large expenditure in adapting it and in securing artists to perform it, should be protected against unauthorized use of it by others. Now, I do not mean that the broadcaster wants to collect royalties from hotel or restaurant proprietors or other pensons operating receiving sets who do not profit from a direct admission fee. We believe that no one, either author, publisher, or broadcaster, should have such a right. The person listening to such receiving sets are part of the broadcaster's audience, to reach whom the advertiser pays the broadcaster. Such persons receive much more than merely a bare musical composition; they receive the benefit of large expenditures by the broadcaster in creating a satisfactory performance of the composition, and the copyright owner is not entitled to collect royalties for all this. If anyone is to have such a right, it should be the broadcaster. The broadcaster is interested in situations of a very different sort, such as the following: 1. The broadcaster broadcasts the rendition of a song by a very famous artist and A reproduces the performance on phonographic records by attaching suitable apparatus to a receiving set and sells them. 2. Or A takes the performance as received over a receiving set and sends it out to subscribers over telephone or electric power lines for a fixed monthly fee. 3. Or A opens up a theater where he charges admission and uses the performance as rendered by the receiving set to entertain the audience. This last instance is a very real possibility if television develops and if television receiving apparatus proves too cumbersome or expensive for the home. It will then go into the theater where it might conceivably replace the motion picture. I do not know whether this is going to happen or not. The other two instances are not imaginary; they have already happened. The CHAIRMAN. How would you do justice to the author or composer who sells to you, as the broadcasting medium, your broadcasting rights, and then, through the invention of television, this very thing that goes over the wire to the several local stations can be projected in the same way on a screen in the moving-picture houses all over the country? You are destroying the motion-picture industry, and you are collecting royalties and fees for yourself. Where does the author and composer come in unless he makes an agreement with you which in one payment will repay him for everything? Mr. CALDWELL. I think we ought to pay him and that he will collect his payment from us. The CHAIRMAN. Instead of going around to each subdivision? Mr. CALDWELL. Or that we should both have the right, as in the motion-picture industry now, that he can collect from the exhibitor, except in the motion-picture business he sells that right. The case of piracy of a broadcast program by the phonograph record method has gone to a high court in Germany where the broadcaster was upheld in his right to enjoin it. (See Columbia Law Review, December, 1930, p. 1104.) The use of programs over telephone lines is occurring right now in three important American cities and in several European cities. They set up a receiving set and take the program and rebroadcast it and charge the subscriber for it. The broadcaster pays for the program and these people make money out of it. In several European countries the broadcasters have been given statutory protection against these practices. I concede that the subject seems complicated, but believe that satisfactory provisions can be worked out based on the theory that the broadcaster, having obtained a right from the copyright owner, is entitled to be protected in the exercise of that right both as against the copyright owner himself and as against third parties who utilize the broadcaster's production for direct profit. The American society, which also foresees the growing importance of the subject, is doing its utmost to prevent its recognition, e. g., by clauses in its license agreements, as I have already pointed out. As long as it has the whip hand it will force broadcasters to surrender this right on paper unless there is specific statutory protection. In concuusion, I must apologize for this rather lengthy discussion of the broadcasters' position on copyright legislation. I know that I speak for the whole industry in commending this committee on the open-mindedness with which it is conducting this inquiry and its desire to understand the complicated problems which modern scientific developments have introduced into this branch of the law. The points in which broadcasters are interested may be summarized as follows: 1. A trustworthy and practicable means by which copyrighted works can be distinguished from works that are in the public domain. In the present state of our knowledge we believe that copyright notice, registration, and definite term of copyright protection are all necessary for this purpose, but we shall maintain ourselves open minded and receptive to any substitute which adequately accomplishes the same purpose. 2. Protection against penalties, particularly for innocent infringement. This means (a) That the minimum damage clause should either be made to correspond with the actual damages suffered or be eliminated. Penalties, as distinguished from damages, should be payable to the United States Government, not to private parties. (b) That the single-performance principle should be recognized, so that only the person originating the performance will be liable and no person who does not have control over what music will be played can be held. 3. Protection against abuses of power on the part of combinations of copyright owners. 4. If the author's so-called moral right is to be recognized, protection against the exercise of it against the usual incidents of broadcasting. 5. That ordinary commercial phonograph records shall not be given copyright protection as such. 6. Protection of broadcast programs from piracy. The CHAIRMAN. I want to take this opportunity, Mr. Caldwell, of thanking you on behalf of the committee for your very instructive and illuminating address. It is a very wonderful address, and I have learned a great deal therefrom. Do any gentlemen of the committee desire to ask any questions? Mr. RICH. You mentioned a fear in connection with your business, namely, that composers and authors should not have an automatic copyright, but that it should be registered with the Government as a means of recognizing their claims. Mr. CALDWELL, Yes, sir. What we want is a sure means of knowing what music is protected and what is not. To us it seems notice and registration are necessary. The CHAIRMAN. In other words, your whole objection to the automatic copyright is that any man may claim he is the author and composer of music and you know nothing about it. When it is registered you know there is something registered of which you can always take notice? Mr. CALDWELL. Yes, sir. The CHAIRMAN. Are there any other gentlemen who wish to be heard? If not, we will adjourn the meeting until to-morrow morning at 10 o'clock. (Whereupon, at 12.15 o'clock p. m., the hearing was adjourned until to-morrow, Tuesday, February 16, 1932, at 10 o'clock a. m.) GENERAL REVISION OF THE COPYRIGHT LAW TUESDAY, FEBRUARY 23, 1932 HOUSE OF REPRESENTATIVES, The committee met at 10 o'clock a. m., Hon. William I. Sirovich (chairman) presiding. The CHAIRMAN. I am going to call the meeting to order and will call upon Mr. Erwin M. Treusch, secretary of the Automatic Music Industries, Grand Rapids, Mich. STATEMENT OF ERWIN M. TREUSCH, GRAND RAPIDS, MICH., REPRESENTING THE AUTOMATIC MUSIC INDUSTRIES Mr. TREUSCH. Mr. Chairman, it is my privilege this morning to represent the Automatic Music Industries, which is an organization consisting of the manufacturers and operators of approximately 95 per cent of the automatic musical instruments of America. Before stating any matters which might be subjected to argument, I believe that it would be desirable that the committee should know the conclusions that this association has reached, so that if possible some assistance may be given in the drafting of the copyright legislation, the duty for doing which has been imposed upon this committee. The CHAIRMAN. May I interrupt you for the sake of the record? When you state that you are the secretary of the Automatic Music Industries, what are the music industries that you represent? Mr. TREUSCH. They represent the manufacturers and operators of automatic musical instruments, largely coin controlled, and consisting to a large extent of automatic phonographs, automatic player pianos, and such other musical devices as fall within the category of automatic musical instruments. For instance, one of the manufacturers that is a member of this association has in the past manufactured a combination of piano and violin which was automatic in its operation, and there have been other musical instruments, but for the present the most important of them consists of automatic phonographs and automatic pianos. Mr. GOODWIN. That includes instruments where you drop a coin in the slot? Mr. TREUSCH. Yes, sir. The CHAIRMAN. They may play without the dropping of coin? Mr. TREUSCH. Some may; some are equipped to play either way. Some of our members manufacture only coin-controlled instruments and some of them manufacture instruments which are susceptible of playing both with and without a coin. |