Mr. HUGHES. Thank you very much. You really have been very helpful to us and we appreciate the work you've put into this particular initiative, and we are intent upon seeing if we can't in someway deal with the problem.

Our first panel today consists of representatives from the three performing rights societies, ASCAP, BMI, and SESAC. Morton Gould, representing ASCAP, is a well-known symphonic composer and conductor, and no stranger to this subcommittee.

He is the author of many film, television, and Broadway scores. His compositions have been performed worldwide and by almost every American orchestra. He has received numerous honors for his achievements, among them a Grammy award. In 1986 until last week, Mr. Gould was the president of ASCAP. He currently serves as president emeritus.

We appreciate your willingness to appear before us today, Morton.

Marvin L. Berenson appears on behalf of BMI. Mr. Berenson is an experienced copyright attorney who has been with BMI since 1976. He was promoted to assistant vice president, licensing, a position that no doubt gave him considerable experience with the subject of these hearings today.

He is currently senior vice president and general counsel for the company. Mr. Berenson is active in domestic and international copyright organizations, and I am sure we will benefit from his expertise today.

Vincent Candilora is the president and chief operating officer of SESAC, formerly known as the Society of European Stage Authors and Composers. Mr. Candilora has been with the society since 1969. He is an officer of the Country Music Association, is on the advisory board of the Music and Entertainment Industry Educators Association, the board of directors of the Copyright Society, and on the Jukebox Licensing Committee. Mr. Candilora has also served as adjunct professor at New York University Music Business Department where he has lectured extensively on performing rights.

Mr. Candilora, I understand that SESAC is developing some innovative ways to license music. We look forward to that testimony. We welcome you here today. We have your statements which we've all read, and without objection they will all be made a part of the record.

We hope you can summarize for us, so we can get right to questions, but we will let you decide how you want to proceed.

Morton, welcome once again.

STATEMENT OF MORTON GOULD, PRESIDENT EMERITUS, THE AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS (ASCAP), ACCOMPANIED BY FRED KOENIGSBERG, SPECIAL COUNSEL, ASCAP

Mr. GOULD. Thank you, Mr. Chairman.

My name is Morton Gould, and I am a composer. I have been a member of ASCAP since 1935. I have been a member of its board of directors since 1959. I served as ASCAP's president for the past 8 years, and am now president emeritus.

I wish to thank you on behalf of ASCAP's more than 55,000 members who are located in every State of our great country for

the opportunity to come before you today and for your tireless work and that of your colleagues on behalf of America's creators and copyright owners.

We learned with regret of your decision to retire at the conclusion of this Congress, and we think copyright will have lost a strong voice when you step down.

Mr. Chairman, I am here today representing not merely the Gershwins and the Coplands, but the thousands of ASCAP members whose names you don't know, but whose songs you sing everyday. There is a phrase that is particularly apt for these hearings. "I never met an ASCAP member who thought he was being paid too much, and I never met a music user who thought he was paying too little." ing

anticipate that the users groups, who have requested an audience at these hearings will tell you all sorts of stories about ASCAP and its sister organizations, about our so-called demands, about our alleged licensing practices and the like. I simply wish to tell you, Mr. Chairman, that in the words of a great ASCAP songwriter, "it ain't necessarily so."

I welcome the opportunity to set out the facts for you. The overriding fact which I ask that you keep in mind is that performing rights royalty, the money songwriters and music publishers earn from ASCAP's licensing of their works constitute the largest single source of their income. This is the money we use to feed our families and pay our bills and keep the music in the street an American success story. This is what enables us to devote our energies to creativity and so achieve the constitutional goal of promoting our country's progress in science and the useful arts.

I will touch upon ASCAP's licensing practices generally given the subcommittee's timetable. I refer you to my written statement for more details, and, with your permission, ASCAP will provide a written response for the record after we have heard the testimony of the next 2 days.

ASCAP is a voluntary, unincorporated membership association. Since its creation in 1914, ASCAP has served the needs of songwriters and music publishers, music users and the public at large. ASCAP's members-and those are more than 40 affiliated foreign performing rights societies-grant ASCAP the nonexclusive right to license the public performance of their vast repertory of copyrighted musical work.

ASCAP is a clearinghouse. Its licensees pay fees to obtain the blanket right to use the ASCAP repertory. The license fees ASCAP collects are distributed after deducting only operating costs to the creators and copyright owners of the works performed.

Virtually, all aspects of ASCAP's licensing activities are governed by Federal consent decree. Three provision of that decree are crucial to understanding ASCAP's licensing practices.

First, ASCAP can never say no to a user who is willing to pay a reasonable fee for a license. Simply by virtue of making a written request for a license, the user has one.

Second, ASCAP must license all similarly situated users on nondiscriminatory terms. Thus, all users in the same industry are entitled to the same form of license with the same rate schedule. We don't discriminate, and we don't make special deals.

Third and most importantly, if ASCAP and the user cannot agree on a reasonable license fee, a reasonable fee will be determined by the Federal court. The burden will be on ASCAP to prove the reasonableness of the fee it seeks. The user may continue to use our music even while we are attempting to prove the reasonableness of our proposal.

These provisions have stood the test of time, and have ensured fair treatment for users and ASCAP members alike. Wherever possible, ASCAP seeks to negotiate license terms with committees representing user industries. We find that since negotiation and cooperation pays dividends in gaining the goodwill of users.

Each ASCAP license agreement is tailored for the industry being licensed. To put it another way, the license fees and other license terms for each user industry are based on the judgment of the parties as to the value of music to that industry, and are structured to accord with the workings of the industry.

ASCAP refers to nonbroadcast and noncable licensees as "general licensees" and "general establishments," and I will use those terms here. It should come as no surprise to you that licensing general establishments is a very difficult task. Users do not exactly line up at our door for licenses.

For that reason, ASCAP understands that its first task is to undertake a significant educational effort so that the owners of general establishments understand that musical property is property which cannot and should not be used without payment of a reasonable price to the owners.

To license general establishments, ASCAP maintains a staff of field representatives all across the Nation, hundreds of men and women who find and visit establishments using music, explain the necessity for and benefits of an ASCAP license, and deal directly with the users.

ASCAP does not, as some would have you think, use gestapo tactics. And, as the composer of the music for the TV series "Holocaust,” I find such allegations personally offensive. We carefully train and instruct our field representatives in ASCAP's operation in the law and in the proper and courteous way to approach you. I would be foolish to tell you there are no problems in this regard. We are, after all, discussing interactions among thousand of human beings, but I would certainly tell you that disputes are rare, and that we are very proud of the men and women who undertake this difficult job.

Mr. Chairman, despite all my years with of involvement at ASCAP, I am still astonished when users come to Congress and ask that their use of our intellectual property should be free. They would never dream of asking Congress, for example, to force bakers to provide bread to restaurants for free. Music is no different just because our property is intangible.

The unhappy fact seems to be that when people are asked to pay reasonable fees for musical property many look to find anyway to avoid doing so. They are not the majority, but those in a minority who would like to avoid paying for this property make vocal complaints either about the principle of payment or the manner in which payment is requested.

Mr. Chairman, I again want to repeat that ASCAP is always and happy to talk with users including those who will appear before you today and tomorrow. Indeed, we have already done so with many of them, and are more than willing to do so again. I hope these hearings will be a step toward changing any misperception you may have.

And, please, I respectfully ask you to remember that when you are speaking of ASCAP, you are not speaking of some impersonal organization or bureaucracy. You are speaking of a membership organization consisting of tens of thousands of men and women governed by a board of directors of the members' choosing. They are the people who create the music that speaks to the very heart of what America is all about.

I have with me ASCAP's director of licensing, Barry Knittel and ASCAP's special counsel, Fred Koenigsberg, and asked that they be allowed to answer any questions you might have. I want to thank you for your attention, and for furnishing the opportunity to appear today.

Mr. HUGHES. Thank you, Morton. Before I recognize Mr. Berenson, let me just tell you and offer my congratulations on your being promoted to the rank of president emeritus. You've had a most distinguished career, and we have all benefited from your greatness, really.

Mr. GOULD. Well, I appreciate that, really. I thank you very much.

[The prepared statement of Mr. Gould follows:]

PREPARED STATEMENT OF MORTON GOULD, PRESIDENT EMERITUS, THE AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS (ASCAP)

Mr. Chairman, my name is Morton Gould, and I am a composer. I have been a member of the American Society of Composers, Authors and Publishers

-

ASCAP

since 1935.

I have been a member of its Board of Directors since 1959, and for the past eight years, it has been my honor to serve as ASCAP's President. Last week, I stepped down as President and am now President Emeritus of the Society.

I wish to thank you, on behalf of ASCAP's more than 55,000 members who are located in every state in our great country for the opportunity to come before you today, and for your tireless work and that of your colleagues on behalf of America's creators and copyright owners. We learned with deep regret of your decision to retire at the conclusion of this Congress, and I think it safe to say that copyright will have lost a strong voice when you step down.

Mr. Chairman, I wish to open my remarks with a phrase I heard some years ago and which I think is particularly apt given the subject matter of these oversight hearings. I never met an ASCAP member who