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inclined to go to the owner of a copyrighted work and buy something that is shown in one of these isolated areas!

What I am trying to project to you very inart fully is that it seems to me there is a difference betweeen local advertising and regions' art national advertising, and that to the extent that national advert blanket an area, they deny to a copyright owner the opportunity to his work to a local advertiser. Have I made that point clear! Mr. RAILSBACK. Will the gentlemen yield?

Mr. WIGGINS. Yes.

Mr. RAILSBACK. Oak Park Savings and Loan carry ball games ard they come into my area, and they come in with local advertising, or Koons.

Miss DA COSTA. I'm not familiar with those.

Mr. RAILSBACK. His point is-if the gentleman will yield furtheryou may not always have a regional advertiser.

Miss DA COSTA. Let me just explain to you how that works, starting with the national advertiser. A national advertiser presumably has ra tional distribution, and his product can be bought across the count Therefore, any advertising that he buys in one market, or an accura lation of markets, his advertising is worth putting it on that data because his product is everywhere.

A regional advertiser has a similar situation within the region area that they have product distribution.

As far as the local, the truly local advertising that you are descrb ing, sir, that advertiser feels, when he is investing money on a tee vision station within his market that the medium is strong enough to get him customers, even though he pays a 10-percent premium for those homes that are not potentials for him.

Mr. WIGGINS. Well, perhaps that's so. Your illustration mentioned New York City and Oswego, I believe. I would think there is a p sibility at least that a used car dealership in Oswego, which m. 21 otherwise be in the market to buy a movie, is not going to do so because that movie is being transmitted to New York City. And that to an extent it is true that a copyright owner is deprived of an opportun ty to sell his product in Oswego.

Miss DA COSTA. But if we examine hard research data that is ava able to us by county, where we can see the signals and stations t'at are being viewed by the homes in the county, we see that 10 per ent of a county's homes views signals that are imported from as far away as New York. And consequently the potential for that local car dé tributor is 90 percent of the market.

Mr. WIGGINS. Well, I would like to be exposed to this hard data on which you base your conclusion. I realize the conclusion is stated in the testimony, but suppose that you worked out the figures in support of this and, if you have them, would make them available to the committee Mr. Chairman, I would appreciate it.

MISS DA COSTA, Sir, I did prepare a selected list of counties in wih I looked at the actual viewing as it is reported by the Nielsen Co.. which is a recognized research organization. This is the kind of infor mation, if you will allow me to just mention it.

For example, in Oneida County, which is in the State of New York, we found that 3.4 percent of the households viewed the WNEW IV station in the course of a whole week.

Mr. KASTENMFIFR. The chairman will interrupt to announce this is the second ring for a vote on the House floor.

Mr. DANIELSON. Are we coming back ?

Mr. KASTEN MEIER. No, we are not coming back.

Mr. DANIELSON. Mr. Chairman, may I suggest that the pamphlets the witnesses placed on the table- they don't belong in our recordbut may we receive them for our files, for the record!

Mr. KASTEN MEIER. Yes. Any materials that the witnesses have made available.

The gentleman from New York, Mr. Pattison?

Mr. PATTISON. Well, I had some, but we are not going to have time, Mr. KASTEN MEDFR. On behalf of the committee, we thank you, Mr. Bresnan, Miss Da Costa, and your associates, for appearing here today. The Chair will announce that tomorrow at 9.30 the subcommittee will convene, first to hear briefly the news archives issue with two witfesses; and then, at 10 o'clock witnesses generally supporting section 111, more particularly from the broaden-ting industry.

Until that time, the subcommittee will stand adjourned. [The prepared statement of William J. Bresnan follows:}

STATEMENT OF WILLIAM J Bresnan, Senior VICE PRESIDENT AND PRESIDENT, Cable Division, TELEPROMPTER CORP.

Good afternoon. I am William J Bresnan Senior Vice President of Tele prompter Corp and President of our Cable Division. Teleprompter is the nation s largest cable television cot pany, having approximately twice as many cable tele vasiota mislim ribers as the second largest company

On my right is Jay Rocks, a partner in the firm of Hogan & Hartson On my left is Jacqueline Da Costa Director of Media Information and Analysis at Ted Rates & Co, and to her left is Barry P. Sillon, Teleprompter a Vice President and Geteral Contasel

Teleprompters position on copyright is straightforward We believe cable televisi ni systems should not be required to pay 43) copyright fee for the carringe of broadcast signal

To understand this position. It is necessary to understand a basic fact about the brdast inntry a fact which makes that tnd astry unique among all other distributors of es par ghted material The broadcaster unlike the Lovie pro dacer of the book pdi, her distt what potiuted product. What the broad caster sells is the affenfion of the Viewers. The purchawr is the advertiser The n. reviewers the be il aster can deliver to the advertiser the more the adver er will pay And the n. re the adverteer jain the note money is avanabie for the brud nster fic pay the o pyright owner

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Before going on to the second example, let's pause for a moment to ex suder alternative (3)—where the prospective viewer neither buys the tall antenna: € subscribes to the cable service but simply doesn't watch the programs broad ast by our hypothetical television station. If this happens, what is the result? The station has a smaller audience and therefore its advertising spots are less pʻ tractive to potential advertisers. So the station gets less money. And this meats there is less money available to the station to pay the copyright owzer From this we can see that cable television, far from stealing from the experti owner, by increasing the size of the broadcaster's audience actually increases. "20 monies paid to the copyright owner.

Now consider a second situation. In this case imagine a television station in New York City whose programs are imported-via microwave hops – by a cable system and retransmitted over the cable to the cable television system's subscribers a Oswego, New York who otherwise would not be able to view the New York C7 station.

Is this situation really any different from our first example? Is the copyright owner somehow damaged by the action of the cable station? Is he, perhija de prived of the ability to exploit his creation in Oswego after it has been wet 'bere on the cable?

The answer to all these questions is, no. Because of the nature of broadcast e nomics, the copyright owner cannot be injured by the cable system's impring the New York City station into Oswego. And this is true even without estos dera tion of the complicated FCC exclusivity rules which seek to give added prove tion to the copyright owner and which may require the cable system to deve programming so as to allegedly protect the copyright owner's markets

As in the first example, by showing the imported programs in Oswego the ogre system increases the audience of the New York City station. And this is 1-8 just a theoretical increase. The rating services-Nielsen and ARB spend are sums of money to keep track of cable subscribers with the result that event single cable subscriber is accounted for in their surveys and so finds has way into some television station's rate base. Thus, by simply checking in Nielsen, we find for example, that

In San Luis Obispo County, California, 30% of the television himm view the Los Angeles independent and network stations on a reguar “ank In Grant County, New Mexico, 51% of the television homes New De El Paso network stations on a regular basis,

In Chemung County, New York, 19.5% of the television homes view the New York City independent stations on a regular basis,

In Lane County, Oregon, 20% of the television homes view the Portland independent and network stations on a regular basis, and

In Sweetwater County, Wyoming, $1% of the television homes view the Salt Lake City network stations on a regular basis.

In these cases, and in countless others, such coverage would be impossi le without cable television.

This fact has not been lost on the broadcasters For example, the litera"." put out by the Association of Independent Television Stations, in text av panying these illustrations in which the white areas show the reach of pendent stations as enhanced by cable television, states

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"The accompanying illustrations show how cable television can dramat.” I increase the physical coverage area of independent stations, expuid.ge ht influence far beyond the perimeters of the local television market

"Advertisers on cable-connected independent stations s?re in this expat tand TV coverage reaching a bonus audience of conseimers as vacable to me naʼizal regional advertiser as those situated within the defined local matart area."

As a further illustration of this point, I have here a stack of pra brock gres put out by television stations Fach one takes pass to post o its a idence includes cable subser hers in distant markets. So we fed

KTLA, an indeper lent station in Los Angeles, claims a gry ster patent audience than any other Los Angeles station network or indepe-taletit station credits its “significant penetration by way of CATV «ta", ið WGN. an independent station in Cl. ago, ela "is wilstantial viewing far beyond the reach of its signal by virtue of calde systetis

Terate card of KSI, a network aflate in Salt Lake City, shows coverage by KSI. of “Mountain America' even extending, thanks to cable teveva. A as far as northern Wyoming

The list could go on and on. But rather than belabor the point, I'll simply submit these brochures themselves to the Committee.

What do the extra viewers that cable adds to the audience of these stations mean to the relationship between station and advertiser? It means that the station time is more valuable and so the advertiser pays more. Listen to what Moss Da Costa who is in charge of all media related research at Ted Bates, the nation's fifth largest advertising agency, says:

Viewing occurring on CATV systems has been included in surveys for quite some time in the total audience reported for individual stations. The industry has generally used these total audience figures to establish rates and corresponding cost efficiencies. This practice compensates stations for all viewing including that which takes place within CATV homes (both inside and outside the range of the station's off air reception ),”

To go back to our example, we see that the copyright owner whose creation is broadcast by the New York City station and imported, by cable, to viewers in Oswego has not been deprived of the chance to earn money by showing his prod action in Oswego For the advertising revenues to be derived from showing the program to the cable subscribers in Oswego have already been derived by the New York City station. And, as a result, the New York City station will pay the copyright owner more than if the station were unable to reach the Oswego audience

To allow the copyright holder to be compensated again this time directly by the Oswego calle system would be giving him the windfall of an undeserved second payment. This is a windfall that neither the cable television industry nor the 15% of the American households which are cable television subscribers can afford

Thank you.

[Whereupon, at 2:55 p.m., the subcommittee adjourned, to reconvene at 9:30a.m., Thursday, June 12, 1975.]

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