Atlantis, Lalena, Happiness Runs, A Poem by Yeats, Hey Gyp, To Try for the Bob Dylan "Great White Wonder" (Two Discs) Candy Man, Ramblin' Around, Bob Dylan "GWW While the Establishment Burns" (One Disc) Ramblin' Down Led Zeppelin "Led Zeppelin Live on Blueberry Hill" (Two Discs) Immigrant OTHER BOOTLEG ALBUMS OFFERED THROUGH OUR ORGANIZATION Bob Dylan "GWW-Royal Albert Hall 1966" (One Disc) Tell Me Mama, I Don't Jimi Hendrix "Hendrix Alive" (Two Discs) (Recorded at the Los Angeles Forum) Star Spangled Banner, Purple Haze, Voodoo Child, Spanish Castle, Foxy Lady, Gettin Your Brothers Shoes Together, Gennin' My Heart Back Together, Room Full of Mirrors, Messages to Love, Easy Rider, Machine Gun. Crosby, Stills, Nash, and Young "Ohio Wooden Nickel" (One Disc) Ohio, Guinivere, Birds, 4 & 20, You Don't Have to Cry, Suite to Judy Blue Eyes, Find the Cost of Freedom, Listen Once Again to my Bluebird, Sea of Madness, Down by the River. Elton John "Country Comfort" (One Disc) Your Song, Take Me to the Pilot, Country Comfort, Sixty Years On, Border Song, Honky Tonk Woman, Burn Down the Mission, Give Peace a Chance, Finis. Paul Simon "The Paul Simon Solo Album" (One Disc) Kathy's Song, He was my Brother, Flowers Never Bend With the Rainfall, The Side of a Hill, A Simple Desultory Philippic, Patterns, A Most Peculiar Man, I Am A Rock, A Church is Burning, April Come She Will, Leaves That are Green, The Sounds of Silence. The Beatles "Last Live Show" (One Disc) I'm Down, Interview, Introducing Group, Can't Buy Me Love, Baby's in Black, Hard Days Night, Help, I'm Down. The Beatles "The Beatles Complete Christmas Collection" (One Disc) From 1963, 1964, 1965, 1966, 1967, 1968, 1969. This is a complete collection and is a rare item. The Beatles "Renaissance Minstrels Vol. 1" (One Disc) From Me to You, Twist Mr. GROSSMAN. Counterfeiting as such is not presently the major problem because those currently involved in tape pirating generally do not attempt to pass off the pirated versions as originals, but instead sell the tapes under their own labels, using legitimate tapes as the basis for the recording of the pirated versions. Mr. Gortikov, who has just presented the views of the Recording Industry Association of America on this matter, has indicated the dimensions of the problem, which, in our view, has reached epidemic proportions. The attached excerpt from the May 15, 1971 issue of "Business Week", marked exhibit B, I believe you will find particularly informative in this regard. Mr. Chairman, I would like exhibit B be made a part of the record. Mr. KASTENMEIER. Without objection, so ordered. (Exhibit B follows:) [From Business Week, May 15, 1971] EXHIBIT B MARKETING THE $100-MILLION MARKET IN BOOTLEG TAPES RECORD COMPANIES GO TO COURT IN AN ATTEMPT TO END THE FAST SALES OF COUNTERFEITED HITS If an enterprising businessman Xeroxed thousands of copies of a best-selling book-say, The Sensuous Man or Love Story-or ran off duplicates on a basement press and then sold them at half the publisher's regular price, he would be in big trouble. His violation of copyright laws could cost him any profits he made, plus a sizable fine, and he might spend a year in jail. But all over the country counterfeiters are busy selling exact copies of stereophonic music tapes originally produced by Columbia, RCA, Capitol, and other record companies. They are doing it almost openly and are making more than $100-million a year at it, according to conservative estimates. Not surprisingly, the music industry is up in arms about the bootleggers. In the past few weeks, lawsuits were leveled at four oil companies-Texaco, Skelly, Derby, and Champlain-whose service stations in Wichita, Kan., were caught selling tapes. Federal marshals raided a gigantic operation in an industrial park in Phoenix and confiscated 30 tons of duplicating and packaging equipment, end ing employment for 100 people who were turning out 80,000 tapes a week. Three Phoenix radio stations advertising the tapes were hit with suits. And Ampex Corp. sued nine Los Angeles retailers for losses allegedly suffered from the stores' sales of bootleg tapes. Few controls. Donald V. Hall, vice-president of Ampex Music, which markets about one-third of the $350-million worth of stereo 8-track tapes sold annually through legitimate channels, thinks the bootleg operations eventually will cripple the industry. Last year, he explains, record companies sold about $1.8-billion worth of discs and tapes, but most of the profits came from a relatively small number of hit albums The Beatles, The Partridge Family, Simon and Garfunkel, a big Broadway musical or movie score. To get one hit, a company may have hundreds of albums that die in the stores. "Then the bootleggers rush in to copy the hits, creaming profits right off the top," says Hall. "They cut into your sales, have no development expense, and pay no royalties to anyone. It is a very profitable business." The Phoenix plant, which called itself National Mfg. Co., was said to have netted more than $2million in five months of operation. What makes it possible for the bootleggers to operate-and frustrating for the record companies-is the lack of regulation against copying "mechanical reproductions" of live performances. Only California and New York have criminal laws against the practice and classify it as a misdemeanor. And even these laws are new. Elsewhere, civil actions for damages and injunctions can be filed, but the bootleggers have become adept at shutting up shop and reopening later under a new name. Operation. Becoming a tape pirate is relatively simple. Small record stores "mom and pop" retailers can purchase an inexpensive duplicating machine for $200 or so. Blank tape cartridges are available for as little as 75¢ each in quantities of a few hundred. "A guy can hire school kids at $1.25 an hour to knock out copies in the back of the store," says Alan Bayley, president of GRT Corp., which makes tape albums for 67 different record companies. "He sells them at $3 or $4 each to customers. GRT, on the other hand, sells its tapes for $3.50 each to a distributor, who resells them for $4.25 to retailers, who charge the public $6.95 each. "A store can order half-a-dozen tapes of a hit album from us and use them to duplicate a hundred copies." Bayley says, "and then try to return the originals for credit because they didn't sell." The "mom and pop" thieves are a minor annoyance. More worrisome are the large, well-financed tape pirates who merchandise and promote their wares with skill and aplomb and are sometimes backed by organized crime. In addition to turning out hundreds of thousands of tapes in small factories, many bootleggers install display racks in stores, service stations, and other outlets and contract to keep them filled. They also print catalogues and send salesmen on the road. In Cleveland, John Cohen, who runs a chain of 20 Disc Records stores, received a catalogue and sample tapes from a Houston outfit calling itself Music City Distributing. Inc. The company offered copies of top-selling albums at $2.75 each and signed its sales letter: "Your friendly bootlegger." Cohen turned down the offer, but he knows that other retailers are more susceptible. "There's no question that we're losing business to a lot of little tape outlets springing up all over," he says. Albert Berman, managing director of Harry Fox Agency, Inc., which collects royalties for several thousand music publishers, agrees. "Most of these people operate with the full knowledge that they are selling an illegal product," he says, "but the ignorance and naivete of some of the merchants is surprising. How can they claim they can't recognize a bootleg record or tape when they are offered it at a ridiculously low price, are forced to pay cash, usually receive a product of inferior quality, and deal with someone who has no listed phone number, no business address, and in some cases no personal contact with the retailer?" WITH AN INVESTMENT OF ABOUT $20,000, YOU'RE IN TAPE BOOTLEGGING IN A BIG WAY Two defendants in the Phoenix case sold tapes from a truck at weekend sales held in shopping center parking lots, and kept moving, Berman says. 65-358-71 Sideline. In New York, an employee of a large industrial company has been passing out mineographed order blanks to fellow employees and supplying them with tapes of Perry Como, Elvis Presley, and 50 other artists at $3.25 each. "I pick up the orders every Saturday from a 'wholesaler,'" he explains. "The tapes cost me $2 each, and I sold 150 last week." Asked about the quality of the recordings, he insists that it is excellent. "We sell on a money-back guarantee, and these are the real thing-not bootleg tapes." What he means is that his tapes are professionally copied from commercial originals, not from live performances. Opera and concert buffs frequently smuggle tiny recorders into theaters and music halls to tape live performances, and poor-fidelity copies sometimes show up under the counter at select retail outlets. Similarly, imperfect rehearsal recordings-ones that an artist ordinarily does not want released for sale may be stolen, duplicated, and made quietly available. Alan Rich, music critic for New York magazine, recently devoted a page to praising the industrious people who do such work. He pointed out that he was able to buy a tape of a littleknown Off-Broadway musical only because of a pirate. "Hah," says Berman, “I'd like to hear him if he found his columns were being reprinted in other magazines. What about the publishers, writers, and performers who get nothing for their efforts?" The Fox Agency estimates that publishers alone are losing upwards of $10-million a year in royalties due to them from bootleg tapes. Ordinarily, a publisher gets 2¢ for each song included in each album. Hard to beat.-The Fox Agency and the National Assn. of Record Manufacturers have been leading the fight on the pirates, but Berman says the task is difficult. "We can spend $5,000 to bring a civil suit, put a guy out of business with a $250 fine, and have him reopen a few days later somewhere else." Ampex Music's Hall notes that mobility is easy because tape duplicating equipment is smaller and less expensive than a 15-ton press needed to make counterfeit phonograph records. "With an investment of $20,000 to $50,000, you're in tape bootlegging in a big way," he says. WE NEED AN INDUSTRYWIDE TRADEMARK THAT WOULD IDENTIFY LEGITIMATE PRODUCTS Ampex Music, in addition to selling tape versions of the record albums of some 40 different manufacturers, is a major supplier of blank tape cartridges and recording equipment. It recently announced that it would not sell to suspected bootleggers. "If their letterhead has a skull and crossbones on it, it's no deal," says an Ampex Music executive, who admits that it is not easy to find out why customers want equipment. Ralph Gleason, the jazz and rock-music critic and an executive of Fantasy Records, notes that the company has lost money because of bootleg sales of copies of its hit albums by Creedence Clearwater Revival. One bootlegger even improved on the originals by pulling the best songs from several albums and putting them on one tape, The Best of Creedence. "You can cut off supplying the regular record stores that also sell bootlegs," says Gleason, "but it's hard to get at all the service stations and places selling tapes along with stoplights and rearview mirrors." Mass attack.-GRT's Bayley thinks the legitimate music industry has to move in several directions to halt the pirates. A massive advertising campaign should be undertaken to let the public know that bootleg tapes not only deprive artists and publishers of their just deserts, he says, but the tapes often are of inferior quality. "We need an industrywide trademark to identify legitimate products," he adds, pointing out that authentic tapes are nicely packaged with full-color illustrations whereas bootleg tapes generally have a plain printed label listing the performers and songs and no maker's name or address. There is some talk in the industry of technological developments that would make it impossible for a tape to be copied. One possibility is a high-frequency tone inaudible to the ear but destructive to a copying recorder. But real relief has to come from Congress. A revised copyright law has been proposed by Senator John McClellan (DArk.) that would extend protection to recordings. The bill has gone through the Senate and is scheduled for hearings in the House, where lawyers for big bootleg operations are prepared to testify that they provide a public benefit by selling low-cost tapes. "If the McClellan bill fails," says Berman, "the manufacturers in this industry will have to come to one conclusion: They have partners. We're really fighting a last-ditch effort right now." Mr. GROSSMAN. To put it simply, legitimate wholesalers and retailers cannot compete with pirated merchandise. Illegally duplicated material is being supplied to retailers at a price sometimes as low as $2, which is about half the cost to the wholesaler of the legitimate product. The reasons for this are clear-minimal investment by the pirate as against significant costs to the legitimate manufacturing company which pays the performers, musicians' expenses, costs of promotion and the like. As a result, pirated merchandise can be sold, as, for example, in the case of a single tape cartridge, at retail for two or more dollars less than the legitimate retailer must obtain for his merchandise. Moreover, the illegal duplicator reproduces only the hit recordings so that he severely injures the sales of those products which must make up for the substantial investments made by the legitimate record companies in records which prove unsuccessful. Furthermore, the unauthorized duplicator frequently illegally duplicates the best selections from a number of legitimate recordings, puts them on one tape cartridge and in that way produces a tape which is not available anywhere else and with which no legitimate retailer can compete. Discussions with members of our association around the country indicate very clearly that their loss of tape business is of major proportions. In a period of greatly increased consumer interest in tape products, increased use of tape equipment in automobiles, and the introduction of cassettes, it would be expected that sales of tape recordings would be steadily and rapidly increasing. Instead, we find that the sales of our distributors are off by approximately 30 percent. Many retailers are even harder hit. Exhibit C, which is a copy of an excerpt from "Billboard" magazine of April 24, 1971, relates an interview with a Schenectady, N.Y., dealer in which he sets his loss of volume during the past year at 50 percent. These figures may sound as though the distributor is still in a profit situation, but I can assure you that the rate of attrition is so significant that, if it continues, our members will be unable to continue in the tape business, except perhaps to provide tape recordings as a convenience for their regular customers. Mr. Chairman, I would like to submit exhibit C and have it made as a part of the record at this point. Exhibit C is dated April 24, 1971, and it is titled "Dealer's View of Bootlegging: 50 percent Volume Loss; Seeks Law," and it is an article by Robert Sobel. Mr. KASTENMEIER. Without objection, so ordered. (Exhibit C follows:) EXHIBIT C [From Billboard, Apr. 24, 1971] DEALER'S VIEW OF BOOTLEGGING: 50% VOLUME LOSS; SEEKS LAW (By Robert Sobel) NEW YORK-The following interview of a legitimate record dealer, Lauren Grandy, manager of Apex Music Korner, 348 State St., Schenectady, N.Y. by a |