STATEMENT OF JOAN GANZ COONEY PRESIDENT, CHILDREN'S TELEVISION WORKSHOP The Children's Television Workshop, a non-profit organization supports the Mathias, Baker, Byrd Amendment, (#1333) to S, 1758 because it is a fair and equitable approach to balancing the needs of producers of creative materials, such as CTW, and the public's desire to use the full fruits of modern technology. The Children's Television Workshop is a producer of quality educational television programming for children. We are best known as the producers of SESAME STREET, a daily series for pre-schoolers; THE ELECTRIC COMPANY, a daily series on reading; and 3-2-1 CONTACT, a daily series on science and technology for children 8-12. For those of us who see the impact of home TV on education of children as a way to encourage growth, development of the video cassette recorder (VCR) promises to add to the effectiveness of such programming. We believe that the home video recorder represents a technology that will help expand children's viewing options, improve program choice and encourage parental involvement. So - rapidly, We also know, however, that the production of quality educational television programming for children is expensive and getting more while funds available to support production are shrinking very Because of this, the Children's Television Workshop usually invests significant funds from its own limited resources to ensure that production is of the highest quality or can be undertaken at For example, we pay nearly 70% of the costs of SESAME STREET each year -currently about $6 million in our own funds. all. - 2 We struggle to earn the funds needed to keep SESAME STREET and our other educational programs on the air through a carefully executed program of licensing, publishing and other activities based on our ownership rights of our programs. Everything we earn goes to further our educational work; as a non-profit organization we pay no dividends to stockholders. Any opportunity to earn money that we are deprived of limits our ability to keep SESAME STREET on the air. Quite frankly, as copyright owners we feel entitled to all the benefits implied by that ownership including our fair share of royalties to be derived from off-the-air recording of our programs and music. As a practical matter we will need the benefits of those royalties to help pay the ever-increasing cost of producing SESAME STREET. Such funds are of marginal importance to individual owners of VCR's and other recording equipment. Aggregated together they will be vital to our work. Amendment 1333 to S. 1758 would: (1) permit individuals to record copyrighted audiovisual programs; (2) provide a royalty fee for copyright owners whose copyrighted material is recorded by means of the home video recorder; and (3) administer this program through an existing governmental body, the Copyright Royalty Tribunal. endorse this amendment because of the beneficial effects it will have upon the quality of children's and other programming. We First, it will provide incentives and resources for increased production of such programming. It is self-evident that compensation is a necessary motivating factor in the creation of intellectual work. - 3 And pro Even the most creative genius would not long survive if she was unable to be justly rewarded for the fruits of her labors. ducers of this programming must have the resources to cover their losses for programs that are unsuccessful or for innovative and experimental work. A royalty fee for the recording and use of copyrighted material by home viewers will provide needed financial impetus for continued creative work. Second, it appears that an exemption from copyright liability for home video recording without a royalty fee would accomplish precisely what S. 1758 seeks to avoid: a limitation on television access to high-quality programming. It is possible that program producers, denied of compensation for repeated use of their property through home video recording, would make an economic decision to limit the markets in which their products are shown. In this manner, many creative works could be restricted to markets which, by their nature, prevent any recording with a home video recorder. Limiting access to programming seems to be a harsh and undesirable method for dealing with this issue. We at the Children's Television Workshop want our materials to be viewed as widely as possible. The most certain way for Congress to ensure that no impediments are placed in the way of expanding the growth of our kind of programming is to keep the principle of copyright intact in face of new technologies. The Mathias, Baker, Byrd amendment does that and we hope you will quickly act to pass this legislation. Thank you. STATEMENT REGARDING AN ALTERNATIVE SOLUTION TO THE OFF AIR WHO SHOULD RECEIVE AN OFF AIR VIDEORECORDING EXEMPTION? The purpose of this statement has to do with children and students in schools throughout the United States. If the educational welfare of our future citizens is important to you or those you represent, I urge you to strongly consider the following information. This presentation includes a proposed solution that will provide increased benefits to school children and to copyright proprietors. It may be easily applied to the development of a more simple and fair solution to the problems associated with video recording in The home. The question must be asked: Which is more important, an exemption for learning or an exemption for home entertainment? WHY SHOULD SCHOOLS BE BROUGHT INTO THE DEBATE OVER THE USE OF BETAMAX EQUIPMENT IN THE HOME? The primary early market for video recorders having the capacity to time shift the delivery of TV programs was the educational or school market. This type of equipment has been available and purchased in large quantities by schools for more than 20 years first in the open reel format and more recently in videocassette forms. The problem is not a small one. A study conducted by PBS more than 4 years ago showed 500,000 teachers and more than 11 million students involved in learning from shows recorded from the airwaves. More than 95% of schools owning TV equipment use it to tape from the air. A BRIEF BACKGROUND OF RECENT EVENTS. The most recent court decision in the debate over the Betamax Off-Air Recording controversy has held that recording of copyrighted television programs by individuals in their homes is illegal. At the same time, the Justices (Kilkenny, Canby, and East), of the U.S. Ninth Court of Appeals recognized that to enforce a law forbidding home recording, or halting the sale or production of video recording equipment would be impractical, and perhaps impossible. Some form of "continuing royalty" to repay copyright proprietors was offered by the Justices as a possible solution to the problem. Amendments to create a tax either on blank tape or equipment have been recently introduced in the United States Senate and House of Representatives. Once a "pot" of tax revenue is collected, how will the monies be fairly distributed back to those who created the original programs? Most royalty proposals require a complex government mechanism to manage and distribute the funds. At the same time, a Robert Kastenmeier committee has printed Fair Use guidelines (which do not have the force of laws), in the October 14, 1981 issue of the Congressional Record. The guidelines allow schools to record any program to use for instruction for 10 days, and to hold for faculty preview up to 45 days. THE PUBLIC SERVICE TAX CREDIT IS SUGGESTED AS A POSSIBLE SOLUTION. It provides a fair and direct method of repayment to copyright owners suggested by the court. Students in several foreigh countries have full and ongoing access to television programs on the Public Airwaves. Should our students receive similar benefits? Producers, or other owners of the copyright for each TV program broadcast on the public airwaves, would be allowed a limited amount of tax credit in exchange for school rights to copy and indefinitely retain programs for face-to-face (non-profit), instructional purposes. A prominent tax attorney has suggested that a figure of 1-10% of the production costs of a program or of the amount paid by the network for the rights to air the program, could serve as the basis of the tax credit. This credit could be specially designated as remuneration for the use of copyrighted works by school institutions. The legislature would have to determine the exact criteria for the tax credit, after hearing testimony from the affected parties. The goal would be to seek the most simple index to facilitate payment to the proprietors and open access by schools to programming of educational value. Congress would also have to determine whether to allow this credit for game shows or soap operas, where educational value would not be as significant. Of greatest impotance to copyright proprietors would be the guarantee of a fair return in exchange for non-profit educational uses of program materials. Off-air recording has been a widely accepted practice in education for more than 20 years, and no form of royalty has heretofore been provided. The tax credit would create a steady and predictable revenue flow. Once the tax credit was received by the main copyright owner, the other contributors could be reimbursed. Seemingly, the primary copyright registrant would appear to be the most qualified to fairly apportion royalties to the other contributors to the creative effort. WHY IS THE TAX CREDIT THE BEST SOLUTION TO THE OFF-AIR PROBLEM? It allows both sides of the controversy to win! Students would be allowed on-going access to educationally valuable resources. Most teachers don't use shows to teach when they are aired - programs are saved until they fit the right teaching moment. The 10 day limit under the current guidelines does not recognize this need. All shows could be retained until their educational value was exhausted with the Public Service Concept. The guidelines require erasure of valuable programs, even if the school cannot buy the show commercially. The Public Service Concept would allow access to the resources of television without regard to the financial status of a school district in which a particular student happens to live. Thus, the concept would provide for great advances in Educational Opportunity. Basic copyright theory does create protection of the right to be paid for creative efforts, but it also creates the equally compelling right of reasonable public access. A representative nationwide study could be conducted prior to final legislative action to determine if there are a significant number of students with no access to educational programs due to economic conditions. To buy one school copy of the Cosmos television series on the universe (already funded in large part with Federal funds), the cost would be $4160. How many schools can afford such an expense? - we need more data in order to fashion a fair compromise. The Public Service Concept would eliminate the need for additional government agencies to collect and administer copyright royalty monies, and subsequent distributions back to creative artists. It would eliminate the need for government agencies and/or educational production companies to police for off-air violations. What if a school inadvertantly keeps a tape for 65 days instead of 45 days? Will they be sued? Will a government agent come on the campus periodically to check the videotape library? If the Public Service Concept became part of an amendment that passed, the measure would have the full force of law. The low level of legal authority and the tentative nature of the Fair Use guidelines are problem areas within the present structure. It should also be noted that blank tapes are often used by thousands of people for purposes other than recording from the air. Should these applications be taxed? HOW CAN THE PUBLIC SERVICE CONCEPT BE APPLIED TO THE HOME TAPING PROBLEM? Seemingly the main thrust of present discussions centers on the search for a fair method of remuneration for copyright owners that also allows for widest public access to TV programs in the home setting. The Tax Credit could be used as the mechanism to pay copyright proprietors when TV shows are privately recorded. The Public Service Tax Credit presents a viable alternative to the presently proposed plans while having a similar end result. Instead of a direct tax on tape or equipment the tax credit could be allowed. The government would then decide whether to pay the entire cost, or to levy a tax to repay a portion or all of the funds lost via the tax credit. The complex mechanism using the copyright royalty tribunal could be replaced with this more simple and direct instrument (the Public Service Concept). For non-profit educational uses, the author favors the credit with no tax. CONCLUSION: The general decline in funding for education, inadequate funds for effective lobbying, and many other distractions for educators have perhaps not served students as well as possible regarding this issue. These conditions have not allowed adequate time to protest laws that classify school uses of educational materials as public performances the same as are found in Bars and Taverns. We have not been able to successfully combat a law that says a school must pay a royalty if the High School band plays "Rocky" at a half-time ceremony for a local basketball game. The concept of a "continuing royalty "is gaining momentum. If a royalty is provided, creative artists will be compensated for the recording that is destined to occur. The Doctrine of Fair Use has established that duplication of materials for comment, criticism or scholarship is a privileged use. To limit recording for educational purposes, (as in the Fair Use Guidelines) while allowing recording for home entertainment would seem to directly contradict the historic principle of Fair Use. The royalty proposal did not exist when the Guidelines were written. Perhaps it should be remembered that were it not for our system of education, many of us hearing this presentation would not be in our present positions. Our future citizens will need all the tools that we can possibly provide. It is my sincere hope that student needs will be recognized in any final actions you take. SUBMITTED BY: F. William Troost, Ph.D. Associate Professor, Los Angeles Trade-Technical College Chairman, Instructional Media Committee PREPARED STATEMENT OF JERRY MOSS MY NAME IS JERRY MOSS. I AM CHAIRMAN OF A&M RECORDS, AN INDEPENDENT RECORDING COMPANY, WITH HEADQUARTERS IN LOS ANGELES. THIS STATEMENT IS IN SUPPORT OF AMENDMENT 1333 TO SENATE BILL 1758. WE CREATED A&M 20 YEARS AGO, BACK IN 1962. MY PARTNER, HERB ALPERT, THE YEARS SINCE 1962 HAVE BEEN GOOD TO US. WE'VE WORKED WITH WE'VE ALSO DONE GOOD WORK. OUR SUCCESS IS DUE, IN NO SMALL PART, TO THE PROTECTION PROVIDED I WISH I WERE AS CONFIDENT ABOUT THE NEXT FEW YEARS. I AM NOT I AM WORRIED. I AM WORRIED BECAUSE OF THE GROWTH OF HOME TAPING. EXPLAINED. THIS IS A VERY RISKY BUSINESS. EIGHTY-FOUR PERCENT OF ALL INDUSTRY RELEASES FAIL TO RECOVER THEIR COSTS. SIX PERCENT OF CLASSICAL RECORDS MAKE IT INTO THE BLACK. |