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Furthermore, it is important to recognize how the $8 rate was arrived at in 1967. It was the result of a compromise worked out by the Copyright Office with the understanding that this would remove one of the last barriers to immediate copyright revision. Thus, the consideration was that the jukebox owners would begin paying in 1968 at the rate of $8 a box. Obviously, that consideration is no longer valid because there has been no copyright revision bill, and, more innportant, the jukebox owners have not paid anything during the past 8 years.

The above is in summary form and we would be pleased to submit, in writing or at a hearing, any additional comments or information which you, or your subcommittee, may desire. We, of course, would like to reserve our right to comment further as the legislative process on copyright matters unfolds in the 94th Congress.

Mr. KASTENMEIER. The Chair should observe that 10 years ago here Mr. Herman Finkelstein, Mr. Korman's predecessor, represented ASCAP, and was it not Sydney Kaye who represented BMI for so many years, both very distinguished people, but apparently they have both retired in terms of actively representing the organizations.

Mr. KORMAN. Perhaps, Mr. Chairman, they just got discouraged. I notice that the same spokesmen are continuing to appear for the jukebox industry.

Mr. KASTENMEIER. Well, I should hope not.
Mr. Oliver, we will call on you.

TESTIMONY OF SY OLIVER, COMPOSER, ACCOMPANIED BY EDWARD

CHAPIN, GENERAL COUNSEL, BROADCAST MUSIC, INC. Mr. OLIVER. Mr. Chairman and gentlemen, my name is Sy Oliver. I am an arranger/composer and orchestra leader. I wish to speak to the removal of the jukebox exemption from payment for use of copyrighted music.

May I interject here, I am not speaking to the fiscal details involved. I am a writer. I do not have those facts at hand, and I am sure that that will be taken care of. But I would just like to speak my own position as a writer.

Gentlemen, this exemption was established by a law written in the year 1909. One year before I was born and many years before the music industry, as it exists today, came into being. And yet this law, written in good faith but for another time and totally different circumstances, still pertains.

I have been a professional musician since 1928. I was a member of the Jimmie Lunceford Orchestra when it achieved international attention in the thirties, ranking in popularity with the great Duke Ellington. Many of my compositions, as recorded by that orchestra, were outstanding hits and are currently popular both in sales and radio plays as well as jukebox plays. I am paid writers royalties from record sales, performance royalties from radio plays but nothing from 40 years of jukebox plays.

During the years 1939 through 1943 I composed and arranged for the Tommy Dorsey Orchestra. Again many of my compositions such as "Opus One" and "Yes Indeed" became famous record hits. The latter two, according to BMI performance records, each enjoyed more than a million radio performances by the midfifties. Again I was paid for record sales, radio performance. Nothing for jukebox plays which exceeded radio plays many times.

After my Army service I became musical director for Decca Records. Currently, I am leading my own orchestra for an extended engagement at the Rainbow Room in Rockefeller Center, New York City.

The foregoing is to establish that I am indeed involved in the problem at hand.

As a member of the Jimmie Lunceford Orchestra, I began recording for the Decca Record Co. in 1934. It was about this time that the situation with which we are faced today was born--the time when the writers and publishers made a major sacrifice for the then infant jukebox industry. More of this later.

It should be noted that at the time the law exempting jukeboxes from payment for use of copyrighted music was written, there was no jukebox industry as we know it. Machines for playing records were to be found in cafes and saloons along with roll-playing pianos but they were the exclusive property of the proprietors--solely for the entertainment of his customers. It is unlikely that the proprietor ever realized the cost of the machine from its revenue, certainly not a profit. Hence the exemption. Gentlemen, the exemption was decreed because no profit was being derived from the use of copyrighted music. That is not the case today. Nor could the legislators of 1909 be expected to antieipate the conditions existent in 1975.

So it was with the writers and publishers I mentioned earlier on. Never dreaming in 1934 that the jukebox industry would become the giant it is today, they agreed to reduce their royalty rate by 50 percent which it remains today. to permit the sale of a 35-cent record as opposed to the standard 75-cent price. This 35-cent record was for the benefit of the jukebox sales. Admittedly a shortsighted policy in hindsight. But, rightly or wrongly, the end result was, the tail is finally wagging the dog. For today, I firmly believe that more profit is made from the jukebox play of copyrighted music than any other single source. For this the jukebox industry pays nothing, making the copyright law as it exists meaningless. I do not believe the legislators of 1909 intended this.

It should be noted that all other creative work produced by Americans is protected by our copyrighted code.

For instance, books published for public sale but private use cannot be used in whole or even in part for purposes of profit such as movies, TV, or stage plays without the permission of, and compensation to the owner of copyright or his a gent.

Conversely, musical recordings employing copyrighted music and similarly published for public sale but private use are being used for purposes of profit by the coin machine operators with no return to the owners of copyright. Much as though MGM had made "Gone With the Wind" without compensation to the owner of copyright.

So, on behalf of all writers and publishers, I ask for the removal of the jukebox industry's exemption from payment for the use of copyrighted music for purposes of profit-a contingency not anticipated by the writers of the code of 1909 and still in effect.

Thank you.
[The prepared statement of Sy Oliver follows:]

STATEMENT OF SY OLIVER, REPRESENTING BROADCAST MUSIC, INC. My name is Sy Oliver. I am an arranger/composer and orchestra leader. I wish to speak to the removal of the jukebox exemption from payment for use of copyrighted music.

Gentlemen, this exemption was established by a law written in the year nineteen hunderd and nine! (1909). One year before I was born and many years be fore the music industry, as it exists today, came into being. And yet this law, written in good faith but for another time and totally different circumstances still pertains.

I have been a professional musician since 1928. I was a member of the Jimmie Lunceford Orchestra when it achieved international attention in the thirties, ranking in popularity with the great Duke Ellington. Many of my compositions, as recorded by that orchestra, were outstanding "hits" and are currently popular both in sales and radio plays as well as jukebox plays. I am paid writers royalties from record sales, performance royalties from radio plays but nothing from forty years of jukebox plays.

During the years 1939 through 1943 I composed and arranged for the Tommy Dorsey Orchestra. Again many of my compositions such as OPUS ONE and YES INDEED became famous record "hits.” The latter two, according to BMI per. formance records each enjoyed more than a million radio performances by the mid-fifties. Again I was paid for record sales, radio performance. Nothing for jukebox plays which exceeded radio plays many times.

After my Army service I became musical director for Decca Records. Currently I am leading my own orchestra for an extended engagement at the Rain. bow Room in Rockefeller Center, New York City.

The foregoing is to establish that I am indeed involved in the problem at hand.

As a member of the Jimmie Lunceford Orchestra, I began recording for the Decca Record Company in 1934. It was about this time that the situation with which we are faced today was born-the time when the writers and publishers made a major sacrifice for the then infant jukebox industry. More of this later.

It should be noted that at the time the law exempting jukeboxes from pay. ment for use of copyrighted music was written, there was no jukebox industry as we know it. Machines for playing records were to be found in cafes and saloons along with roll-playing pianos but they were the exclusive property of the proprietors . . . solely for the entertainment of his customers. It is unlikely that the proprietor ever realized the cost of the machine from its revenue, certainly not a profit. Hence the exemption. Gentlemen, the exemption was decreed because No Profit was being derived from the use of copyrighted music. That is not the case today. Nor could the legislators of 1909 be expected to anticipate the conditions extant in 1975.

So it was with the writers and publishers I mentioned earlier on. Never dreaming in 1934 that the jukebox industry would become the giant it is today, they agreed to reduce their royalty rate by 50% which it remains today, to permit the sale of a 35¢ record as opposed to the standard 75¢ price. This 35€ record was for the benefit of the jukebox sales. Admittedly a short-sighted policy in hind sight. But, rightly or wrongly the end result was-the tail is finally wag. ging the dog. For today, I firmly believe that more profit is made from the juke box play of copyrighted music than any other single source. For this the jukebox industry pays nothing, making the copyright law as it exists meaningless. I do not believe the legislators of 1909 intended this.

It should be noted that all other creative work produced by Americans is protected by our copyright code.

For instance -books published for public sale but Private use can not be used in whole or even in part For Purposes of Profit such as movies, TV, or stage plays without the permission of and compensation to the owner of copyright or his agent.

Conversely, musical recordings employing copyrighted music and similarly published for public sale but private use are being used For Purposes of Profit by the coin machine operators with no return to the owners of copyright. Much as though MGM had made Gone With The Wind without compensation to the owner of copyright.

So-on behalf of all writers and publishers—I ask for the removal of the juke box industry's exemption from payment for the use of copyrighted music for purposes of profit. ... a contingency not anticipated by the writers of the code of 1909 and still in effect.

Mr. KASTENMEIER. Thank you, Mr. Oliver. We shall ask questions after all the witnesses have concluded, and the Chair will not attempt to identify the compositions or the accomplishments and honors that may be represented by our very distinguished

witnesses. I assume the people are sufficiently aware of your accomplishments.

The Chair would also observe for the benefit of the subcommittee that this morning we have three performance rights societies, which for all practical purposes, represent 99 or more percent of the authors and composers in America. And on the other economic side of the issue there is one predominant organization, the Music Operators of America, the association of jukebox operators. And also a representative of the manufacturers of those jukeboxes who will also, of course, have an economic interest in the copyright and the question that we are disposing of, hopefully.

Mr. Chip Davis and Mr. Ciancimino. Or did you wish to withhold until you determine whether or not Mr. King will arrive!

Mr. Chapin. I have since heard that it does not look like he is going to arrive, so with your permission, could I read portions of his statement?

Mr. KASTEN MEIER. Yes, you may. And because we are losing time, Mr. Chapin, if you would do so as concisely as you can. I see it is a short statement.

Mr. Chapis. It is a very short statement, and I do not propose to read the first page and one-half which outlines who he is, what he has written and so forth. I will pick up in the middle of page 2 where he gives his conclusions and which are also BMI's conclusion. And this, as I say, is the statement of Mr. Frank Peewee King.

Let us look at the economics of the coin machine business, particularly as it atfects a songwriter. A record of Tennessee Waltz sells for $1.25. Of this, the writers, two of us, Redd Stewart and me make 1 cent. Half to me, half to Redd. This is all the jukebox operators actually pay writers for the songs they put into their machines; 1 cent per machine. The jukebox operator gets at least a dime-10 cents-each time Tennessee Waltz' is played on his jukebox. Today's phonograph records will play up to 1,000 times before wearing out completely. This means that it is possible for the jukebox operator to make at least $100 per machine from 'Tennessee Waltz' from a record that he paid $1.25 for, if he had to buy them retail and he usually doesn't. Out of this Redd and I split 1 cent, one ten-thousandth of the take.

“The jukebox industry has grown by a half since writers last testified before the Congress 10 years ago. This can hardly be true of a socalled suffering business. Over 750,000 machines are now in use. I keep reading about video disks, and other entertainment devices that use music now being perfected and readied for the market. Knowing the business shrewdness and imagination of the coin machine people, I know that good and prosperous use will be made of these machines. I don't want any future coin machine use of music to be discounted, or written out of a new law as it was out of the last one, the 1909 act we have today. : "Jukebox operators should pay writers for the performances of their songs. All other American users do, users in other countries do as well. When an American song is played in a French jukebox the American composer is paid for the performance. When the same song is played on an American machine, he is not paid for the performance.

"TV stations and networks, radio stations and networks, ballrooms, concert halls, restaurants, night clubs, skating rinks, background music services, airlines and others pay for music, even though music is not their only product. But music is the jukebox operators only product. Yet the jukebox operator is the only one not paying writers and publishers for music.

57-746 0 . 76 - pt. 1 • 26

“What we ask you to do is to pass a law that removes the unfair jukebox exemption. We ask you to fix a rate of payment that is fair, just and proper. We ask you to undo years and years of free riding on the talent of songwriters. That's what I ask you to do on behalf of the 40,000 writers and publishers in BMI for whom I speak.”

[The prepared statement of Frank Peewee King follows:]

STATEMENT OF FRANK PEEWEE KING, REPRESENTING BROADCAST MUSIC, INC.

I am Frank Peewee King and I presently live in Louisville, Kentucky, being born and raised in Wisconsin. I appear today representing BMI-Broadcast Music Inc.--and also speaking for myself as a writer and a publisher

I have written and collaborated on 300 songs, or more. I have written such songs as Tennessee Waltz, Slow Poke, You Belong to Me and Bonaparte's Retreat. All of these have been number one on the trade paper charts and all of them are still available on 45-rpm discs for play by juke boxes.

In 1974 I was elected to the Country Music Hall of Fame in Nashville. That's a great honor, equal to that when Tennessee selected my song to be its state song. That gave me a thrill, and I could understand how Rodgers and Hammerstein felt when Oklahoma honored their song.

I have been writing and playing professionally since I was 14 years old. My dad was a polka player in Wisconsin and I grew up as a youngster with a concertina in my lap. That started me writing country and folk and popular music. I have written a lot of polka music as well. Now, polka music doesn't get played on radio or television very much. But you can be sure that it gets a good go round on coin machines.

I am probably the only witness you are going to hear today who's been a longtime juke box customer It's a part of my way of life. I do a lot of touring around the country, most of it by bus, going from one date to another with my group. And every diner, bus station or truck stop we come to has a big, shining and expensive juke box. I have put a lot of coins-nickels, dimes and now quar. ters—to hear music-very often my own. But, although I have been a good customer, and an even greater supplier of what once used to be called nickel nabbing music-I have never gotten even one nickelback for the use of my music.

Being a businessman as well as a composer I like to think out problems in terms of economics.

Let's look at the economics of the coin machine business, particularly as it affects a songwriter. A record of Tennessee Waltz sells for $1.25. Of this, the writers, two of us, Redd Stewart and me, make 1¢. Half to me, half to Redd. This is all the juke box operators actually pay writers for the songs they put into their machines. One cent per machine. The juke box operator gets at least a dime-10 cents-each time Tennessee Waltz is played on his juke box. Today's phonograph records will play up to 1,000 times before wearing out completely. This means that it is possible for the juke box operator to make at least $100.00 per machine from Tennessee Waltz, from a record that he paid $1.25 for-if he had to buy them retail and he usually doesn't. Out of this Redd and I split one cent-one ten thousandth of the take.

The juke box industry has grown by a half since writers last testified before the Congress ten years ago. This can hardly be true of a so-called suffering business. Over 750,000 machines are now in use. I keep reading about video disks and other entertainment devices that use music now being perfected and readied for the market. Knowing the business shrewdness and imagination of the coin machine people, I know that good and prosperous use will be made of these machines. I don't want any future coin machine use of music to be discounted, or written out of a new law as it was out of the last one ... the 1909 act we have today.

Juke box operators should pay writers for the performances of their songs. All other American users do, users in other countries do as well. When an American song is played in a French juke box the American composer is paid for the per

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