* * *

*

"These difficulties, as I understand, are difficulties that have existed for a number of years not only in this country but in other countries, and in other countries societies have been formed in which music composers and music publishers have associated together in an association which protects for the authors and composers who form the members of the association their respective rights of copyright, and, following upon the lines of the large and successful French society with similar objects, in 1914 this society was formed and it now comprises amongst its members a number of the leading publishers of popular music and leading composers of popular music There is no doubt it comprises a large number of persons who in every respect represent the musical world so far as it can be judged by the composition and publishing of popular music. ** One has very little sympathy when a thief complains of the organization of the police force and one would not listen with sympathy to a complaint by a burglar that the constable who arrested him was receiving larger remuneration than he ought to have or that he was going to receive a bonus for his success in detecting the crime. I am not suggesting, of course, in this case, that the defendant was in the position of a thief or burglar, but at the same time one has to remember that there are a great many persons honorable in every transaction of life who do have very loose notions as to the honesty of dealing with other persons' property in such matters as copyright I certainly think that it is satisfactory to find that this society, which, after all, in the present case is merely engaged in securing the fruits of their labors to the musical composers, has a legal object and cannot be defeated in what one cannot help feeling is a position of public interest." The Select Committee of the House of Commons, Great Britain, which investigated the performance of copyrighted musical works in 1930 reported:

* * *

"Nor do they wish to place any obstacles in the way of composers forming an association for the purposes of protecting and enforcing their performing rights. Such an association is undoubtedly a convenience and almost a necessity, both to the composers, music publisher, and the user of music who would be considerably embarrassed if he had to deal separately with each piece of music performed. In fact it may be said to be the only practicable way in which the composer can collect his fees for performing rights in any adequate manner. If such an association is to function effectively, it must obtain as nearly a supermonopoly of the monopolies conferred upon composers by the copyright acts.' In the report of Judge Parker, a commissioner appointed by the Canadian Inquiries Act, March 22, 1935, he makes the following statement (p. 7):

* * Then came the radio and the sound film, and the employment of many thousands of people in the production of music for broadcasting and the showing of films.

"With such developments it became impossible for any individual author or composer to be able to ascertain the extent to which the composition which was the subject of his copyright was being produced in one or other of the many forms of musical production which had come into existence. This made it necessary for authors and composers to have some kind of organization to protect their interests. Such an organization had been existent in France for many years, but the need for such organizations was emphasized by the new conditions which had arisen.

*

"It is a central bureau established for the convenience of the copyright owners on the one hand, and the music users on the other hand, and it was conceded by all those appearing at the inquiry that such a bureau is necessary to protect the performing rights of authors, composers, and publishers, and is a convenience to the users of music in obtaining the performing rights."

COMPOSERS NOW LOOK TO THE ROYALTIES DERIVED FROM LICENSES TO BROADCASTERS, EXHIBITORS AND HOTELS AS THEIR PRINCIPAL SOURCE OF INCOME FROM THEIR WORKS

Judge Parker of the Canadian Commission found (p. 9):

"Copyright in a musical work is divided into three separate property rights. They are, first, the right of publication in printed form; second, the right of reproduction on mechanical contrivances; and third, the right of performance. The Copyright Act of Canada sets out specifically what it meant by performing right. In a nontechnical sense, and with particular reference to music, it may be described as the exclusive right to perform a musical work in public.

"Until recent years, authors, composers, and publishers looked mainly to the first property right mentioned above in the form of sales of sheet music for their

revenue. With the popularization of records, the second property right came into prominence, and although this provided a new source of revenue to the owner of the copyright, there was a decrease in the sales of sheet music, with a consequent loss of revenue from that source. It is to be observed that these first two rights which were looked to for revenue are not performing rights.

"In the last few years the development of radio has caused a decrease in the sale of sheet music and records. The broadcasting stations have undoubtedly familiarized the public with many pieces of music, but the total result has been a reduction in revenue for the authors, composers, and publishers from the sale of sheet music and records. The societies which control the copyright, including the performing right, have looked to the fees from licenses conferring the performing right upon music users to compensate them in part for the losses suffered from the decrease of sales of sheet music and records. This consideration has been one of the factors determining the tariff of fees for performing rights."

The piano, the phonograph, victrola, and player piano have been relegated to the "horse and buggy" era. The sales of sheet music, phonograph records, and piano rolls have been reduced by 80 percent by radio competition.

THE WIDESPREAD USE OF RADIO HAS SERIOUSLY DIMINISHED THE INCOME OF AUTHORS AND COMPOSERS FROM OTHER SOURCES

Simultaneously with the growth of radio and its use of music came a diminution of income to the authors and composers.

The income from sales of sheet music and books of music graphically illustrates the decline in income since the advent of radio. The United States Government reported the following income from those sources:

1927_

1929

1931

1933.

$17, 146, 715

16, 537, 747

12, 203, 657

2, 340, 723

The income from mechanical royalties for six representative publishers in the field of popular music graphically illustrates the decline in income since the advent of radio. The publishers reported the following income from that source:

A similar loss of mechanical royalties was suffered in the field of standard music where the income of six representatives publishers from 1924-34 inclusive was as follows:

Statistics reveal the decline of the legitimate show. The Motion Picture Herald compiles statistics which show that whereas in 1920 there were 68 musical productions, in 1934 there were only 24. In 1920 there were 26 successful musical "hit shows" and in 1934 about 8. A compilation of the total number of musical productions and musical hits from the Motion Picture Herald of November 17, 1934, is as follows:

The public looks to the radio for its amusement, recreation, and entertainment. The public pays for that entertainment by way of added charge to the merchandise purchased by it and advertised through radio media.

What was spent for radio in 1935

[Compiled by Radio Today, January 1936)

5,700,000 radio sets, with tubes..

$336, 000, 000

31, 000, 000

39,000,000 tube replacements...

Electricity and batteries to operate 25,500,000 home sets..
Repairs and servicing of sets (minus replacement-tube sales) -
Broadcasting time sold..

Broadcast talent costs.

Total....

This $700,000,000 could never have been realized but for the raw material furnished to the radio industry by the world's composers. Eighty percent of broadcast periods are devoted to music. The broadcasting industry paid $2,600,000 for the year 1935 to the American Society and its affiliates, representing 44,000 composers.

On January 1, 1936, there were 28,500,000 radio sets in use in the United States. The radio audience is 80,000,000.

SALARIES PAID TO RADIO ARTISTS

The radio broadcasters have always objected to paying anything to the 44,000 song writers throughout the world whose music makes the operation of their stations commercially profitable. But there seems to be no limit to the salaries paid to those who merely perform these songs. The following 15 radio artists received more from radio than all the song writers combined (Heinl Radio Letter, Jan. 4, 1935):

In 1935, $32,000,000 was spent for talent by sponsors presenting commercial programs over broadcasting stations in the United States. Artists' bureaus of radio stations receive substantial fees for booking these features. An idea as to how the income from this source has been increasing is that in 1927 $1,000,000 was

spent for radio talent. In 1928 and 1929 $5,000,000 was spent. In the short space of 8 years the expenditures in this direction have increased 32 times.

Advertising agencies for presenting radio programs on behalf of commercial sponsors for 1934 received $9,000,000 as commissions. The agency's participation is merely booking the sponsor on the radio stations and then directing or participating in the staging of the show for the sponsor. In every instance the raw material for each program which the agency helps to bring together is the music material. For this the 45,000 authors and composers of the American Society of Composers, Authors, and Publishers, whose music was used, received $2,058,392.93.

Says Justice Owen in the report of the Australian Royal Commission (1933): "That broadcasting generally has affected the sales of sheet music and records is undoubted. It supplies attractive entertainment and variety easily and cheaply within and without the home, with the result that the public look to broadcasting for pleasure and recreation rather than to sheet music and records." The talking motion picture, the radio musical entertainment broadcast, the hotel and night-club floor shows have been the legitimate theaters' most aggressive competitor. So much so that legitimate musical attractions presented in each year on the New York stage have been reduced by 70 percent, owing to this keen competition.

Says the Motion Picture Herald (Nov. 17, 1934):

"The so-called 'legitimate' production long since gave up the ghost as a serious competitor to the motion picture, and, regardless of its progress henceforth, it is generally considered unlikely that the stage ever will be resurrected in a form that will cause the motion-picture exhibitor any concern."

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COMMERCIAL SPONSORS

PERFORMANCES

FOR

Radio stations established studios in which people were and are afforded an opportunity to see and hear the performance broadcast from a stage. These studios provide entertainment free of charge and compete with legitimate productions. In New York City, such studios are in the heart of the theatrical district and in a few instances are theaters converted for the purpose of enabling broadcasts at which the public are present. The Columbia Broadcasting System maintains three playhouses located in theaters formerly known as the Hudson Theatre, at Forty-fourth Street; Little Theatre, at Forty-fourth Street; Avon Theatre, at Forty-fifth Street.

The Mutual Broadcasting Co. utilizes as a studio the New Amsterdam Theatre, which formerly lodged the Ziegfeld Follies.

The National Broadcasting Co. has many studios located at Rockefeller Center. At N. B. C., the Palmolive Hour is a program staged as a legitimate_production with a regular cast, etc., and the audience attends free of charge. It has been estimated that 3,380,000 people attend the broadcasts of three radio stations in the New York area during the course of a year. More than 65,000 free tickets are distributed weekly to more than 80 free shows presented by radio broadcasters (see Variety, Dec. 18, 1934).

During the hot season of June, July, and August of 1935, 188,681 people attended broadcasts. This is a 52 percent increase in studio attendance as compared with the same three months of 1934, the figures then being 123,586. The attraction to these broadcasts is the fact that stellar artists, whose services are engaged by the sponsor, perform there. The sponsor distributes tickets on request, without any charge. Such artists as Rudy Vallee, Eddie Cantor, Jack Benny, Fred Allen, the Showboat Hour attract millions of people yearly.

The presentation of free entertainment by radio broadcasting companies in Broadway theaters and their own large studios has been condemned as unfair competition. In November 1934 the Legitimate Theatre Code Authority protested against this new type of free entertainment. They claimed audiences were admitted without charge and that these entertainments were attracting a large potential audience which would otherwise attend legitimate theaters and motion-picture houses. (See New York Times, Nov. 16, 1934).

Not only does this unfair form of competition affect the legitimate theater, but the menace of the free shows given by radio has affected the motion-picture exhibitors. They claim it takes away business from theaters and other places of paid amusement in giving something away for nothing. It was reported in Variety, September 25, 1935:

"Certain exhibitor leaders in recent months have come to look on large Friday, Saturday, and Sunday studio broadcasts as unfair to their business. Tickets for these programs, which are attended by 1,500 people in some instances, are supposed to be only for the sponsor and their dealer and trade friends. But when the broadcasts continue drawing this number of persons week after week for as long as 24 weeks, picture exhibitors think it's carrying the thing a little too far."

CONSTANT RADIO REPETITION SHORTENS THE LIFE OF A SONG

The constant broadcasting of a particular composition shortens its popularity and prevents the composer from securing such returns from other sources as were formerly possible. An outstanding hit is often played from 10 to 12 times a night. The life of a song is shortened by too frequent repetition. Two months is fairly close to the limit for the life of a song in the popular class today.

Radio broadcasters themselves realize the destructive effect of too constant repetition. Mr. Roy F. Durstine, representing one of the largest advertising agencies in the United States, writing in Broadcasting, January 15, 1935, listed as a suggestion to commercial broadcasters:

"Keep popular songs from committing suicide by restricting them from being played every night in the week on every station, if not on every program."

For the year 1934 over 85 songs were played over the air 10,000 times, or more, each, over stations affiliated with the National Broadcasting Co. and the Columbia Broadcasting System.

Sound motion pictures caused a reduction in the employment of musicians. According to the American Federation of Musicians, there were employed 16,000 less musicians in motion-picture theater orchestras in 1932 than in 1925.

In practically every home the radio has become the common form of entertainment. The piano and the player piano, as well as the victrola, are no longer the principal instrumentalities by which the people in the homes are entertained. The record of the sale of pianos discloses as follows:

That in 1923 the sale of pianos amounted to $104,000,000; in 1925, $93,670,000, and subsequently fell off, until in 1931 it was $12,000,000; and the latest figures available, to wit, 1933, disclose that the sales amounted to $7,000,000.

The sales of phonographs in 1925 amounted to $22,600,000, and reached a peak in 1927 of $46,000,000. In 1931 it was $4,869,000. Today no figures are available, because of the combination of phonograph and radio in one set.

In some radio stations electrical transcriptions are used as a means of providing entertainment either in the form of "spot" broadcasting, sponsored programs, or sustaining programs.

The owners of broadasting stations derive income, benefits, and advantages from several sources, directly and indirectly. The direct sources of income are (a) moneys paid to the stations by advertisers for time on the air, (b) moneys received by stations from the operation of artists, bureaus, (c) miscellaneous.

Sales of time on the air

In 1933 the income of all radio broadcasting stations for the sale of time on the air was $45,000,000; in 1934 it was $73,807,000, and it is estimated that commercial advertisers will pay radio $100,000,000 for the year 1936; in 1935, $88,000,000. (Radio Retailing, January 1936.)

Artists bureaus

In addition to the receipts from sponsored programs many broadcasting stations operate artists bureaus from which they derive substantial income.

These artists bureaus arrange for and provide talent for radio programs. In many instances the artists used in commercial programs are individuals who have been presented on sustaining programs.

The artists bureau makes a commission ranging from 10 to 25 percent for all engagements filled by its artists, which commission is paid by the artists. It likewise makes agreements with these artists under which their services are made available not only for radio programs but also for concerts, private parties, motion pictures, the legitimate stage, social functions, tours of vaudeville theaters and other types of amusement places, and in its agreements provide for commissions on each contract made on behalf of said artists. The C. B. S. concert bureau handles 124 artists, and N. B. C. 86. Among their artists are Fritz Kreisler, Kirstein Flagstad, Nelson Eddy, Nathan Milstein.