in the next 5 years. Can you give us any sort of guidelines about that? Mr. FINKELSTEIN. I think I can. I think that I would say—we in ASCAP charge $30 for the background type of use per subscriber-I would say that that would furnish a guide. Now of course that isn't that is background music. That is not the vocals. That is not where they may be dancing to it, or something.

But I would say that somewhere between $30 and $60-as, let's say, $60 as a maximum and $30 as a minimum-I would say, somewhere around there, you have your rate. I would say take their figure of $60, mentioned by Mr. Gordon. I don't think ASCAP would have to exceed that figure at all.

Mr. PoFF. Now explain for the record to whom the payment would be made and what final distribution of the total might be made.

Mr. FINKELSTEIN. Oh, I will cover that. Now the scheme in ASCAP is that the writers must get at least 50 percent. There is noyou see, ASCAP has no treasury. Everything that is received, is collected, is distributed after the actual operating costs, and those costs are under 18 percent, which I think is a very, very low figure, considering.

You know, ASCAP has 650 employees. I don't know how much it pays for these International Business Machines that just tabulate all these things, and any of the members of the committee could visit New York and see that operation, it is really something very interesting. But taking the cost of operation at 18 percent, the balance would be distributed to the writers and publishers. And at least 50 percent to the writers. The writer can get more than his 50 percent if he has an interest in the publishing business, and oftentimes, today, the writer will insist that he be a partner with his publisher in the publishing enterprise; but the publisher can't get any part of the writer's 50 percent.

Mr. POFF. I assume that the 18-percent administrative cost figure you used a moment ago would be applicable against that income as it is today against the income you have.

Mr. FINKELSTEIN. Yes; I would say that the kind of survey that is made would be one that would perhaps make it possible to keep within that limit, somewhere around there, because that's the cost.

Mr. POFF. Now let me see what you mean.

I believe you said the fee for the first 5 years would be $20 to $30. Is that a fee for all music played on the jukebox? And for all costs incidental thereto?

Mr. FINKELSTEIN. It would be a fee for all the ASCAP music. By the way, in determining whether it is $20 or $30, let's take these jukeboxes with, you know, the modern-day jukebox that plays stereophonic records and all that. That would have the highest fee. Any jukebox made more than 5 years ago would have the lowest fee, whatever that is.

Mr. POFF. What percentage would you say the music on the average jukebox is ASCAP music?

Mr. FINKELSTEIN. We haven't made any survey at all on that. I couldn't tell you. I think it would depend very largely on where the jukebox is located, you know, what the tastes of the particular patrons are.

Mr. POFF. Mr. Chairman, the bell for convening of the House has just sounded, and I anticipate we will have a quorum shortly. I am prepared to stay a little longer, if you are. I think we should make some decision about that for the convenience of the witnesses who are here.

Mr. KASTENMEIER. Well, the Chair will state that we probably will not get to Mr. Kaye before we recess. Mr. Hutchinson has questions, and you may have extra questions of this witness.

Mr. HUTCHINSON. I just have one.

Mr. KASTENMEIER. You have only one?

Mr. HUTCHINSON. I have one or two, that is all.

Mr. KASTENMEIER. If that's all, we may get to Mr. Kaye for a statement, but probably not for questioning. We will recess about 12:15 or thereabouts, and we will anticipate a quorum call shortly thereafter, and if it is agreeable to the committee, we will return at 2 when we do recess, with ample time for a break.

Mr. POFF. Mr. Chairman, if I may say for the record, I will be delayed unavoidably, because I have another meeting at 1 o'clock, but I will be here later in the afternoon, if that is acceptable, and may I say also that I am prepared to stay as long now as you, or as any other member of the committee might be, in order to accommodate the witnesses who are here.

Mr. KASTEN MEIER. If that reflects the will of the committee, we will at least, after the few questions remaining for Mr. Finkelstein, proceed with Mr. Kaye, and go as far as we can with the next witness. Mr. Hutchinson?

Mr. HUTCHINSON. Well, I simply wanted to ask this question to clear up a matter in my mind. Do I understand that what you and Mr. Poff were talking about in effect represents the total performance fee that each machine would pay for a year?

Mr. FINKELSTEIN. That is correct, Mr. Hutchinson.

Mr. HUTCHINSON. So that really, under this kind of an arrangement, it wouldn't necessary for the operator of a machine to actually keep a tabulation count of every time every performance is played.

Mr. FINKELSTEIN. If he chose to deal with ASCAP or with BMI, that's right. It would be the problem of ASCAP or BMI to make its own tabulations and its own check, because it would be too costly for most locations to keep a record of everything that is performed, though there are devices on machines that can keep those records.

It would help considerably if they did keep the record, but we would be prepared to make our own surveys, so as to keep those costs down.

Mr. HUTCHINSON. Well, are there operators of machines who wouldn't be dealing with either of these organizations?

Mr. FINKELSTEIN. Presumably. And the operator might say, "Well, I don't like ASCAP. I just don't like the color of their hair," or whatever. "I want to deal with individuals." He should have that privilege, shouldn't he?

He may even say, "I don't care. I won't put a record in my machine, if the writer or publisher are going to charge me a royalty. I just won't put that in there." He should have that privilege. Mr. HUTCHINSON. Yes.

Mr. FINKELSTEIN. Or, "I will deal with the publishers and writers directly." He should have that privilege.

Mr. HUTCHINSON. Yes; but if a man was then going to deal directly, it would be incumbent upon him under the bill as it is written to go to the expense of keeping all this tabulation.

Mr. FINKELSTEIN. Oh, surely, and every user has that problem. That is why there are performance rights societies, because in this area, the charge is so little, and the cost of keeping records would be so great, that otherwise there would be no commerce in these rights at all. Throughout the world we have performing rights societies that do the kind of job that ASCAP does to make it unnecessary for the kind of records to be kept that you speak of.

Mr. HUTCHINSON. It was suggested to me by one individual that he thought other jukebox operators would be more amenable to an increase in the mechanical fee than to a performance fee requiring all of this recordkeeping. Your testimony here this morning indicates that in effect, so far as your organization is concerned, it would be the equivalent.

Mr. FINKELSTEIN. That is where our 18 percent goes, that's right. That's our problem. We take care of that, and we can do it much more cheaply than the individual could dream of doing it, and we do it by sampling. As I say, a sampling system that is monitored by the Department of Justice and the Federal court, and it is very carefully controlled.

Mr. HUTCHINSON. Thank you. That's all I have.

Mr. KASTEN MEIER. Just to follow up on that one moment. On this area opened up by Mr. Poff and pursued by Mr. Hutchinson-I think very fruitfully so there are a number of organizations, of course. There is ASCAP, BMI, and SESAC?

Mr. FINKELSTEIN. SESAC?

Mr. KASTEN MEIER. Are there other organizations representing authors, composers, publishers?

Mr. FINKELSTEIN. I think these are the only three today. One never would know. Now the jukebox people themselves say they will start their own, which of course is their privilege. But basically, somebody who is a writer or a publisher is going to lodge his performing rights today with one of these three organizations.

Mr. KASTEN MEIER. In other words, what you are saying is that the jukebox operator of tomorrow is going to have to deal with ASCAP, BMI, SESAC, Seeburg, Wurlitzer, and Rock-Ola, all of them or individually.

Mr. FINKELSTEIN. Well, that is a possibility, but that is a whole lot less than if he dealt with each one individually.

Mr. TENZER. Will the chairman yield at this point?

Mr. KASTENMEIER. Yes, just after one other question, and I am through, and that is to say, would it be possible, rather than to make his arrangement with ASCAP alone, his $20 or $30 a year, to have a collective arrangement with BMI, SESAC, and ASCAP, so that an operator would pay one figure for literally any record he might want? Mr. FINKELSTEIN. I would say, with the blessing of the Department of Justice, that would possible. [Laughter.]

Mr. TENZER. You anticipated my question, Mr. Chairman, and the witness gave an answer, but on the opposite side of the coin, would it not be possible for these organizations to engage in competition for locations, so that one location would be an ASCAP location, the other would be a BMI location, and so on?

Mr. FINKELSTEIN. You know, Mr. Tenzer, I really doubt that, because the good jukebox operator is going to want to deliver to his customers whatever the public wants, and if the public goes into a place and they can only play something in one repertoire, they won't fre quent that place very long, or they won't drop their coins in that box, and for the small amount that they would be paying, they would take a license from everybody, I should think.

Mr. TENZER. Mr. Chairman, our distinguished colleague from Virginia raised a question before, not a question, but made a statement. He read into the record a paragraph from Mr. Finkelstein's statement. From that, I infer that perhaps the entire statement is not in the record, so I would like now to ask and make certain that Mr. Finkelstein's statement, if he desires to have it so, together with Mr. Connor's statement, and Mr. McGimsey's statement, and the Seeburg Billboard article should all be part of the record, to eliminate any possibility of something having been omitted.

I want to join with Mr. Poff, and perhaps speaking for all of my colleagues, I would like to make a fair and honest evaluation of the jukebox question, too.

Mr. POFF. I am sure you would.

Mr. KASTEN MEIER. Was that your intention?

Mr. FINKELSTEIN. I had hoped that I had made it clear that I would like to have my whole statement, and the Seeburg article, go into the record.

Thank you, Mr. Tenzer.

Mr. KASTEN MEIER. Without objection, it is so ordered.

(Statements referred to follow :)

STATEMENT OF HERMAN FINKELSTEIN IN SUPPORT OF H.R. 4347

My name is Herman Finkelstein. I reside at 440 East 56th Street in New York City. I am a member of the New York and Connecticut bars and appear here as general counsel for the American Society of Composers, Authors and Publishers (ASCAP).

The membership of ASCAP consists of 7,754 composers and authors of musical works, and 2,558 publishers scattered throughout the United States.

ASCAP was formed over a half century ago-only 6 years after enactment of the 1909 copyright law. Its founders included such outstanding American composers as Victor Herbert, John Philip Sousa, Irving Berlin, and others, and their publishers. Faced with a growing volume of uses of their works in the field of public performance, they sought a means of safeguarding their property rights against wholesale infringement. The difficulties were many users who had been in the habit of helping themselves to copyrighted works in presenting music for the entertainment of their patrons would not willingly agree to recognize the property rights of authors; the law permitted performances, even though they were public if they were not "for profit"; and it permitted performances for profit if they were not "public." The terms "public" and "for profit" had not yet been clearly defined by the courts.

The cost of enforcing the right was apt to be greater than any possible income for several years. Because of the large number of uses in a single program or in a single day or week, and the great number of writers and publishers whose works were used, it was impossible to negotiate separately for each use or to require users to keep records of all their uses. The basis of the payment had to

be a lump sum for all uses of any and all works in the repertory during a given period. Thus, the cost of keeping records and apportioning payments to copyright owners was kept to a minimum; the actual cost of keeping of records of each use would exceed the amounts collected. Some of the problems seemed insurmountable, but as the years passed, methods were found to meet them. Many problems remain as new users develop, but ASCAP tries to keep pace with developments just as its members accommodate their talents and enterprise to the period in which their works are produced.

Today, the ASCAP membership includes such outstanding composers of "classical" works as Samuel Barber, Aaron Copland, Paul Creston, Lukas Foss, Morton Gould, Ferde Grofe, Howard Hanson, Benjamin Lees, Peter Mennin, Gian-Carlo Menotti, Douglas Moore, Vincent Persichetti, Igor Stravinsky; writers whose names are known and whose songs are sung the world over: Irving Berlin, Frank Loesser, Meredith Willson, and more recently Jerry Herman ("Hello Dolly"); who write both words and music; Richard Rodgers, whose famed collaboration with Lorenz Hart and then Oscar Hammerstein preceded his own venture in both words and music; Harold Arlen and Johnny Mercer, and such writing teams as Frederick Loewe and Alan Jay Lerner, Jule Styne and Bob Merrill, Charles Strouse and Lee Adams, Carolyn Leigh and Cy Coleman, and many who write both classical works and show scores, such as Leonard Bernstein. These are some of the more successful writers. In deference to the wishes of the committee, we are not presenting any of these members as witnesses. Many of them would like to testify in support of H.R. 4347.

Many writer members of ASCAP have passed on but their songs remain as living monuments to their outstanding talents, and those they held dear to them continue to benefit from those works that have not fallen into the public domain-Cole Porter, George Gershwin, Oscar Hammerstein, Jerome Kern, Otto Harbach-and of an earlier day, Victor Herbert and John Philip Sousa.

The rolls of the society's writer membership increase by almost 500 each year. Those are the writers of the future. Their income will depend almost entirely on performances of their works by symphony orchestras, in the theater, in radio and television, and by means of the multiplying media of mass communication. In addressing this committee ASCAP speaks in the interest of all who choose as their life's work the composition or authorship or the publication of musical works.

When the 1909 copyright law was enacted, sheet music was the main source of income for writers and publishers of musical works; but with the advent of automated music and its rapid growth, demands for printed copies, and the income from that source greatly diminished. At the same time, the number of writers and publishers of musical works has increased in leaps and bounds. This is a healthy development and shows that the law of supply and demand works in music as it does in other fields.

Opportunities for reward and recognition always encourage men and women of talent to respond with works of which our Nation can be justly proud; and we believe that early enactment of the basic principles of H.R. 4347 will substantially broaden economic opportunities for American writers.

As the book writers and publishers, playwrights, and others have indicated, a general revision of the 1909 Copyright Act has long been overdue; and the Register of Copyrights and his staff have done a masterful job in a very difficult area. The writer and publisher members of ASCAP endorse the basic approach to revision which appears in H.R. 4347. We shall make some suggestions which we believe will carry out more effectively the aims and purposes of the bill and hope our approach will be regarded as one of constructive criticism. The basic approach of H.R. 4347 is in line with developments which have occurred throughout the world during the past half century:

(1) Most other countries have adopted the principle that the term of copyright should equal the life of the author and 50 years after his death. (2) Most other countries treat the performance of musical works in the same manner as the performance of dramatic works and recognize that the property rights of composers and authors of musical works extend to all public performances whether for profit or not unless public policy dictates specific exemptions.

(3) Other countries have expressly recognized the right of "transmission" which automatically covers the new form of transmission known as "community antenna."