On July 8, 1975 the president of CBS complained to the Senate Subcommittee on Antitrust and Monopoly that it was unfair for cable television operators to transmit CBS programing to their customers and not pay CBS. He said he was "concerned" about cable "because it operates outside the copright structure, profiting from attractions of free television but not paying for them." Mr. Taylor also told the Senate committee that 85 percent of what cable television provides its viewers is what is received at no cost from the broadcasters, and, because of this, he labeled CATV "a parastic medium." He was right. And this committee and the Congress were right in remedying the situation in 1976.

In a similar manner, the jukebox operators, background music organizations, and broadcasters are now selling recorded performances and returning little or nothing to the creators who make it all possible. One hundred percent of what is pervaded by jukeboxes and background music firms and 75 percent of radio's programing is comprised of recorded performances arranged, produced, performed, and paid for by others.

I don't believe that broadcasters are unique here. Others in the history of our country and in other societies have ripped out our timberland. They've overexploited our farmlands in the search for profits. Only recently, we've come to realize that this is very wrong, that something must be put back, that forest lands must be replanted and our farmlands cared for in a better way. Well, the same is true with our human resources. We cannot keep taking and expect to keep taking from our creative people without returning in some measure the profits reaped from that taking.

The exploiters of recorded performances, however, claim that they do offer compensation by way of free air time which supposedly promotes record sales and the popularity of the individual artist. This self-serving, unsubstantiated claim ignores the following:

(a) That the goal of the broadcaster is to increase listenership so that advertising rates and profitability can also be increased. The goal is not to promote unknown, untested artists who may or may not attract listeners. Stations play the records of artists whose type of music or individual popularity will assure listeners; hence, it can be argued that the recorded work of the artist is used to promote the station rather than vice versa.

(b) Many stations do not announce the artists; so the listener does not even know who is providing him with entertainment.

(c) Individual singers or instrumentalists who are hired to make recordings on a casual basis but who contribute a great deal to the unique sound or performance that makes one record superior to or more popular than another are never given publicity on the air. They remain, by and large, anonymous to the general public. Some of these people are with us today at this table.

(d) Indeed, providers of background music, the music we hear at this hotel, in the elevators and in the lobbies, never promote the individual artist; yet, they exploit their work.

(e) We ignore the thousands of opportunities artists have lost through displacement by the sound recording, and this must be weighed against the ephermeral claims of those who are now recording. I'd like to digress now with a personal experience. My father was a recording musician. He was fortunate enough to participate in the famous NBC Symphony as a violinist. He devoted himself to 12 years with NBC to building an orchestra which is probably the world's leading orchestra, ever, under the directorship of Toscanini. But then he was displaced by NBC because NBC didn't need him anymore. They still used his work. He made records for Hugo Winterhalter, for Kostelanitz, Percy Faith, Jackie Gleason. In his later years he listened to himself on the radio making money for others while he was unemployed. He had only social security checks when he died, but he made millions for others.

His case is a little bit different than the ordinary worker who is displaced by technology because other workers weren't asked to contribute to their own demise. He was working, as I say, via the record, but he wasn't being paid. It's little wonder that he didn't and could not encourage his children to pursue music as a career.

(f) The problems of overexposure to the individual artist. Testifying before this same subcommittee in 1975, the actor and folksinger, Theodore Bikel, pointed out that before the advent of sound recordings and broadcasting, many performers built their entire careers on the performance of certain plays or musical compositions. "Millions came to their touring performances," he said. "Today, however, such careers can be telescoped into a single recorded performance mechanically repeated time and time again and broadcast nation wide or even worldwide."

Finally, the broadcasters would have you close your eyes and ears to the future. The advent of inexpensive, easy to operate, quality taping equipment undermines whatever little validity there may be to their claim of increasing record sales. The day is rapidly approaching, gentlemen, when it will be possible for individuals to tape record music and other performances in stereo or monoral broadcasts. When this happens, who will then buy the records and help compensate our performers?

This once we plead, let Congress anticipate technology rather than respond to it only when it's too late. In our opinion, the argument that an exploiter of recorded performances also promotes the creator of the performance by the simple act of using his or her work is simplistic and irrelevant to the basic philosophy supporting our copyright laws. If it is accepted by this committee and by the Congress, the same arguments can later be used to deny performance royalties to performers. lyricists, and publishers. After all, it can be said that the broadcast of their music also promotes their fame, the sale of sheet music, and the purchase of their records.

In similar fashion, the cable TV industry argued that by strengthening and improving the broadcaster's over-the-air signals they provide the TV broadcaster with a larger audience and the justification for charging advertisers a larger fee. But the broadcasters, a few years ago, saw no merits to this argument when it was used against their interests. In light of this, how can their efforts to make this same argument against the performance and recording industry be taken seriously?

The performer's plea is for fairness from those who take their work and turn it to their own profit, for justice under our laws so that they may be treated as others who make a creative contribution to this society, and, lastly, their plea calls for equity among those who benefit from their efforts and owe a measure of support.

In a statement delivered to this committee 3 years ago, Mr. Andrew Biemiller, legislative director of the AFL-CIO, pointed out that: "The overwhelming number of performers who make possible the recorded works we enjoy and take for granted almost every day of our lives are not famous or wealthy. Quite the contrary, they pursue professions that are among the lowest paid and highly unemployed in the country." His observation has been verified by the recent economic study conducted by the Register of Copyrights pursuant to Congress request and is further substantiated by other recent studies of the performing arts in this country that have been conducted by the Department of Labor and the National Endowment for the Arts.

You have the Copyright Office's study of the economic condition of the performing arts. You don't have to rely on just that study. We also have studies by the Department of Labor and the National Endowment for the Arts all showing that the American performing artist leads a precarious, marginal economic life.

Assuming that our society, like most others in the world today, wishes to encourage these and future talents so that the cultural benefits of their work will remain available to future generations, how does it correct the situation and insure proper financial incentives for this talent?

One way, of course, is through government aid. The United States has encouraged this approach indirectly for many years through tax expenditures that benefit nonprofit cultural institutions employing performing artists. But this method proved to be insufficient to the task, and, in more recent years, we have turned to the more direct method of providing appropriated funds through such agencies as the National Endowment for the Arts, the National Endowment for the Humanities, and others. Unless additional funding sources are found, both of these methods, which reply on government's taxing authority, will have to be expanded. An additional source, of course, is the beneficiary of the artist's work, and, in most areas, this is still the major source. By buying tickets to concerts and plays and purchasing records, those who enjoy and benefit from the performers' work directly compensate them. But the juke operator, broadcaster, and background music firm which also realizes a benefit from the artist's performance does not, and this places an inequitable burden on the others.

Mr. Chairman, you have received a letter from the Consumer Federation of America, and I would like, with your permission, to read a part of that letter which touches on this matter of the inequitable burden that the consumer must bear in paying for our talent. Mr. KASTENMEIER. Please proceed. However, the letter in its entirety will be made a part of this record.

Mr. GOLODNER. Thank you, Mr. Chairman. This is a letter signed by Miss Kathleen F. O'Reilly, executive director of the Consumer Federation of America.

We believe creation of a performance right for recordings will be beneficial to the consumer. At present, the consumer finances the creation and production of recordings. Commercial users-broadcasters, jukebox operators, background

music services-realize substantial economic benefits from recordings. It is they who should pay for these benefits through a performance royalty. The present situation of imposing that burden on consumers is unfair and inequitable.

The economic reports prepared for the Copyright Office persuasively demonstrates that commercial users can afford to pay the modest royalties proposed. While the economic gain to singers, musicians, and record companies might not be great, the adoption of a performance right would be a much-needed step in the right direction.

At present, almost the entire cost for developing, producing, and distributing recorded programs, as well as paying the artists, is borne by the millions of individuals who buy records for their personal enjoyment. Relative to the profit they realize on the use of these same records, the broadcast industry and other commercial users return very little to the creative sources. The pressures of inflation rest wholly on the pocketbook of the individual consumer while those who profitably exploit the record enjoy a free ride.

The effect of this inequity among those who bear the costs for maintaining our performing arts is also felt by government at all levels. In a submission to the Register of Copyrights during her study of this issue last year, Mr. Stephen Sell, the chairman of the National Assembly of State Arts Agencies and director of the Minnesota State Arts Board, noted that, and I quote:

Agencies like mine throughout the country are asked to provide publicly appropriated funds to assist artists to carry out their creative work. At least part of the need for this type of assistance is directly a result of the inability of artists to support themselves from the marketing of their creative talents *** Performing artists are frequently unable to earn sufficient incomes from their creative work to avoid calling upon various forms of government financial assistance. Commercial entrepreneurs and broadcasters are presently able to use the work of these artists without compensating them for it. While the change in the current system being suggested here may not relieve the government of all its financial responsibilities for performing artists, some improvement in performing artists' income potentials would definitely have an impact. As such, a royalty for performers in recordings would definitely serve a public purpose.

As I have indicated at the beginning of my statement, our Department and the AFICIO are concerned that with regard to the sound recording, our nation's copyright laws are flawed to the extent that they are overly solicitous of those who use the recorded performances. As new technological developments make it possible for sound recordings to be more easily transmitted and duplicated, the harm inflicted upon the creative core because of the parasitic position enjoyed by those who profit from its efforts will become even more severe. The broadcasters, the jukebox operator, and the background music suppliers have helped make it possible for many Americans to hear and enjoy the work of America's performing artists, but, because of our laws, they are not required to assume any obligations whatever for assisting or supporting the creative processes.

But condoning this situation, our laws are out of step with much of the world which does recognize the creativity of the performer and record producer and the need to provide them with appropriate remuneration from the uses made of their recordings. I believe the Copyright Office study indicates about 50 countries in the world now recognize a performance right in sound recording. Because we do not, and this is another aspect of the unfairness of the situation, our performers are not receiving any benefits from the play of these records overseas: whereas, European and other musicians are.

Indeed, in recent years, a growing number of individuals and groups within our own country have seen how wrong the present situation is and have called for a change. In addition to the AFL-CIO and all of the major artists unions, the following are some of the organizations and agencies that have publicly endorsed the principles of Representative Danielson's proposal: The National Endowment for the Arts; the Democratic party in its platform of 1976; the Republican party in its platform of 1976; the Consumer Federation of America; the American Council for the Arts; the American Symphony Orchestra League; the Committee on Arts and Humanities of the National Commission on the Observance of Women's Year; the Muzak Corp. which, incidentally, does not exploit sound recordings because they make their own recordings; the Committee on Patents, Trademarks and Copyrights of the Chicago Bar Association; the section on patents, trademark and copyright law of the American Bar Association.

It appears, gentlemen, that the only groups now favoring the status quo are those who have a direct interest in profiting from it.

Twelve years ago, this committee, through acknowledging the valuable contribution of performers and record producers and asserting the copyrightability of the sound recording, hesitated to recommend rights of public performance until the issue had been further clarified and a future Congress could give it "full consideration." Since then, this matter has been debated fully before this committee and its counterpart in the Senate, as well as in other forums.

The exhaustive report of the Copyright Office represents a definitive exposition of the major arguments that have been made over the years and the legal, economic, and social questions raised by this issue. The AFL-CIO believes the Register's conclusions fairly represent the weight of opinion on this matter, and we urge you to adopt them now as your own. Thank you very much.

Mr. KASTENMETER. Thank you, Mr. Golodner. One of the few paragraphs you didn't read from your prepared text related to quoting Theodore Bikel in his testimony before the subcommittee in 1975. I note that that former witness and friend and well-known actor and folksinger is here today, and I would like to take note of the fact that Theodore Bikel is present. I'm very happy to see him again.

Before we proceed to the other two witnesses-and I think we would ask the other two witnesses to proceed, and then we will open up the questioning to everybody-I would like to call on my colleague who really should be the host here since the southern Californian on the committee contributed so much, really, to the enactment of the copyright revision bill and whose proposal it is that we are today considering. I'd like to call on our friend, George Danielson.

Mr. DANIELSON. Thank you. Mr. Chairman. I welcome everyone. I'm glad you're here. I know you're not here to hear any words of wisdom that I may contribute; so this will be one of the shortest speeches on record, except I want to note that until the last witness, I didn't realize that the performers lived in Appalachia. I don't intend that they should live in Appalachia, but equity and justice, in my opinion, is the basis on which relief should be granted if relief is to be granted. I've never believed that people should contribute their property or their services to another without fair compensation. It just simply amounts to un