sponse to them, but still it put off consideration of the question until a later Congress because of the concerted opposition of the broadcasters. That was the only reason given for not taking any action. In 1975, this subcommittee considered a performance right within the context of the omnibus revision of the Copyright Act. While deferring action on performance rights at that time, the committee, Mr. Chairman, under your leadership, requested the Register of Copyrights to undertake another study and to report to Congress with appropriate recommendations. You now have that most comprehensive study and the recommendations of the Copyright Office. It concludes that establishment of a performance right for sound recordings is a mater of simple equity; that there are no persuasive arguments against it; that no legal, constitutional, or economic barriers actually exist. It is now 1978, and I am now before you on behalf of our musicians. Many years have elapsed, but the issue is the same: How long must we be denied what is rightfully ours? Why, alone, are radio stations and others who use our music without our consent, exempt from paying for the product on which they base their business? Where else in our Nation does one have to beg to be paid for the use of his work when the people who expropriate that work not only freely admit its value, but become rich by exploiting it? And make no mistake, our work is exploited: 75 percent of radio broadcast time is filled with recorded music; they pay us nothing, they don't ask our permission, and they charge advertisers up to $150 a minute for local radio commercial time. Yet they pay composers; they pay for other services for sports, features, news. Then, to add insult to injury, they say, as they have told you in the past, that a performance right would make the fat cats richer, but would not help anybody else. That simply isn't true. In 1976, recording companies paid scale wages of $28,177,538 to 25,452 musicians. This means that the average amount earned by each of those 25,452 musicians was $1,707.08 from recording session fees in 1976. These are the people who ask your help. These are the people, as Benny Goodman wrote you when a performance right was last considered, who are "the majority of artists [and] do not make a lot of many." Not too many years ago, broadcasters hired musicians and singers on a full-time basis. Stations had a staff orchestra and a small staff of singers who provided the music that was broadcast. They worked on a great variety of programs ranging from classical to popular. Now they are gone, replaced by themselves on phonograph albums and, more recently, on tape. Their recorded music fills the airwaves, without cost to broadcasters, without compensation to them or to their heirs; and, because of its profusion, most of them, or their successors, cannot find jobs after a lifetime of investing as much time and money in their training as does a lawyer or a doctor. Nor does the problem begin or end with radio. Many more thousands of musicians and vocalists formerly employed in restaurants, clubs, and other businesses were displaced by sound recordings. Now their work is used in its record form to attract customers and help make a profit for the proprietors, jukebox operators, and background music concerns. The recording companies cannot offer us relief because their work, too, is being used without payment to them through what is actually a form of legal piracy. We are not asking for a law that will, in the broadcasters' words, "make the fat cats fatter" we are asking for overdue and justified relief for musicians who, for example, after years of service with the NBC Symphony, sit home with little more than a social security check and listen to their records on radio while all they get is the commercial message, because there is no more NBC Symphony or any other staff orchestra at any radio broadcasting facility. That is a very bitter thing. It is bad enough to be displaced by technological change, but to be displaced by your own creation is intolerable. Be assured, Mr. Chairman, that the hundreds of thousands of artists for whom we speak understand and fully appreciate the enormous political pressure that has, over the years, been exerted on the Congress by those who want things to continue as they are. We feel every bit as deeply about this matter as the broadcasters, and we are confident that this committee and the Congress will decide the issue on its merits. When it does, we also are confident that you will have earned the gratitude not only of the hundreds of thousands of members for whom we speak, but also of the public who enjoys the artists' work. For, make no mistake about it, adoption of a performance royalty would also help the public because it would enable our legitimate employers, the recording companies, to defray some of the costs of a high-risk business. Presently, the entire cost of a record is borne by the consumer. Commercial users should help share that cost. The consumer is becoming tired of always having to bear the increasing costs of the arts, while those who exploit the artists' work do not share the burden. We are confident that Congress and this subcommittee will arrive at a fair determination and that justice will triumph over political pressure. Again, thank you, Mr. Chairman, and members of the subcommittee for your dedication and your interest. Mr. KASTEN MEIER. Thank you, Mr. Fuentealba for your excellent statement which, in due course, will raise some questions. Mr. Wolff, we now call on you. Mr. Sanford Wolff, the national executive secretary of the American Federation of Television and Radio Artists. Mr. WOLFF. Thank you, Mr. Chairman. I would just like to add to your recognition of the presence of Theodore Bikel here by merely saying for the panel that Mr. Bikel is the president of one of our foremost performing unions, Actors Equity. And also with us today is the president of the Screen Actors Guild, Miss Kathleen Nolan, and I would like her presence to be noted, please. Mr. KASTEN MEIER. Thank you, I noted her presence earlier. Mr. DANIELSON. Mr. Chairman, hers was the first presence I noted this morning. Mr. WOLFF. Gentlemen. I have appeared before this committee back in 1975, and we've appeared again before a panel in the Copyright Office during its hearings in Washington last year. Over the years, it seems that everybody has appeared before this committee and before the Copyright Office. It may well be that everything's been said several times, and the record is pretty complete. I am accompanied by other artists today as I was in Washington in 1975. They are not paraded before you for any purpose other than to give you panel members the opportunity not to become impressed, but at least to become informed about the working life of the background singer in the United States. Later on, I will take the time to introduce them and tell you something about them and about their work. You will recognize their works; you may not recognize any of their faces or names. We do owe and acknowledge special appreciation to Congressman Danielson for his vision and persistence. It is my firm belief, reaffimed today, that the morality of the issue has provided him the strength required to brave formidable pressures mounted by the foes of the legislation in several instances. I would also, as a lawyer, for the record, thank Miss Barbara Ringer and Miss Harriet Öler for what must be one of the most objective, brilliant, and scholarly reports that has ever been handed to a congressional subcommittee. Each time this matter is studied, each time this matter is examined on its merits, we find more friends and fewer adversaries. I have, as I have noted, been following this subject for many years, both professionally and on behalf of the union that I represent. Slowly but surely, I've noticed that there isn't anybody opposed to us that I know about except commercial users of our works. That opposition seems to become incredibly hysterical, but it's also very powerful. They've invoked free enterprise, and they've invoked phony issues of constitutionality and economics. They have, as a matter of fact, even claimed that they really do us, the background singers and instrumental musicians, a favor when they use our product. They've said that payment of performance royalties would-and I quote Vincent T. Wasilewski, president of the National Association of Broadcasters-"lead to a reduction in the quality and quantity of radio broadcast service upon which the American public relies heavily each day for news, information, and entertainment." They've complained that the Government has no right to require one industry to subsidize another. I'm sure I've heard that argument before, and I emphatically agree that the recording industry and American performing artists ought not to have to subsidize broadcasters and others by having our product pirated and sold by them. I'm quite certain that were Vince Wasilewski practicing law today he would be gravely embarrassed were he forced to make his arguments before a jury of his peers. Now that all the facts are in; now that the distinguished Register of Copyrights, Miss Barbara Ringer has completed what has to be one of the most exhaustive, painstaking, objective, and carefully documented reports I think any of us has ever had the opportunity of reviewing, there just are no new arguments to offer. The tired, old reasons given for denying us what are our rights have been stripped of credibility and found bereft of truth. What have we heard so far from people who don't want to pay our members for work they use? The only real argument the broadcasters have made is that they shouldn't pay a royalty because radio sells 36-510-78- -2 records. The truth is that record sales often suffer from overexposure and overplay on the radio. The question is asked, why should one buy a record when you can hear it for nothing, and you can be assured of hearing it for nothing over and over and over again? It is well to to note now the tremendous advance in the technology of the tape recorder alone which makes it possible not only for you to hear a record played over a radio station, but to tape it and keep it, and, if you happen to be a pirate, to sell it to others by duplicating and making copies. I don't know quite how to explain it. The fact is that there are more blank tapes by about 2 to 1 sold on today's market in the United States than there are tapes recorded with music and singing. Now, I must admit immediately that a great deal of that, not most of it, but a significant amount of it, is blank tapes sold for industrial purposes. Another point of interest, I believe, is that all background music and most broadcast music doesn't promote anybody because seldom is the talent given the credit. The anonymous singers or musicians working behind a star are never given credit, and therefore, their careers cannot possibly be said to be enhanced by the playing of those records. The argument almost results in our agreeing that Alex Haley should pay the American Broadcasting Company because it popularized "Roots." Then you ask yourselves is the network Haley's benefactor or the beneficiary of his creative efforts, and the mere asking of the question, I believe, answers it. In trying to summarize, it seems clear that the radio stations and others are not making music for the public benefit. They are not playing it to sell records for the artists' benefit. Music gets an audience for a station. It takes in money at the jukebox. An audience means a rating. A station with a good rating can charge more, and does charge more, for its commercials. A philosophical question comes to mind. Does the mortar keep the bricks apart or hold them together? The only reason the recorded music is broadcast is to separate the commercials and get an audience to listen to them, to sell commercial time. We have no quarrel with that. We believe in it. It's the American way; if you have something, you sell it. You make a profit if you can. But first you really should own what you sell before you sell it and don't just appropriate it. In harsher words, don't steal. Broadcasters have said, in making an argument against the legislation, that the cost of collecting the royalty may be large and that singers, musicians, and producers, may not get as much money as the broadcasters would like them to receive. Well, that's a risk we'll have to take, but I would like to point out that already there are operating mechanisms in place which would make possible the economical and expeditious payment to the artist concerned. Broadcasters have said-perhaps this is meant as their most telling argument that radio stations couldn't afford to pay any rovalty at all no matter how minor. Survey findings to the contrary, it would seem that they would walk a little more gingerly around this allegation. And, as a matter of fact, they never have offered any proof to the allegation. I allude to the study conducted for the National Association of Broadcasters by the consulting firm of Frazier, Gross & Clay as reported in the May 23, 1977 edition of Television/Radio Age magazine. The survey projected an 85.9 percent growth in radio sta tion profits between 1975 and 1985, going from $1.7 billion in 1975 to $3.2 billion in 1985. In December 1977, the Federal Communications Commission reported that 5,638 radio stations and 7 radio networks reporting to the FCC averaged a 97-percent increase in income before taxes. That increase in income was earned by stations which fill 75 percent of their cumulative air time with recorded music for which they paid absolutely nothing to those artists who provided the performances. I should, at this time, I believe, merely refer you to a short paragraph in the report of the Register of Copyrights, and I quote: An independent economic analysis commissioned by the Copyright Office of potential financial effects on broadcasters in an effort to provide an objective basis for evaluating the arguments and assertions of both sides of this issue. This study concludes that the payment of royalties is unlikely to cause serious disruption within the broadcasting industry. I would like to point out to this committee again, just in case it got lost in the record someplace, that the performing unions in this fieldthe musicians and the American Federation of Television and Radio Artists, and the recording companies who hire our members and take the risks and absorb the expenses of production, have reached an agreement on the division of the modest proceeds from a royalty. As you know, 50 percent will go to the recording companies, as projected. The other half will be distributed in this way, and I will do it just as simply as I can just to make certain that none misunderstand. Let's take a for instance, a situation in which a leading soloist, a singer such as Mr. Sinatra, Mr. Como, or whomever. In the instance of the production and preparation of such a recording, let us say that the star or the soloist has singing behind him 6 singers, and that in the orchestra there are 15 musicians which would make a total of 22 performing artists. In this instance, whatever the royalty might be, each of those 22 persons would realize an equal share of the performer's share of the performer's royalty. We're all aware that the fight against this legislation has been given top priority by the National Association of Broadcasters. We are, you might say, on their hit list again. It seems axiomatic, forgiving even the morality of the issue for a moment, that if any industry is going to continue to dip into the works of others for its own profit, that at some point they have to be called to account. Hopefully, you will consider this to be the point and recommend that this legislation be adopted. Those of us who are active on a daily basis in the broadcast field are still somewhat puzzled about the peculiar double standard adopted by he broadcasting industry. On the one hand, they argue that they should pay the performing artists nothing. On the other hand, as they did in 1975, the National Association of Broadcasters have said: "It is unreasonable and unfair to let the cable industry ride on our backs, as it were to take our product, resell it, and not pay us a dime." That's what the man from the National Association of Broadcasters said. He also said that it offended his sense of the way things ought to work in America. We agree. Thank you. If I've been unclear, if any of us have been, we're prepared to clarify, and we have some of the laborers in the vineyard in assistance. |