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and with the copyright laws even of other advanced nations. This inaction has denied America's performing artists the right to participate in the huge revenues derived by broadcasters, jukebox owners, and background music corporations in the sale and resale of sound-recorded performances.
In addition, it has prevented America's performing artists and supportive personnel from sharing in the vast revenues being realized by the manufacturers and sellers of devices designed in large measure to copy their performances. Most of these manufacturers and sales people would not even be in business if it were not for the popularity and the attractiveness of the artists' work.
If legislation were enacted to return an equitable portion of these revenues to the performers and the arts, entertainment, and media industry that employs them, it would assure young artists and performers and the arts in America the opportunity to flourish.
Now, technology has made possible another way to exploit our creative community. The video tape, coupled with the VCR, makes it possible to rent and rerent time and again, performances which otherwise would be bought and provide an income to the performers and copyright holders that made them possible. Nearly all of the people who contribute their skills and talents to the making of American films and TV products belong to one or more of the unions affiliated with our department. These people are not rich; they are unique, true; their talents are special; they do not live in every congressional district; they cannot flood your committee with letters and phone calls from every community across the Nation; they are largely centralized in the areas where the product is made, on the east and west coasts and they primarily protect their interests through free collective bargaining, as do other working people.
Their unions have negotiated contracts on their behalf which provide that they will share in the income derived from the exploitation of their work product on video cassettes. Each contract is highly complex and different so that generalizations are not possible. Suffice it to say, Mr. Chairman, that the additional income that copyright owners will receive through enactment of H.R. 1029 will be shared in one way or another with the artists and supporting personnel in the motion picture industry.
We are not Luddites. We are not trying to stop the rental practice through this bill. We are not even trying to limit it. The people I represent are asking that the benefits derived from renting the products they create be shared with them; that those who profit from the use of their copyrighted work return some of their profits to support and enhance the creative source; that the law make it possible for more, not fewer people, to own video cassette programs by enabling the industry to bring down the purchase price to the end consumer.
For these reasons, Mr. Chairman, I urge the speediest possible favorable action on H.R. 1029.
[The statement of Mr. Golodner follows:]
JACK GOLODNER, DIRECTOR
DEPARTMENT FOR PROFESSIONAL EMPLOYEES, AFL-CIO
SUBCOMMITTEE ON COURTS, CIVIL LIBERTIES, AND
THE ADMINISTRATION OF JUSTICE
HOUSE JUDICIARY COMMITTEE
IN SUPPORT OF THE
CONSUMER VIDEO SALES-RENTAL AMENDMENT OF 1983
APRIL 12, 1984
I am Jack Golodner, Director of the Department for Professional Employees (DPE), AFL-CIO. I am here today to state our strong support for H.R. 1029, the Consumer Video Sales-Rental Amendment of 1983.
By way of background, the DPE comprises 26 national and international AFL-CIO unions (list attached) which represent approximately 2 million individuals employed in virtually every major professional field. Among them are the performing artists - actors, musicians, singers, dancers and the craft and technical people who make up the majority of employees in the motion picture industry. But also represented in our Department are engineers, teachers, social workers, pharmacists, nurses, etc. many of who, I am sure, buy and rent the pre-recorded video cassettes which are the subject of H.R. 1029.
As I understand the first sale doctrine, it provides that a copyright owner's exclusive right to sell or otherwise distribute a copy of a copyrighted work does not extend beyond its first sale. The doctrine is a judicial construct of the late 19th century. It was developed so as to allow libraries and individuals to loan, sell, or give away books which they had bought.
As incorporated into the copyright law, the first-sale doctrine now applies to the sale of video cassettes. This is a result which was not originally intended but which distorts the play of market forces on the sale and rental of video cassettes and substantially increases their sale price in most instances.
I understand that rentals today constitute over 90 percent of all end-user transactions with regard to video cassettes, while fewer than 10 percent are sales. Yet the copyright owner/motion picture producer (hereafter the "copyright owner") is prevented from participating in the profits flowing from those rentals because of the firstsale doctrine. Since the doctrine permits any purchaser to sell, lease, rent, or otherwise distribute any video cassette as he or she sees fit, it has effectively prevented the development of a pricing system based on the realities of the market place.
Thus, copyright owners are forced to realize their profits from video cassettes exclusively through sales with a sales price established to maximize those profits. The result has been a sales price at the retail level which in most cases is estimated to be about twice as high as it would be if not for the distortions caused by the first-sale doctrine.
For the many purchasers of video cassettes
those who want to own a particular
movie, those who purchase for their video cassette libraries, those who live in remote or rural areas where video cassette rental outlets are not accessible the effect of the first-sale doctrine is obvious: substantially higher prices must be paid. Less obvious, but nonetheless important for the Subcommittee to consider, is the impetus given to video cassette piracy and home taping by these high prices.
Certainly, the enactment of H.R. 1029 would be justified solely on the basis of the effect that it would have in lowering the retail price of video cassettes. But we have additional reasons for supporting enactment of the legislation.
In recent years, the Department for Professional Employees has been engaged in a program designed to acquaint the officers and members of its affiliated unions with the predictable effects of technological changes on professional and technical workers including those who work in the arts, entertainment and media industry. I am speaking here of technological changes such as cable television, the transition to fiber optics, program retransmission via satellite, direct satellite broadcasting, compact discs, and, of course, video cassette recorders.
The more we know about these emerging technologies the better we can represent the people who will be working with them and our millions of members among the general public who will be affected by them as consumers.
Insofar as American artists and supporting technical people are concerned, recent technological changes have been a mixed blessing at best. The advent of the sound recording coupled with broadcasting, juke boxes and various wire services displaced tens
of thousands of singers and musicians from restaurants, cabarets, dance halls and radio stations. To a very limited extent this loss was offset by the new recording industry.
But relatively inexpensive yet sophisticated copying devices are now destroying the markets established by these artists and other producers of film, taped and other forms of recorded performances thus further exacerbating the uncertainty which faces those who choose careers in the performing arts and related occupations. For these people the new technologies have, over the years, come to mean greater unemployment and underemployment, declining incomes, the loss of important training grounds, fewer and less varied opportunities. Unfortunately these effects have their consequences for the consumer in the form of less variety, and diminished quality in the American made product.
Compounding this problem is the Congress which, too often, is reluctant to bring our nation's laws into tune with the changing times. This inaction has:
denied America's performing artists the right to participate in the huge revenues derived by broadcasters, juke box owners and background music corporations for the sale and resale of their sound recorded performances;
2) prevented America's performing artists and supportive personnel from
If the much needed legislation were enacted to return an equitable portion of these revenues to the performers and the arts, entertainment, and media industry, it would assure young artists and performers and the arts in America the opportunity to flourish.
Now technology has made possible another exploitation of our creative community. The video tape coupled with the VCR makes it possible to rent and re-rent time and again