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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 appreciate why this is so—and how "serious” composers stand to share in royalties paid by juke box operators-it is necessary to understand how ASCAP and similar 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 througb wbich composers, authors and publishers, and users of copyrighted music, come together 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 arrangements 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. 13-95, 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 thousands 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 expenses are deducted, amounts are set aside for foreign societies to pay their members. All remaining 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 our 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 sells one million copies—there are not many—and remember that at the present maximum statutory fee of 2¢ per record, the publisher would receive $10,000 and $10,000 would be divided among the writers.
Other sources of income for composers, such as sheet music, are small. The fact 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's revenues, the most successful popular writers do something unique as far as I know-they encourage the development of other writers by a distribution system which channels money from those who earn most to those who earn less.
Specifically, 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.
Money, 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 consisting of nonmembers who are music experts.
I have 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 or serious music.
ASCAP's members have agreed to distribute ten times as much to writers and publishers of serious music as this music earns from licensing performances in concerts and recitals. The money used for this purpose obviously comes from ASCAP's other licensees. These include "general" licensees, such as restaurants, hotels and taverns, and would include receipts from juke box operators. Accordingly, 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 perforinances, 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 some witnesses have appeared before this Committee to argue against the term of life 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 bill, 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 least 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 than líp 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 issues 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 mandate "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries?"
Mr. KASTENMEIER. We thank you, Mr. Copland, for that fine statement. Your gift for composition is not limited to music apparently.
Mr. COPLAND. Thank you, sir.
Mr. KORMAx. 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. The only people supporting the jukebox position have been the jukebox industry itself.
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 fee be subject to periodic review and adjustment as economic 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 mechaniral 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.