a form that he claimed would harm the "artistic integrity" of the work. Such a proposal is unwarranted and unwise. Video dealers and their consumers would be harmed, in several ways: First, writers or directors could insist that their films be letterboxed, rather than panned and scanned. So-called letter-boxing is a technique used in order to present a film on square TV screens, but within a viewing area of approximately the same height to width ratio as a theater screen. The entire picture is compressed into a smaller rectangle with black bands filling in the void that results at the top and the bottom of the screen. It is the experience of our member dealers that, with few exceptions, the public finds “letterboxing" a distracting and annoying interference with the enjoyment of the film. After four decades of television viewing, they are accustomed to a fully filled screen, not one cut off at the top and the bottom. In addition, letter-boxing substantially diminishes picture resolution on the TV because the picture is squashed into a smaller space. Details are obscured. Most of our customers find the smaller and poorly detailed letter-boxed picture is far less satisfactory. This customer dissatisfaction with the letter-boxing has been the general experience of the dealers in our area. Number two, writers and directors could prevent conversion of films to videocassette in any format. Directors or writers could claim that both letter-boxing and panning and scanning processes unacceptably adulterate the "artistic integrity" of their films. Their veto power would totally deny home video access to a number of important films. Thirdly, writers and directors who are not opposed in principal to panning and scanning would nevertheless use the economic leverage of their "moral rights" to increase their compensation, in exchange for permitting their films to be processed for the videocassette format. We, the retailers, would have to absorb that increased cost or pass it on to our customers. Though some directors have claimed that they would never use any "moral rights" for financial bargaining, their new leverage would inevitably affect the outcome of commercial negotiations. Four, "moral rights" could lead to very substantial delays in the release date of videocassettes. This is the likely outcome for many films. In part, that is because the process would be so unwieldy. You have heard today what a Pandora's box this area involves. It will be difficult to limit the number of persons involved. The delay caused by extended negotiations to obtain artistic approval of home video versions could significantly reduce the market demand for those videocassettes. Number five, in addition to harming our businesses and our customers directly by restricting or delaying access to particular films, a new "moral rights" scheme also would be harmful in the aggregate by reducing the total number of motion pictures which studios and other investors are able to underwrite. As the problem noted above reduces the post-theater markets for films, studios will be forced to produce fewer films overall. In addition, I would like to comment on the labeling proposals. Some approaches envision a labeling scheme. Under such labeling requirements, videocassettes would have to disclose that changes had been made without the approval of key participants in the creation of the original work. At first blush, this less drastic approach might seem to be a modest, reasonable option. But here again, VSDA urges you not to focus solely on relationships between the studios and their screenwriters and directors. You should carefully review and keep in mind the realities of retailing, and the significant burden such a scheme would place our members and their customers. Who would be responsible: For determining that such disclaimers were included; for reviewing the adequacy of disclaimers; or for determining whenever a disclosure was required in the first place? Placing any of those responsibilities on the dealer would be extremely unfair. Video dealers would be innocent bystanders who should not be penalized with regard to disputes about which they have no direct knowledge and over which they have no control. We also would not agree with the implication that such a disclaimer might give our customers, namely, that they would find that the videocassette version was of significantly inferior quality, or not enjoyable. In conclusion, let me make two general observations. First, as you know, the motto of the home video industry has long been "freedom of choice" for America's consumers, freedom to rent or purchase the films they wish to see. If consumers object to the format producers choose for videocassettes, they will let us know loud and clear and we will tell the film production industry. But the fact is that most of our customers do not enjoy letter-boxed films on their TV screens, which are so much smaller than those in the movie theaters. We have seen claims that very large wall TV screens and HD TV will soon be available and will allegedly diminish this problem, both because of their size and because they will more closely approximate the shape of theater screens. We urge the subcommittee to remember that it will be many years before such luxury becomes a reality for the average American family trying to find af fordable entertainment on a tight budget. There are still millions of television screens in American homes that are of modest size. Letter-boxing is a particularly annoying distraction and distortion of picture resolution for such smaller sets. Second, the existing American system for distributing films through theaters, home videocassettes, television and cable broadcast has been an unparalleled success in making these films widely accessible to the public. It is the envy of the world. Given the many other pressing matters before the committee and the maze of issues which legislative "moral rights" entails, we urge you to follow the old adage, "If it ain't broke, don't fix it." This system is not broken. New legislation is not needed. Mr. KASTENMEIER. Thank you, Mr. Fogelman. [The prepared statement of Mr. Fogelman follows:] Statement of Louis Fogelman, on Behalf of The Video Software Dealers Association At the Copyright Moral Rights Hearing Before the Subcommittee on Courts, Intellectual Property and of the House Judiciary Committee on Copyright Moral Rights in Films January 9, 1990 Thank you, Mr. Chairman. I am Louis Fogelman of Los Angeles, President of Video Place in California. I am a member of the National Board of Directors of the Video Software Dealers Association, or "VSDA." VSDA is the national trade association of home video distributors and retailers, and represents about 20,000 of the roughly 30,000 retail home video stores across the country. I welcome this opportunity to present the position of VSDA on the issue of so-called "moral rights" in regard to the motion picture industry, particularly the processing of films for viewing on television screens in such formats as prerecorded videocassettes, broadcasts and cable. The phrase, "moral rights," is the standard reference in European legal doctrine to an artist's right to protect the integrity and reputation of his work. Our basic point is that Congress should consider the full range of public interests involved in this complex issue. Congress should not narrowly, and artificially, view the matter as merely a dispute between producers and directors. In fact, Mr. Chairman, we strongly agree with your comment last March, when the Copyright Office Report was released, that proponents of legislation not only have the burden of proving that such a change was justified, but also must show that any legislation is consistent with the interests of the film distribution system and the viewing public. I will not dwell on the specific issue of colorization which VSDA addressed extensively during deliberations on the Interior Appropriation bill in the last Congress except to reiterate that most VSDA members support the right of the customers to see colorized versions of older films. This will also create the opportunity for new generations of viewers to enjoy great film classics they might otherwise pass by. Our focus today is the creation of videocassettes and related technological adjustments, such as panning and scanning. As other witnesses have detailed, panning and scanning is the principal technique used to adapt films shown on theatre screens so they also can be enjoyed on standard TV screens. Congressional establishment of new moral rights with regard to such mechanical processes would - 2 First, the Copyright Office report, "Technological Alterations to Motion Pictures," itself notes that any effort to retroactively create such rights regarding pictures already made would raise very serious questions of constitutionality -- and fundamental fairness. It would be changing the law after the players in the motion picture industry had committed resources to making a film on the basis of the copyright rules of the game operative at that time. Second, there is the fundamental question of why Congress should intervene at all in the intricate web of labor management negotiations, rights of consultation and collective bargaining agreements that have been painstakingly developed between the motion picture studios and the writers and directors. That complex relationship is unique to the United States; it precludes simplistic comparisons to "moral rights" regimes in other countries. These issues will be explored by other witnesses. VSDA's main concern is that the Subcommittee not view the issue too narrowly, as merely a battle between screenwriters and directors, on the one hand, and studios, on the other. It is crucial that you keep in mind the public interests ultimately to be served. They include the concerns of thousands of small businesses, who provide motion pictures in videocassette form to the public and, even more importantly, the preferences of our customers - millions of Americans, who look to home video for affordable family entertainment. Claims by others that they represent the "public interest" should be scrutinized carefully. The proponents of moral rights legislation implicitly assume, incorrectly, that altering the film so that it may be viewed in the most enjoyable form on television screens necessarily lessens the "artistic quality" of the film. That proposition confuses two very distinct concepts: "artistic value," on the one hand; and the directors' personal preference as to how they would like the film to be viewed on television size screens. In the first place, there are a great many artistic contributors to the film. If the director and the screenwriter prefer to see the film on television in a letterboxed fashion, while all the leading actors prefer to see it in a panned or scanned version, who is to say which version is of "higher artistic quality" for purposes of viewing on television? In any event, artistic quality or value is inherently subjective. Certainly, many esteemed art critics and fine arts scholars often rate particular art works as being of lesser artistic quality than would the creating artist himself. Who is correct? The same analysis holds in the case of a film director, on the one hand, and the film critics who often disagree with the directors' view of the film's artistic qualities. In short, beauty is indeed in the eye of the beholder. Therefore, it also is difficult to separate the concept of the "public interest" from the question of how to afford the public the greatest access to films, in the format that they most enjoy viewing. How else could one better define the public interest? Unless it is anchored concretely to consumer preference, the abstract notion of "greater public interest" is too vague and elusive. It only serves to highlight the dangers of the Congress' trying to judge which art forms, and methods of dissemination, best advance the "public interest." - 3. Veto Over Technology It is not clear precisely how any particular legislative scheme would create "artist's moral rights" in the motion picture industry. But the inevitable result of such schemes would be to increase the leverage that directors and screenwriters possess in their bargaining with motion picture studios. The added leverage would result from an "artist's moral right" to veto any exhibition of his work in a form that he claimed would harm the "artistic integrity" of the work. Such a proposal is unwarranted and unwise. customers would be harmed, in several ways: Video dealers and their (1) Writers or directors could insist that their films be letter-boxed, rather than panned and scanned. So-called "letter-boxing" is the technique used in order to present a film on square TV screens, but within a viewing area of approximately the same height-to-width ratio as a theatre screen. The entire picture is compressed into a smaller rectangle, with black bands filling in the void that results at the top and bottom of the screen. It is the experience of our member dealers that, with few exceptions, the public finds "letter-boxing" a distracting and annoying interference with their enjoyment of the film. After four decades of television viewing, they are accustomed to a fully filled screen, not one cut off at the top and bottom. In addition, letter-boxing substantially diminishes picture resolution on the TV because the picture is squashed into a smaller space. Details are obscured. Most of our customers find the smaller and poorly detailed letter-boxed picture far less satisfactory. This customer dissatisfaction with the letter-boxing has been the general experience of the dealers in our area. (2) Writers and directors could prevent conversion of films to videocassette in any format. Directors or writers could claim that both letter-boxing and panning and scanning processes unacceptably adulterate the "artistic integrity" of their films. Their veto power would totally deny home video access to a number of important films. (3) Writers and directors not opposed in principle to panning and scanning would nevertheless use the economic leverage of their "moral rights" to increase their compensation, in exchange for permitting their films to be processed for the videocassette format. The studios would pass on that increased cost of production in the form of higher prices charged to distributors and, in turn, video retailers. We- the retailers would have to absorb that increased cost (although our margin of profit is far smaller than those of screenwriters and directors) or pass it on to our customers. - Though some directors have claimed they would never use any new "moral rights" for financial bargaining, their new leverage would inevitably affect the outcome of commercial negotiations. Unfortunately, since this initial hearing was held prior to the directors' circulating any specific legislative proposals for comment by other interested parties, it is difficult to comment in detail on this vaguely outlined concept. We assume that |