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RATE SCHEDULE

This rate schedule applies to Bars. Grills. Taverns. Restaurants Lounges Supper Clubs Night Clubs Piano Bars. Cabarets. Roadhouses and similar establishments where

(a) The highest price (when musical entertainment is provided) of a nationally advertised brand of bourbon, Tye of moth a meas than 85g a drink or

b). If the establishment does not sell liquor but sells heer or if liquor of beer are not sold but the establish ment se'ls set up the highest price (when musical entertainment is provided) of a bottle can draught at vither serving of a nationally advertised domestic beer or an individual set up where heer is not wid in less than 50g

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those who drop their quarters, half-dollars and, I am told, even their dollar bills, into juke boxes.

The answer is that the world of serious music is much closer to, and more dependent on, the world of popular music than is generally realized. To ap preciate why this is so-and how "serious" composers stand to share in royaltës paid by juke box operators-it is necessary to understand how ASCAP and siz lar licensing organizations function.

We must start with the reason for ASCAP's existence. Since 1914 ASCAP has provided an essential public service. It is a clearinghouse through which composers, authors and publishers, and users of copyrighted music, come tögetter to issue or to obtain licenses for performance of music. ASCAP provides the mechanism through which performance rights can be marketed in bulk at enormous savings over the costs that individual negotiations would necessarily entail.

ASCAP's members grant the Society the nonexclusive right to license their works to all who perform them publicly for profit. ASCAP's licensing arrange ments now extend to over 35,000 users of music, ranging from the tavern owner who may use records, tapes, a single instrumentalist or an orchestra, to the three television networks.

To ensure that the various license fees are fair, ASCAP has voluntarily entered into a Consent Judgment in United States v. ASCAP (Civ. 13 8G March 14, 1950, S.D.N.Y.), which provides for judicial determination of a reasonable license fee if ASCAP and any user fail to reach agreement Our counsel, Mr. Bernard Korman, can give you details on how this provision has worked over the past twenty-five years.

ASCAP licenses are valuable to users precisely because they cover many compositions-the works of all of ASCAP's members and the works of tens of th-9sands of music creators who belong to similar foreign societies with which ASCAP is affiliated in all parts of the world.

ASCAP members include composers of serious music, rock n' roll, the great American standards, music from Broadway shows, film music, religious music, jazz, country and western- indeed, all music.

The wide diversity of ASCAP membership is reflected not only in the different types of music, but also in the different degrees of achievement · membership is open to any writer who has had one composition published or recorded, and to any publisher who assumes the normal financial risk of the business. Accordingly, the membership includes the most commercially successful, those who have only one or two successful works over their lifetimes, and those who never write a single successful work. The publishers, too, range from the most successful to the struggling operation which may never show a profit.

ASCAP is not a corporation. We are an unincorporated, nonprofit membership association -really, a kind of cooperative. After operating expetises are deducted, amounts are set aside for foreign societies to pay their members. All remain ng revenues are distributed to the members, 50% to the writers and 50%, to the publishers The distributions are based on an objective survey of performances. Again, our Counsel can explain this distribution system in more detail if you wish.

Many of us who create music rely primarily on one copyright royalties for our livelihood. In addition to our performance royalties, we also receive record royalties. But it is important for you to realize that record sales benefit record companies and performers more than they benefit writers and publishers Consider the mechanical royalty Income earned by writers and publishers from a record that sel's one million copies there are not many- and remember that at the present maximum statutory fee of 2¢ per record, the publisher would recetre $10.000 and $10,000 would be divided among the writers.

Other sources of income for composers, such as sheet music are small. The fart is that careers in music would often be impossible without performance royalties. They are the mainstay for many composers

I have mentioned the many different kinds of music in the ASCAP repertory The Society has a complex distribution system whose purpose is to reward each member fairly for the contribution his works make to the repertory

In deciding how to apportion the writers' share of ASCAP « revennes the most successfuil popular writers do something unique as far as I know they encvata De the development of other writers by a distribution system which channels BonP} from those who earn most to those who earn less

pifcalis, the one hundred or so writers who receive the most “performance credits in the ASCAP survey of performances receive less than the amount they

would receive if they were paid on the same basis as all other writers. These sums "flow down" to writers whose works do not enjoy equal commercial success. Moley, after all, is the essential encouragement one must have. It permits the writer, especially the beginner, to keep writing when, otherwise, he might have to give up his profession.

ASCAP ́s writers also set aside up to 5% of their share for special awards to writers whose works have unique prestige value for which adequate compensation would not otherwise be received. These awards are made by special panels cet sisting of nonmembers who are music experts.

I lave mentioned some aspects of the ASCAP distribution system which promote and encourage authorship. Writers of popular music have also decided that It is important to encourage writers in my area, usually spoken of as classical

of serious music

ASCAP ́s members have agreed to distribute ten times as much to writers and patiishers of serious music as this music earns from licensing performances in ecteerts and recitals The money used for this purpose obviously comes from ASCAP■ other licensees. These include "general" licensees, such as restaurants, hoteis and taverns, and would include receipts from juke box operators, Accorditgy the fees ASCAP would receive for juke box performances under the general revision bill are of vital interest to me and to other serious composers,

And there are other reasons. There is the international aspect we Americans receive far more for foreign performances of our works than we pay to foreign creators for American performances, Juke box performances abroad earn money for our composers; why should we do less for theirs?

Why, indeed should we be parsimonious toward our creators in any aspect of our copyright law" As one who has devoted his life to the creation of music, I am deeply concerned about the term of copyright protection. I am told that sotze Witnesses have appeared before this Committee to argue against the term of afe plus 50 years which you have proposed Mr Chairman, in your bill, and which is consistent with the terms in virtually all civilized countries

My first work was published in 1921 In the absence of enactment of this bel or of a further extension bill, this work will go into the public domain in The United States in 1977. Elsewhere in the world, its copyright term will run at „east 50 years after my death I submit that the United States should protect works of authorship at least as long as most other nations.

Mr. Chairman and Members of the Committee, the achievements of Americans in literature, painting and music are measures of the greatness of our nation. They are honored around the world and we can all be proud of them

You have a rare opportunity. Most people are not in a position to offer more thas lip service to the nation's creators, men and women in every state, large And small. On this eve of our bicentennial you can carry out the intention of the framers of our Constitution. In considering each of the solutions to the complex lasses confronting you, the questions I should like you to repeat to yourself are. Is it fair to authors? Does it in fact, carry out the famous Constitutional mardi'e Io promote the Progress of Scetice and useful Arts, by securing for amated Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries 7**

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Mr. KASTEN METER. We thank you, Mr. Copland, for that fine statement. Your gift for composition is not limited to music apparently. Mr. CoptAnd Ihank you, sir.

Mr. KASTEN MEnr. If you wish to summarize, Mr. Korman!

Mr. Komman. If I may, Mr. Chairman Mr. Mercer has a statement in which he refers at page 2 to a list of organizations which in the past have urged repeal of this so called jukebox exemption. And this, as the chairman knows, has been going on for a very long time. Ine only people supporting the pikebox position have been the jukebox istry telf

The issues now are two, Mr. Mercer says, at the bottom of page 3, they are: What is a fair performance fee; and should that foe be muł jeet to periodic review and adjustment as economie conditions change?

As you know, the Senate back in 1958 concluded that a fair fee would be between $19 and $20, and 8 years later, in 1966, the House Judiciary Committee came to the same conclusion. The bill as passed by the House in 1967 provided for a fee of only $8, and that was agreed to as a compromise because authors and composers recognized the overriding public importance of general copyright revision.

I think it is important to stress that last year the Senate committee stayed with the $8 fee only after providing a mechanism for periodic review and adjustment. That mechanism is the Copyright Royalty Tribunal, which would be empowered to review periodically and adjust all of the compulsory license fees in the bill, the mechanical license fee, the cable television license fee, and the jukebox license fee.

ASCAP supports the Senate committee's approach. We believe a strong case could be made for a fee higher than $8, but we will accept the $8 fee provided it is subject to periodic review and adjustment by the Copyright Royalty Tribunal.

Indeed, we can see no justification otherwise for any statutory fee, and certainly not for a fee of only $8 for jukeboxes. Fees should be arrived at by the normal bargaining process and, if special circumstances are believed to require compulsory licenses and statutory fees, a mechanism for adjustment must be provided. Both sides should know that if they fail to reach agreement on a reasonable fee, an impartial body stands ready to adjust the statutory fee on the basis of a full record.

I might interject here that ASCAP has had 25 years of experience under a consent judgment entered in the District Court for the Southern District of New York where the court has stood ready to fix fees. Perry Patterson, who will be appearing later for the jukebox manufacturers, has represented clients who would have been, in turn, represented by all industry groups who have petitioned the court to determine reasonable license fees. The court has never had to determine a license fee after a full hearing on the merits because the parties have always reached an agreement.

The Music Operators of America has said in the past that small operators could not be expected to bargain equally with the huge organizations like SESAC, BMI, and ASCAP. The fact is, that MOA would represent the industry, and we would sit down with MOA, as I envision the procedure, and work something out with them on the basis of what the current economic conditions are at the time. This is the way things are done in other industries, and I see no reason why the same procedure would not apply here.

There has also been talk in the past about how the rates would drive jukebox operators out of business. Mr. Mercer says at the top of page 6 of his statement:

Creators prosper when users prosper. We certainly have no incentive to seek fees which would drive users out of business. With the Copyright Royalty Tribunal available to adjust statutory fees to reasonable levels as conditions change, subject always to veto by either House of Congress, we anticipate that the parties would engage in good faith negotiations and reach fair agreements, in the same way that business is normally conducted between buyers and sellers. Congress surely should be very wary of writing into the new copyright law any provision which may not only be unfair at the time of enactment, but which is bound to become unfair later, as economic conditions change.

The choice is simply whether Congress wishes to continue to bear the burden of hearing repeated arguments for changes in copyright fees, or whether it would be more efficient to adjust these fees by the Tribunal mechanism. The latter is clearly preferable, in our view.

Moreover, Mr. Chairman and members of the committee:

If the jukebox fee is not subject to adjustment by the Copyright Royalty Tribunal, we may be sure that the cable television and record industries will also seek the same treatment. If the point is won by one such large industry, carefully worked out compromises involving other large industries may well fall apart and much of the progress made in the spirit of compromise will be lost. As a matter of principle, no composer, author or publisher would favor any compulsory license permitting users to perform our works without consulting us as to a fair price. But we have tried to see the point of view of others and to cooperate in reaching a workable compromise in the higher interest of securing enactment of this legislation.

H.R. 2223 is not a perfect bill, but we urge its enactment with one change: It is essential that the jukebox fee, like the other statutory fees, be subject to adjustment by the Copyright Royalty Tribunal.

Thank you.

[The prepared statement of Johnny Mercer follows:]

STATEMENT OF JOHNNY MERCER, COMPOSER-AUTHOR, MADE ON BEHALF OF THE AMERICAN SOCIETY OF COMPOSERS, AUTHORS, AND PUBLISHERS

Mr. Chairman, my name is John H. Mercer. I was born in Savannah, Georgia, and have spent most of my professional life as a songwriter in California where I now reside.

I appear before you today on behalf of ASCAP but, like Mr. Copland, I believe I speak for all creators of music, whatever their affiliation.

I am honored to appear before you today, but of course I am disappointed that this important legislation has not yet been enacted. I appeared before the Senate Copyright Subcommittee in 1967 to urge passage of a bill similar to H.R. 2223, I earnestly hope that the efforts of this Subcommittee will bear fruit.

I have been fortunate in writing songs the public has liked, among them, "On The Atchison, Topeka and Santa Fe" (1946), "In the Cool, Cool, Cool of the Evening" (1951), "Moon River" (1961) and "Days of Wine and Roses" (1962), each of which won a Motion Picture Academy Award. Of course, like all other songwriters, I have written many works that have had no success. That's so common it can't even be called unfortunate. What is unfortunate is that when my songs were most popular, many jukebox operators made a good deal of money from members of the public who paid to hear them. I received nothing for those performances.

My hope is that the brilliant young writers of today-the Carole Kings, Neil Diamonds, Stevie Wonders, and John Denvers--whose works are now the raw material of the juke box industry will be more fairly treated than prior generations of songwriters.

There is, fortunately, no need to repeat in any detail the arguments made so often in the past as to why the so-called juke box exemption should be repealed. Rather, we should consider what all of the following meant when they urged its repeal:

American Bar Association

American Patent Law Association

Association of the Bar of the City of New York

Authors League of America, Inc.

California Bar Association

Copyright Office

Department of State

Federal Bar Association of New York, New Jersey and Connecticut

General Federation of Women's Clubs

Library of Congress

National Federation of Music Clubs

National Music Council

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