VIII. BROADCAST LOGS OF FIVE ETV STATIONS IN NEW YORK STATE

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WNED, Dec. 8, 1966

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COPYRIGHT LAW REVISION

FRIDAY, MARCH 17, 1967

U.S. SENATE,

SUBCOMMITTEE ON PATENTS, TRADEMARKS, AND COPYRIGHTS OF THE COMMITTEE ON THE JUDICIARY, Washington, D.C. The subcommittee met, pursuant to call, at 10:10 a.m., in room 3302, New Senate Office Building, Senator Quentin Burdick (presiding).

Present: Senators Burdick and Fong.

Also present: Thomas C. Brennan, chief counsel; Edd N. Williams, Jr., assistant counsel; Stephen G. Haaser, chief clerk, Subcommittee on Patents, Trademarks, and Copyrights; George S. Green, professional staff member, full committee; and Horace L. Flurry, representing Senator Philip A. Hart.

Senator BURDICK. We have some witnesses today to be introduced by our colleague, Senator Lausche, of Ohio.

STATEMENT OF HON. FRANK J. LAUSCHE, A U.S. SENATOR FROM THE STATE OF OHIO

Senator LAUSCHE. Mr. Chairman, members of the committee, in Ohio we have a reasonably substantial part of our economy that is engaged in the business of providing music for various types of business. Today I am here to present to this committee Mr. Nicholas Allen, representing the Music Operators of America.

It is my understanding that he contemplates discussing especially the provisions of section 116, which, under the language adopted by the House lifts completely the exemptions that have thus far been provided for music operators and substitutes therefor a royalty program which the music operators believe is unworkable.

I am not familiar with the merits of this dispute and, therefore, cannot speak upon them. But it is my understanding that the music operators take the position that if Congress determines that there should be a royalty, the music operators are prepared to pay it on a fair and workable basis.

It is the opinion of the operators that the provisions that are now in the House are not workable and are not fair.

Now, I present to you Mr. Nicholas Allen, representing the Music Operators of America, and I will ask him to present the members of the association that he has with him.

79-397-67-pt. 1-16

I come here especially at the request of Maynard C. Hopkins of Galion, Ohio, and Mr. William E. Hullinger of Delphos, Ohio, both members of the board of directors of this association.

Mr. Allen.

STATEMENTS OF NICHOLAS E. ALLEN, COUNSEL; JAMES F. TOLISANO, ST. PETERSBURG, FLA.; WILLIAM B. CANNON, HADDONFIELD, N.J.; TED NICHOLS, FREMONT, NEBR.; MRS. LEOMA BALLARD, BELLE, W. VA.; AND W. R. LUMPKIN, ASHLAND, VA., MUSIC OPERATORS OF AMERICA

Mr. ALLEN. Thank you, Senator Lausche and Mr. Chairman.

The witnesses today will be Mr. James F. Tolisano, to my right, from St. Petersburg, Fla.; Mr. Ted Nichols from Fremont, Nebr.; Mr. William Richard Lumpkin, from Ashland, Va., on my right.

On my left are Mr. William Cannon, Haddonfield, N.J., and Mrs. Leoma Ballard from Belle, W. Va.

Senator BURDICK. First of all, I think I will incorporate all of your statements without objection in the record, and then you can proceed in th order that you wish. If you wish to summarize, the chairman always appreciates it, but your total statements will all go in the

record.

Mr. ALLEN. Thank you, Mr. Chairman.

I believe our people have fairly short statements and they would like to stay with them.

First, I would like to call on Mr. James Tolisano, president of the national organization, Music Operators of America, Inc.

STATEMENT OF JAMES F. TOLISANO, NATIONAL PRESIDENT, MUSIC OPERATORS OF AMERICA

Mr. TOLISANO. My name is James F. Tolisano, I reside at St. Petersburg, Fla. I have been a member of Music Operators of America for 17 years, I have been a director of the organization for most of those years, and I have held offices of vice president, secretary, and treasurer, and am presently national president. I am also treasurer of the Florida Amusement & Music Association. For 8 years prior to moving to Florida, I was president of Music Operators of Connecticut.

I have been engaged in the coin-operated phonograph business for 33 years, and I am owner of West Coa Music Co. in Clearwater, Fla. My company operates approximately 175 coin-operated amusement machines, including 50 phonographs, within a 50-mile radius of Clear

water.

Our equipment is located in small-type restaurants, drive-ins, youth centers, family recreation centers, and taverns. This includes the city of St. Petersburg and other cities and small towns in Pinellas County.

I would like to emphasize that I am a "working" operator, by which I mean I personally go out on my routes and do some of the actual servicing and maintenance of my equipment, and have close relationships with my location owners. In this way I have direct knowledge of this business on a personal, State, and local, as well as national basis.

In the State of Florida, there are approximately 225 music operators, of whom 100 are members of the State organization. The estimated average gross per phonograph to the music operator in the State of Florida is $8.35 per week which is somewhat below the national

average.

For the country as a whole, the House Judiciary Committee report on the companion bill, H.R. 2512, 90th Congress, Report No. 83, states at page 82, the approximate average gross per phonograph per week to be $18.50. This amounts to $9.25 to the operator, as stated by my predecessor, Clinton S. Pierce, in his testimony before the House committee at the hearings on H.R. 4347 in June 1965. There may be some some small improvement in this national average gross figure since that time, but this, in my opinion, would be offset by increased costs of operation without any appreciable increase in profit.

There has been little change in the industry statistics set forth in the House Committee Report No. 83, at pages 82 and 83. That is to say, there are approximately 450,000 to 500,000 jukeboxes in the United States, and between 7,000 and 9,000 operators. The average operator pays his location owner a commission which is usually 50 percent of gross, or adjusted gross, receipts.

Jukebox record purchases average about 115 records or 230 selections per year per machine, and the industry's total purchases of records amount to approximately 54 million records per year.

The process of "diversification" by which music operators generally have broadened their operations to include other coin-operated amusement and vending machines, has continued, and these other machines now constitute the major part of most operators' equipment and operations. This diversification process has contributed to some noticeable improvement in the past year or two in the overall economic outlook for our industry.

Frankly, I believe that our industry, with its diversified operations, is on the upswing. I believe that, locally and nationally, our members are becoming better business men and women, because of improved business practices and business knowledge gained in part through trade association efforts. Whereas our industry appeared to be declining in both locations and phonographs for a period of about 10 years from 1955 to 1965, the trend now seems to have been halted at least in some parts of the country and an improved trend seems to be in effect in those areas.

New family recreation centers, youth centers, and locations of similar types are springing up in such areas due to the tremendous demand for recreational facilities. There are still as many areas, however, where locations are being lost due to population shifts, urban redevelopment programs, and other regional and local factors.

Everywhere, operators are being caught between fixed prices per play and increased costs of operation due to inflationary pressures, so that their net returns, viewed on a nationwide basis, remain about the same as they have been for a number of years.

While the future outlook for our industry appears good to me, I know that we have a long way to go to achieve the uniformly healthy, stable, industry which is our nationwide goal. I am very apprehensive, therefore, of any adverse national legislation that might set us back