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and the date on which the replacement occurred. Hopefully, this employee could perform all the other requirements of section 116, such as calculating the royalty due each copyright owner each quarter, preparing the quarterly and annual reports, and filing the applications for certificates. Taking on this additional employee will cost the one-man operator roughly $100 a week or $5,200 a year. It is obviously clear that the operator could only afford this additional cost by raising the prices he charges per play. It is questionable whether the market could stand an increase.
The operator's burden would be relieved somewhat if he were to pay a royalty only on the selections purchased each quarter. However, that, too, would be an additional bookkeeping burden on the jukebox operators in the Carolinas who on the average retain only a minimum of records. Aside from this, there is the significant problem as to whether or not the average operator would be able to cope with the requirements of section 116. Many jukebox operators are not really smart enough to fully understand section 116, let alone comply with it.
For example, take the seemingly simple requirement in subclause (b) (1) (a) which requires that an operator must record a statement with the Register of Copyrights every time a jukebox is placed in an establishment. Consider that requirement in the following context.
It is often necessary for an operator in North Carolina and South Carolina to change a machine from location to location throughout a quarter in order to determine the best location for that machine. An operator may move four or five of his machines as many as three or four times each quarter as a result of the opening and closing of locations in which jukeboxes are kept. Some of the locations are marginal locations where, as they go out of business, the jukebox operator must remove his machine and place it in another location, if one can be found. Otherwise, the jukebox is stored until a suitable location can
a be fouund.
Also, generally each location owner wants a new jukebox in his place every year. If the location is good, the operator has to comply in order to keep that customer. Then, in turn, the replaced machine is moved to a less desirable location, the machine in that location is moved to an even lesser desirable location and so forth. At each one of these changes of location, the operator is required to file a new application with the Register of Copyrights. This requirement appears to be an impossible burden on the operator.
In conclusion, in my opinion, section 116 would lay an overwhelming financial burden on jukebox operators in the Carolinas and throughout the country. The average operator in North and South Carolina cannot afford to hire another employee at a cost of more than $5,000 per year to do nothing but maintain inventories of selections. Section 116 is impractical not only from the financial viewpoint but also from the standpoint of complexity.
I sincerely doubt whether some jukebox operators have the ability to understand and comply with section 116. For these reasons, I suggest that substantial changes be made to section 116 to reduce the financial burden and to eliminate its complexity.
Senator BURDICK. Thank you for your statement.
The next witness will be Robert E. Nims of the National Small Business Association.
STATEMENT OF ROBERT E. NIMS, NEW ORLEANS, LA., REPRE
SENTING THE NATIONAL SMALL BUSINESS ASSOCIATION OF WASHINGTON, D.C.; ACCOMPANIED BY HERBERT LIEBENSON, LEGISLATIVE DIRECTOR, NATIONAL SMALL BUSINESS ASSOCIATION, WASHINGTON, D.C.
Mr. Nims. Mr. Chairman and gentlemen of the subcommittee, my name is Robert E. Nims. I am the owner and operator of A.M.A. Distributors, 1711 St. Charles Avenue, New Orleans, La., who distribute and operate coin-operated phonographs in Mississippi and Louisiana. I appear here both individually and as a representative of the National Small Business Association of Washington, D.C. I am accompanied by Mr. Herbert Liebenson, legislative director of the National Small Business Association. I appreciate the opportunity to appear before your committee.
I wish to submit my full statement for the record.
Mr. Nims. I appear here in opposition to section 116 of S. 597 and similar provisions in related bills that would remove the exemption for coin-operated phonographs from the copyright law.
Just a few days ago Senator Smathers, a member of the full committee and chairman of the Senate Select Committee on Small Business, indicated his concern as to what the Federal Government is doing to cushion the impact of a recession on the Nation's small businessmen.
a The U.S. News & World Report of March 6, in commenting on the impact of the new minimum wage law, said:
Changes in the federal minimum wage, just weeks after taking effect, already are having an impact on businesses across the U.S.
Workers in scattered areas are being laid off, and work hours cut back as employers try to avoid overtime pay.
Many companies say their profits are squeezed as labor costs rise. Prices on a wide variety of goods and services are going up. Every sign indicates, further, that other far-reaching effects lie ahead *
Increases in the minimum-wage rates alone tell only part of the story. Employers, in many instances, are finding that they must raise salaries up and down the line to maintain traditional pay differentials. The survey showed this
Hospitals, farms, small stores, restaurants and other retail and service establishments are hardest hit * * *.
In addition to this there were new increases that employers had to pay in social security, and additional increases are being studied now by the Ways and Means Committee of the House.
Now before you is S. 597. Sections 115 and 116 discriminate against my business.
To justify such a raid on the income of my business by third parties, with the sanction of the Federal Government, you will hear testimony from the American Society of Composers, Authors, and Publishers, and from Broadcast Music, Inc.
These two organizations no doubt will stress that the copyright law, as passed in 1909, did not anticipate the growth of coin-operated phonographs.
On the other hand I submit that:
(1) Congress did not anticipate the inventions of radio and television, and
(2) That fairness, in light of the changed conditions, the changed market, and the means of developing that market, requires a decrease, not an increase, in the compensation of the composer and publisher.
According to the previous testimony given before committees by ASCAP, it is evident that ASCAP has no real knowledge of the jukebox industry, or if it does, it has purposely tried to paint a distorted picture.
THE DEVELOPMENT OF THE MARKET
Tin Pan Alley no longer exists. The function of the publisher in 1909 was to be a good judge as to the commercial possibility of a song, publish it, then plug it through having the composition sung or played. There as an element of risk since his income would be derived from sheet music sales.
Today the publisher takes little or no risk. He publishes the song, as a matter of practice, only after a demand has been created by radio stations and through music boxes. The sales of sheet music today in great part are made to serious musicians, school and church choral groups, and bands. The publisher is, and should be, protected on those sales.
The publisher contributes little, if any, to the success of most songs played today in coin-operated phonographs. Popularity depends largely on
The recording group;
The electronic marvels, the echoes, beeps, whines, and rumblings, that are achieved by the recording studio engineer. The tipoff is that in the music business today you rarely hear, "What a great song.” The usual comment is “What is a great record.”
How can the publishers justify receiving royalties on all recordings placed in a coin-operated phonograph when in fact very little of the music played in today's jukebox will ever be published ? Should there be protection above the current law for music that is popular today and forgotten forever tomorrow?
There should be no concern that genius will be unrewarded. The present law grants statutory copyrights for 28 years and allows owners to extend the copyrights for another 28 years. For this reason, an Irving Berlin or à Cole Porter of today and tomorrow do not have the problems of the Stephen Fosters of yesterday. A wise Congress has provided protection for them. Composers, with merit, quickly become wealthy.
But for their own selfish reasons there is an effort being made now by the ASCAP's and the BMI's to sell this Congress on an analogy between the lasting creations of a Richard Rodgers and the outpouring of wailings from today's jukebox. This takes some courage. But the bootstrap they employ simply is not strong enough. Oh, well. That's show biz.
Fundamental questions for this committee are who are the real composers of the hit records being played, and what real service are publishers giving toward the popularity of these hit records for which they are receiving millions of dollars a year?
I appreciate the cooperation of the chairman in granting me permission to play a few bars of a couple of numbers. The first is from Lerner-Loewe's creation of "My Fair Lady."
(At this point a recording of a selection from “My Fair Lady” was played.)
Mr. Nims. That song is "On the Street Where You Live" and I am sure that everybody recognized it. ASCAP would like you to believe that the jukebox industry is a big market for this truly artistic composition, but the real truth is that this type of music is really not a factor in the coin-operated phonographs of today.
For comparative purposes I will play a few bars of the record that was No. 2 on the list of top hits for 1965, a record typical of today's record industry, a record that sold well over 1 million copies.
(At this point a recording of “Wooly Bully" by Sam the Sham and the Pharohs was played.) Mr. Nims. The words of "Wooly Bully" are:
Mattie told Hattie
Wooly Bully, Wooly Bully, Wooly Bully.
I think the reason this record sold so many copies is that nobody can understand the words.
I am sure you have heard enough of "Wooly Bully."
I am not presenting a distorted picture. As part of my statement I am attaching a copy of page 50 from the trade publication, Cash Box magazine, dated December 24, 1966, listing the top records of the past 4 years according to an independent annual yearend survey. Except for three or four songs and two or three revivals of former “standards” of 25 or 30 years ago, this compilation substantiates my testimony as to the manner in which the market is developed today and the function of the publisher.
For example, let us examine the top 10 hit records for 1965. They were:
"Back In My Arms Again"-The Supremes
"You Were On My Mind”- We Five I'm sure that you did not recognize the names of more than one or two.
Of the top 10 records here are the lyrics of the No. 1 song of 1965, "Back In My Arms Again,” by the Supremes:
How Can Mary tell me what to Do
So Satisfied. It must be assumed that the lover in the lyrics has a big reach if he can hold his girl in his arms and have her by his side at the same time, hip to hip.
Last year two additional “million record” sellers dumped better than $40,000 for each record into the pockets of the composers and publishers from mechanical royalties on the record only. One song was "Hanky Panky by Tommy James and Shondells. Its lyrics are:
My Baby does the Hanky-Panky
My Baby does the Hanky-Panky Then there was "Barbara Ann" by the Beach Boys. Its lyrics follow:
Baa Baa Baa
Baa Baa, Baa Barbara Ann. You will notice in the attached list of top hit records that this song was only No. 45 on the list, but sold well over a million records. Previous testimony by ASCAP would lead you to believe that a record has to be fantastic to sell a million records, but this is commonplace today. There are a great many million-record sellers.
This year's example of the creative work of art of composers and publishers, one that is high on the hit record list, is “Wild Thing" by the Troggs. Here are its lyrics:
You make my heart sing
You make everything groovey. The musical efforts that accompany the lyrics of the above songs are equally talented. House Report 83 that accompanies H.R. 2512, which is the same bill as S. 597, states that 39 percent of the sales of single records are actually sold to the jukebox industry. These records discussed above are million-record sellers. I would like to point out that a million-record seller earns through mechanical royalties alone at least $40,000 for the composers and publishers. Now using the figure of 39 percent, which the House committee reports as being sold to the jukebox industry, this means that the jukebox industry alone has contributed, on the sales of each of these hit records, at least $16,000 to $20,000 to the composers and the publisher.