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has chosen the Latin format stations because of the

controlled number of stations and their market locations.

While the technology is still experimental, SESAC hopes that

as costs decline, the system can be made available to stations in other formats.

Finally, SESAC has entered blanket licensing agreements with numerous basic and pay cable services as that method of delivery has grown in size and popularity.

SESAC is

currently discussing alternative licensing schemes with several organizations, however, our discussions remain in early stages.

SESAC has tried to understand the business

and financial concerns of start-up organizations and to be flexible in licensing arrangements with these services.

IV. SESAC GENERAL LICENSING

SESAC's general licensing department is responsible for licensing performances of music in areas other than radio and television. Current license types include hotels, restaurants, nightclubs and taverns, colleges and universities, background music services, airlines, theme parks, sports teams and leagues, stadiums, theatres, auditoriums and concert halls and funeral homes. As with broadcast licensees, license fees for general licensees are based upon factors relevant to their businesses. For hotels

the fee is based upon live or mechanical music use, the

number of rooms and room rates.

College fees are based on

enrollment; theatre fees are based on seats; theme parks are based on paid attendance, etc.

As set forth in Section II. above, contact is normally made with individual establishments. In recent years SESAC

has had productive discussions with trade associations and groups. Those discussions have been informative and beneficial and SESAC is always willing to discuss an industry's concerns with industry leaders. SESAC is currently working with a group of convention and meeting planners with a goal of making music licensing for such events easier.

V. OPPOSITION TO H.R. 3288

SESAC opposes the adoption of H.R. 3288 which would exempt from infringement the communication of a transmission by the public reception of the transmission in commercial establishments serving food and drink.

In 1917 Justice Holmes in Herbert v. Shanley 242 U.S.

591 (1917) was right when he said:

They [the defendants' performances] are part of a
total for which the public pays, and the fact that
the price of the whole is attributed to particular
items which those present are expected to order is
not important. It is true that the music is not
the sole object, but neither is the food, which
probably could be gotten cheaper elsewhere. The
object is repast in surroundings that to people
having limited powers of conversation or disliking
the rival noise give a luxurious pleasure not to
be had from eating a silent meal. If music did
not pay, it would be given up, If it pays, it
pays out of the public's pocket. Whether it pays
or not, the purpose of employing it is profit, and
that is enough. (Emphasis added).

In a recent issue of Hospitality Management the

Contract Design columnist recognized that the value of music

Bill Lepley,

to a commercial facility has not changed. owner of Minneapolis' South West Sound noted

"I've seen restaurants lose business not because
their music was aesthetically a poor choice, but
because some how it was irritating...I was in a
restaurant once where they were playing foreground
music a bit too loud. (Foreground music has voices
in it; background music is solely instrumental.)
Customers were subconsciously coping with the
voices in the music and speaking louder than was
necessary"... He suggested that the owner switch
over to light jazz background music and almost
immediately the noise level in the room dropped.
"Sound systems aren't just sound. They combine
music and the mind. If the music is bad, a patron
will react almost subconsciously...Operators are
coming to see that sound is as influential as
taste and smell and sight."

"Sound System Design Important to Customer Experience" Hospitality Management, December 1993.

SESAC submits that the principle set forth in Justice Holmes' opinion applies today. Establishments may and do benefit from performances of copyrighted works on premises.

As the establishment receives a benefit from using copyrighted works, it is only fair that the creators and owners of the copyrighted works receive compensation. The current copyright law is a carefully thought out and crafted balancing of the interests of both the users and the owners of copyrighted works. SESAC opposes H.R. 3288 and urges the Committee not to recommend its passage.

CONCLUSION

SESAC is grateful to the Committee for this opportunity to summarize SESAC's licensing activities and to express its opposition to H.R. 3288.

Mr. HUGHES. Mr. Gould, the record will remain open for you to respond, and any of the other panelists, if you wish to submit additional testimony to respond to any testimony that will be heard either after your panel or tomorrow in the panel discussions.

Section 14 of ASCAP's amended consent decree requires it to inform any prospective licensee whether a composition is in ASCAP's repertoire. ASCAP is also required to prepare and maintain a list of all musical compositions by title, date, or copyright and author. My question is directed toward any one of the three societies, not just ASCAP. Given the tremendous capabilities of computers today, why shouldn't you provide an online service? After all, the airlines have remarkable computer programs for fare schedules, fees, and reservations. Why shouldn't you be able to do the same thing?

Mr. KOENIGSBERG. Mr. Chairman, I am Fred Koenigsberg, ASCAP's special counsel. I am grateful to you for allowing me to come up and answer the questions that you've asked.

There are a couple of points in response to the question you asked. Number one, you must realize that ASCAP's repertory-and I believe it is true of BMI and SESAC as well-expands from the instant a copyrighted work is created. That is to say, from the instant a songwriter's pen lifts from paper, that work is in the ASCAP repertory. Obviously, a list of works in the repertory can only be up to date as of the moment it is either printed, or the moment it is put into a computer data base, to take the second part of your question.

Mr. HUGHES. Well, isn't that true of airlines too? Airlines have to continually update.

Mr. KOENIGSBERG. Certainly, that's true.

Mr. HUGHES. Their schedules change, chartered, unchartered changes, fares change. They have to continually update.

Mr. KOENIGSBERG. Sir, you are absolutely right. The second part of the answer to your question is that ASCAP is looking at some sort of online access that folks who are not ASCAP members as well as ASCAP members can have to consider or to learn whether a song is or is not in the ASCAP repertory, and to get information about it-who the writers are, who the publishers are, and get information about it.

So what you are suggesting is very much in ASCAP's thinking at the moment.

I would tell you, sir, that right now what ASCAP does is it tells every user, without exception, every user that if they want to know if any particular works are in the ASCAP repertory, tell us what they are and we will very promptly get back to them and tell them whether the works are or are not ASCAP compositions and included in the ASCAP license. We do that for a great many users who make those requests to us.

Mr. HUGHES. Well, one of the complaints I hear is that you do not provide that information, and users cannot basically determine whether or not a particular composition is licensed by ASCAP or BMI.

Mr. KOENIGSBERG. Sir, all I can say from ASCAP's perspective is that is simply not the case.

Mr. HUGHES. Yes, Mr. Berenson.

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