generally one cent per copy of sheet music sold, and anywhere from 16.66% to 25% of mechanical royalties (i.e., piano rolls and records). Many contracts failed to provide for the payment of foreign royalties. And faulty bookkeeping was not an uncommon phenomenon.

In those early days, writers made several abortive attempts to organize in an effort to remedy the situation. Some of these included:
* 1915 - The United Songwriters of America
* 1920 - Songwriters Union
* 1921 - Composers and Lyricists Protective League

Unsuccessful as these attempts were, they testified to the needs of songwriters and their determination that their contractual rights one day be as widely respected as their lyrics and melodies. Finally, in 1931 three leading writers - Billy Rose, George M. Meyer, and Edgar Leslie - formed the Songwriters Protective Association (SPA), known today as The Songwriters Guild of America. The preamble to the SGA Constitution charged the board to take "such lawful actions as will advance, promote and benefit the profession."

In 1932, the SPA issued the first Standard Uniform Popular Songwriters Contract - the composer's ‘Magna Carta.’ Few publishers accepted the first SPA contract; many resisted it bitterly. But, the writers stood firm and in time were rewarded with acceptance. Even those writers who did not join us benefited from our existence because our contracts raised the level of even the individual publisher's ‘boilerplate’ agreement. This was only the first of many demonstrations of songwriters joining together for what they felt was right. We had to tough it out again during the initial controversial audits of publishers in the 1950s. Not only did we win that struggle but today nearly all publishing contracts provide for some sort of right to audit.

The most outstanding example of our success is the Copyright Act of 1976. Twenty years in the making, and commonly know as the ‘Author's Bill’ because it strengthens the position of the creators, the Act was largely related to efforts by the SGA. The Guild took a leading role in the shaping of this bill, spending time, energy and money to educate Congress as to the needs of songwriters. Those efforts paid off in many ways, three of which include:

1. Term of Copyright - Under the old Act there was a two-term copyright system in which writers had to obtain a copyright renewal after the first term of 28 years in order to get a second 28-year term of protection. The new Act provides instead for a simple, single term – the author's life, plus 50 years. This is the same term used in most foreign countries. But more important, writers of songs composed after January 1, 1978 (the date the 1976 Act went into effect) no longer have to live with the danger that works not renewed on time will fall into the Public Domain.

2. Contract Termination - Regardless of the type of publishing contract a writer signs (other than ‘Employment for Hire’), the new Act provides that the contract can be terminated as to United States rights after a specific period of years (usually 35 years). The purpose of this provision is to correct any imbalance against the writer - who, while young or inexperienced, may have signed contracts with unfavorable terms and who, as a result, may not be fairly compensated when the songs become hits. The problem is that no one knows, at the outset, whether a song will be a success. So writers requested - and Congress granted - a second chance. The new agreement states that 40 years after signing a contract, or 35 years from publication of the song, the writer may terminate that contract as to the United States rights. He or she may then keep the publishing rights, or strike a new bargain with the same or different publisher. The new agreement can then reflect the true market value of the song. Under the Guild's form of contract, world rights will also revert to the songwriter.

3. Statutory Mechanical Rate - This is the maximum rate, set by Congress, that a record company has to pay a music publisher for the right to use a song on a record. The ‘first rate’ which refers to the first recording of a song, could carry a higher royalty rate if the licensor can negotiate. For every other recording, the Statutory Mechanical Rate is the maximum. In practice, this maximum rate is frequently negotiated down by record companies. Since 1909 the rate has been frozen, by law, at two cents, per song, per record sold. Determined to have this rate raised, the Guild organized its members and friends and mounted a campaign on behalf of songwriters. As a result, the Copyright Act set a new rate of 2.75 cents. More important, the Act established the Copyright Royalty Tribunal (CRT) with power to review and make additional changes in the rate, starting with special hearings in 1980. Prior to these hearings, the Guild ascertained that members of the CRT had a limited awareness of the music business. So, we hired a prestigious economic research organization to prepare a socioeconomic survey of all songwriter's earnings. The Songwriter Economic Profile proved that the average songwriter works in a very ‘high risk - low reward’ profession, and the report was presented in evidence before the CRT. Throughout the spring and summer of 1980, the Guild, represented by counsel and songwriters, and in cooperation with the National Music Publishers Association (NMPA), waged battle at every CRT session. In the end, the CRT not only raised the rate to 4 cents, but established a timetable of periodic increases which topped off at 5 cents as of January 1, 1986. In 1987, with the CRT authorized to make another review of the rate, the Guild acted early to take a leading role and, with the NMPA, entered negotiations with The Recording Industry Association of America to establish rates effective January 1, 1988 through December 31, 1996. The new agreement provides for the rate to change in proportion with changes in the Consumer Price Index (CPI), a widely used measure of inflation. Regardless of changes in CPI, however, the rate cannot fall below five cents, nor exceed the previous rate by more than 25% for any two-year span. While the current agreement is to last for just 10 years, the parties hope that the new formula will be used far into the future.

The new rate structure, as of January 1, 1998, is as follows:
* January 1, 1998 - 7.1 cents
* January 1, 2000 - 7.55 cents
* January 1, 2002 - 8.0 cents
* January 1, 2004 - 8.5 cents
* January 1, 2006 - 9.1 cents

Since the enactment of the Copyright Act, the Guild has continued to take a stand on every issue of importance to songwriters and the music industry in general, including home taping, source licensing, derivative rights, author's moral rights, the deductibility of business expenses, compulsory license, copyright registration fees and, most recently, infringement of royalty payment due to digital/Internet piracy. Our president and board members spend considerable time and energy talking to the media, lobbying, negotiating and coordinating with other industry groups, and raising the funds needed to get the songwriter's message through. True to its history, the Guild maintains its efforts to advance, promote and benefit the profession of songwriting.

© 2004, Further Communications