works and our copyrights overseas and help to enhance our trade balance in this area. So, it becomes almost a tautology. And we now say, "We adhere to Berne; Berne provides this right. We, therefore, have decided that we have done enough in this whole area, and that settles the issue."

We decided not to use our adherence to Berne as a chance to revisit the relationship between copyright owners and authors. And I do not think it argues one way or another about whether we should do anything now.

The second point, I guess I would like to make is this whole question of recoupment. Much of the argument, and I find it a very important argument, this question of not killing the goose that laid the golden egg, the question of how do you put together the financial commitments to engage in this massive $20 to $30 million undertaking where you have put in a legislative scheme that is so cumbersome and awkward and so restrictive and perhaps allows someone on a whimsical basis to so affect the salability of the product?

I think it is an important point, but the figures that are floating around are sort of strange. And Mr. FitzSimons made a point here, I think in this question. It is hard to read this morning's paper and understand what recoupment means if a $300 million film has not yet recouped.

So, I just think there is a lot of confusion that I have now about this notion that two-thirds of our movies lose money and what that means. Are we talking in the court case sense of the term of net profits or are we talking in some other sense? I do not totally understand that area yet. I do not know if that is relevant except insofar as the economic argument is an important argument against our trying to legislate in this more ephemeral area of moral rights. Mr. NOLAN. Excuse me, if I might just comment on the Paramount case. That was a contractual case.

Mr. BERMAN. Right.

Mr. NOLAN. The issue was profits as defined by that contract, not as we may say whether you earned more money than you had to spend.

Mr. BERMAN. You are not using the contractual definition of profits when you talk about movies making or losing money.

Mr. NOLAN. That is correct, right.

Mr. BERMAN. Are the T shirts included or not?

Mr. NOLAN. They are included.

Mr. MAYER. They are included. And the number that you mentioned is the position of a motion picture when it comes out a theatrical release. In other words, the numbers we are saying is, it only gets back a certain amount in theatrical release on an average, so that we need these supplementary markets to, in fact, have net profits.

Mr. BERMAN. One of the things that the industry has argued is, there is a collective bargaining process. I have not had a chance to read Mr. Counter's testimony. I do not know if he spoke to this issue. Could you take a moment to describe what the present collective bargaining status is with respect to giving directors and any other of the creative forces a role in this post-production process.

And second, how does the collective bargaining process, even assuming that is the appropriate place to let it go, how does that deal with films made prior to the entering into of the collective bargaining process?

I mean, who is going to bargain for the films of the directors who are no longer directing and the screenwriters who are no longer writing and where their products are already out and on the market?

Mr. NOLAN. It is an interesting question, because well, first of all, let me explain what currently is in the Directors Guild agreement. It requires us to call up the director, say, "We want to find an agreeable time for you to sit down with us so that we can transfer the film to tape, so that we can exploit it in the video media." And the director has every right to sit down and does, in fact, as I mentioned in about 75 percent of the cases. We also, even though we do not have a requirement, many times call in the cinematographer, who is a very important element in this whole collaborative process.

In terms of prior works created prior to 1987, when the new provision in the DGA agreement became effective, we do call in those directors as well, again, for the practical reason that we care about our films and we have a relatively small pool of people from which to choose as directors. And we want to make sure that they are pleased with the way we are handling these things.

Mr. MAYER. May I interrupt you for a second, Peter? Those prior agreements do have creative rights bargaining in them, and there are clauses in those agreements as well, although they might not cover everything that is going on today.

Mr. BERMAN. Well, it would be a hell of a negotiator for one of the guilds or for the cinematographers who in 1949 dealt with colorization.

Mr. MAYER. No. No, I am not saying that one did.

Mr. NOLAN. But going back that far is an interesting point because a 1949 director may not be alive and who do you go to? Do you go to the person's children who have nothing to do with the motion picture industry?

Mr. BERMAN. I mean, I think that is a very fair point and I think there are so many complications in how you legislate this. Although I still would love to know whether you think there is a role is there any role for the author, whoever that is and however we might settle that issue, to deal with gross damage to his reputation or serious damage to his reputation from a gross alteration, a major alteration of his creation? Is there any role there for rectification?

Mr. NOLAN. Well, first of all, I think the present law provides them with a remedy at least on the paternity rights side of things to excise his or her name from the credits, and possibly-

Mr. BERMAN. How would he do that?

Mr. NOLAN. Bring an action in court.

Mr. BERMAN. How would he do that?

Mr. NOLAN. Under 43(A) of the Lanham Act, and there is case law to that effect involving a motion picture and a director.

Mr. BERMAN. He could prevent say the subsequent distribution through

Mr. NOLAN. With his name on it.

Mr. BERMAN. With his name on it. OK. What about

Mr. NOLAN. And there is case law under 43(A) of the Lanham Act, again involving two plaintiffs. One case was brought by the Monty Python group, where they were able to stop distribution on network television, because their works were so substantially changed.

Mr. BERMAN. My final point, Mr. Chairman, I know we have other panels and it would be interesting to go on. There are a number of issues we could explore, but my final point is just continuing along the line of the chairman's questions with respect to the fact that the studios have, at times, negotiated contracts with directors that give them some form of, "creative control," that nothing can be done unless they approve of it being done in the post-production phase.

So, we are not talking here in absolute terms. Somewhere the studios are making a balance that says, the economic benefits of getting that director exceed the potential detriments of investing in that director's creative control.

I mean, in other words, we are not talking here an absolute right of ownership here that-

Mr. NOLAN. Of course not. We are in the collaborate process of making motion pictures. Mr. FitzSimons is part of that. I, hopefully, am part of that. Mr. Mayer is part of it. There is normal friction between collaborative partners in these efforts, but I guess the question I have is, should a court impose its decision on how best that process should unfold?

Mr. BERMAN. And my final question, because I did want to ask Mr. Fitzsimons, I have to say I do not understand what legislation you want. On the one hand, you do not like what has been proposed by the directors. I guess we are referring here to the old Gephardt bill where the directors and their heirs and the screenwriters and/or their heirs would have final control over material alterations, because career producers are not included.

You do not want a veto power because you think that is not workable in a collaborative process, but you feel there is a compelling need for legislation. And what would that legislation

Mr. FITZSIMONS. I think the legislation should spell out the relationship between the economic rights of the copyright holder and the moral right of the creative contributor, because that is the area that is causing all of this confusion and discussion.

Mr. BERMAN. Give me an example? What rights should we spell out?

Mr. FITZSIMONS. To what extent moral rights would have to be compromised to the advantage of the copyright owner and to what extent copyright owners' rights might have to be compromised for the benefit of the moral rights. In other words, it is to find a balance between these two conflicting elements.

Mr. BERMAN. And I guess in the case of the producers, you have a problem because you do not have collective bargaining rights. Mr. FITZSIMONS. That is correct.

Mr. BERMAN. Normally, why is that not called bargaining?

Mr. FITZSIMONS. But it is not, because the bargaining process is not there.

Mr. BERMAN. Well, the producer does have the right, individually, to bargain in terms of the contract.

Mr. FITZSIMONS. It would depend completely on the producer's individual clout. Not all producers have the same clout.

Mr. BERMAN. You want to help this guy from Muskogee who is coming in to-all right, Mr. Chairman, thank you.

Mr. KASTENMEIER. With respect to the point that was made earlier about the recoupment of profits from films making a profit within a year after the first run theatrical release, I think the only point was that one cannot assume that a first run theatrical release alone will make a film profitable. Indeed, in most cases, it will not.

The studios are, therefore, dependent upon the release of these films in other forms of presentation that may require alteration. But the way films become profitable is through immediate release to premium cable television, to first run network television, to videocassettes, to airlines, and then later on, to independent television stations, to foreign sales or foreign distribution. There is just an enormous number of presumably profitable outlets that ultimately will redeem the film, though it may take some years.

One almost has to look 10 years down the line to see how good that film is. And even then, as Mr. Mayer suggests, it can still form part of a film library if all the rights have not been sold, which you might be able to redeem even at the end of the useful life of that film in terms of all these other distributions.

So one can hope that most of these films will show a profit and would expect that to be the case. It is said that cable television has such an enormous appetite for films because of competition with other companies that display these films and because they run so many hours a day that even some of the poorer films have a second life because they need the films to fill up their schedules.

I say that because I do not think we should assume that our motion picture industry does not have enormous economic potential for making profits and for redemption of the very considerable investments put into it.

Mr. NOLAN. Absolutely.

Mr. KASTENMEIER. I want to thank the witnesses in our opening panel this morning, Mr. Nolan, Mr. Mayer and Mr. FitzSimons, for their contributions. We are very grateful to all three of you.

Mr. NOLAN. Thank you, Mr. Chairman.

Mr. MAYER. Thank you, Mr. Chairman.

Mr. KASTENMEIER. Our next panel will consist of William Fraker, a distinguished cinematographer who is testifying for the American Society of Cinematographers and the American Society of Film Editors and Frank W. Stanley, president emeritus, International Photographers Guild. Mr. Fraker, would you care to go first?

STATEMENT OF WILLIAM FRAKER, CINEMATOGRAPHER

Mr. FRAKER. Yes, I would, thank you. Mr. Chairman and members of the subcommittee

Mr. KASTENMEIER. In fact, one thing you might do for us is to identify your other colleagues who I have not introduced here who are with you on the panel.

Mr. FRAKER. All right. On my right, seated, is our counsel, Mr. David W. Fleming, and the vice president of the American Society of Cinematographers, Jack Cooperman, ASC.

Mr. Chairman and members of the subcommittee, I am William Fraker, a member and former president of the American Society of Cinematographers, speaking on behalf of that organization.

I want to express our thanks to you for the opportunity to appear here today and to share with you the views of our members regarding the issue of moral rights.

The ASC is an honorary society of film makers, the oldest of its kind in Hollywood, which is celebrating its 71st anniversary this year. We are neither a union or a guild. Its membership is by invitation only and it is composed of leading directors of photography in the United States and abroad. A sampling of some of their more well-known achievements have been included for the record.

Let me share with you, for a moment, the role of cinematography in the creation of a motion picture. The cinematographer, also known as the camera man as well as the director of photography, is both a creative artist and a master craftsman.

As an artist, he creates on film his vision of the subject matter by employing light, color, perspective, space and motion. As a craftsman, he selects the film's various lenses, the movements of the camera and its angles and perspective. He helps to establish the moods and emotions of the viewer. He directs how the camera sees the action. He paints with lights and shadows.

The beauty of a film, to a large degree, is attributable to the tastes and imagination of the cinematographer. In the words of the late Cecil B. DeMille, "For his patience and singleness of purpose in a most arduous work, he is eminently deserving of that which is justly said of few men: He is a true artist."

As far as cinematographers as artists are concerned, any change in the color, the light, the perspective or contents of the photography of a motion picture should be considered a material alteration. Electronic colorization of a black and white film is material alteration and, as such, is unacceptable.

As Stanley Cortez of the ASC so eloquently put it, "After all, when a motion picture which was originally photographed in black and white is then colorized, it is not the actor's acting which is changed, not the writer's writing, not the composer's music, not the editor's editing or the director's directing; no, it is the cameraman's photography which is totally altered from what was an expressive work of integrally refined light and shadow to a totally different form completely foreign to the cinematographer's vision of the story.

I know that perhaps some young people in America today scorn the impressionistic beauty of the classic black and white film, the master achievement of Hollywood's golden era. Because some people do not appreciate the black and white picture does not mean all should be robbed of the joy of seeing a classic in its original beauty and splendor.

Each of us must have the right to feel an undescribable thrill of seeing classics uncut, uninterrupted, the truth and the whole truth as we, the cinematographers, created it. Let us state emphatically that whatever position on moral rights that Congress should adopt,