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right law—from antipiracy to performance rights—will be given an in-depth exploration during 1975 hearings on the general revision bill.
The Senate Copyrights Subcommittee has sent word that it will go along with the milder prison terms in the House bill. This will avoid conference delays and speed action on the legislation needed to make protection of copyrighted recordings a permanent part of the federal copyright law.
The recently passed Senate antipiracy bill, like its revision bill, proposed maximum prison sentences of three and seven years (Billboard, Sept. 21).
The House Judiciary Committee vote was 30 to 2 on the Kastenmeier antipiracy bill. Rep. Robert Drinan (D., Mass.), the chief dissenter, made his customary attack on the record industry for alleged monopoly practices. He said that record companies should be given exclusive ownership for only five years, with mandatory licensing to tape duplicators after that period.
Rep. Drinan argued that the tape duplicators could serve the public by lowering prices, and providing reissues of non-hit or older recordings, also benefiting performers and music licensees. He said big record companies and their record clubs dominate the industry and "authors and performers lose."
His argument brought questions from Reps. John Conyers (D., Mich.) and John Seiberling (D., Ohio). They asked whether the House revision hearings next year would cover the public interest and any antitrust aspects involved, in the way the record industry will function under the copyright revision.
Rep. Kastenmeier assured fellow members of the Judiciary Committee that there would be in-depth hearings by his subcommittee. Justice Department will be asked for comment not only from its Criminal Division (on the record piracy question), but also from the Anti-Trust Division on any monopoly aspects.
“The public interest in copyright, beyond the owners and user groups, needs to be considered in depth" he said.
But Rep. Kastenmeier demolished much of Rep. Drinan's tape duplicator argument by pointing out that unauthorized tape duplicators who do a $300 million a year business do not make copies of out-of-press or non-hit recordings, or of “finer works” that do not become hits. The pirates siphon off the top hits while they are at the head of the popularity charts.
To Rep. Drinan's contention that performing artists "don't understand the copyright law," Rep. Kastenmeier said today's artists and their representatives are "highly sophisticated" about the law. Many form their own recording and publishing companies. "If any performers and composers felt they were disadvantaged by the law, they would have testified at House hearings in 1965 on the revision bill, and 1971 and 1974 hearings on the House antipiracy bills.”
Finally, Rep. Kastenmeier pointed out that the Constitution itself-like it or not-has deliberately assured a monopoly for copyright owners for limited periods of time, in order to provide incentive to produce further works. Wholesale pirating kills that incentive.
Rep. Kastenmeier hopes for an early vote on the antipiracy bill. He will also hold hearings on the interim Senate bills which were passed by that body, since the House cannot act on a revision bill this year.
One would extend expiring copyrights for two years, and another would establish a commission to study new technological uses of copyrighted materials. An individual Senate antipiracy bill was included, but the House will vote on its own H.R. 13364.
Rep. Kastenmeier is not personally in favor of extending the expiring copy. rights for another two years, but says he will go along with the majority, if the other members of his subcommittee feel it is beneficial.
Mr. KASTENMEIER. Thank you, Mr. Wally.
Mr. GRAMUGLIA. Thank you, Mr. Chairman. I would first like if possible to have “The Great American Rip-Off” put in as part of the record, if that is possible.
Mr. KASTENMEIER. This is a piece by Mike Terranova?
Mr. KASTENMEIER. And it is related to this question. Without objection, this will be received and made a part of the record at this point.
Mr. GRAMUGLIA. Thank you.
My name is Mike Terranova. I am a private citizen and the chief spokesman for the Independant Record and Tape Association, the national association which represents the small recording companies of America.
My Association is deeply concerned over the possible passage of the proposed House copyright revision bill. We are amazed that the House of Representatives is considering a bill that will enable the multi-billion dollar music conglomerate to reap unconscionable and immoral profits, all at the expense of the consumer and the small recording companies.
I am certain that you and your fellow congressmen are not aware of the enormous impact that these music companies have on the individual citizens of this country. Music is something mankind has needed and enjoyed since the beginning of his existence. To enable the complete control of this music to fall in the hands of these few giant conglomerates, who have, and shall continue in the future, to rape and plunder mankind of his need for music, is indeed a crime of major status.
We have prepared this pamphlet with its various proposals to help you choose an alternative to the proposed House copyright revision bill which, if passed into law will entrench and federally protect these shameless corporate giants.
PROPOSAL FOR A SOUND RECORDING
COMPULSORY LICENSING LAW
The purpose of this first proposal is to eliminate the power that is created by the control of all the major popular sound recordings by a mere handful.
We propose that in lieu of the 28-year renewable copyrights for sound recordings, said copyright should be a non-renewable 28-year copyright. This would be more consistent with the reasoning behind a renewable copyright as found in the House of Representatives report #2222, 60th Congress, 2nd Session, page 14.
During the course of the first 5-year term of this copyright, in order to assure continuing creation of new recordings, the owner of same shall have the sole and exclusive copyright. However, if, at the end of said 5-year period the owner of said copyright has sold in excess of 500,000 copies, he should be compelled to make said recording available to anyone for the purpose of licensing same. Although, if the conditions are met, the owner must make said recording available for licensing after 5 years, he may license out said recording at anytime prior thereto if he so desires. This 5-year exclusive copyright will permit a copyright owner to recoup his original investment for a promotion, etc., and realize a profit, (no recording company can validly claim it has not made a substantial profit after the sale of 500,000 copies of any one recording) and at the same time permit the small company to purchase a license for copying said recording.
Keep in mind that if 500,000 copies are not sold by the copyright owner, he would not be compelled to license same. In addition, even if he does sell 500,000 copies, he still has the exclusive right to license same for the full copyright period of 28 years. In other words, the large record companies, as well as the small record companies, would both be realizing a profit under this licensing system. Of course, the copyright owner should not be permitted to charge exhorbitant or unconscionable prices for licensing, and a reasonable range of prices could be set by the legislature. Such legislation should also provide that a certain percentage of the licensing fees be paid directly to the artists themselves. Under the current "licensing only by contract" situation, the artist usually receives no compensation when his recording is licensed out. In addition, he also receives nothing when his recording is sold for less than the normal wholesale catalog price. This situation usually occurs within two years of the original release. And, this cannot be denied by the major music conglomerates, since their contracts with recording artists so provide.
I am aware that the large recording companies argue that compulsory licensing would hurt the small recording companies, and I must concede that strict compulsory licensing would hurt the small companies. However, compulsory licensing only after sale of 500,000 copies, as proposed here, would not only protect the small record companies who rarely sell over 500,000 copies, but also increase competition by making the same popular good-selling records and tapes available to the consumer not only at different prices but from different companies.
You should also be informed that it is presently impossible for the consumer to buy certain old and out-dated recordings such as those of the big band era, Gene Autry, Roy Rogers and such, merely because these aforesaid large companies have decided that it would be economically unfeasible to distribute any additional recordings of same on a national basis. However, if licenses for these so-called "old and outdated" recordings were sold to a smaller company, it might well be economically feasible for said company to distribute such recordings to consumers in their local area profitably. In addition, they may be able to sell them at lower prices than the large companies.
Many people ask why compulsory licensing for sound recordings and not for written material? In answer, we can offer various reasons but there are three which are more compelling than the others. Firstly, the demand for a particular sound recording is created by constant bombardment on radio and television, whereas one doesn't read a book before he purchases
Secondly, the music itself is already protected by a copyright and said copyright will eventually expire, causing the work to become in the public domain, but when a small company goes out of business without licensing out any of its sound recordings, these master recordings are lost in oblivion, never to be heard again by the public. Of course, as aforesaid, the large companies are by choice depriving the public of purchasing certain old recordings such as Caruso, Roy Rogers, etc., and are in fact hoarding the master recordings of these and many other artists. If said masters are destroyed the public will never again hear these sounds. Finally, the most compelling reason is that all the major popular recordings in existence today are controlled by a mere six giant music conglomerates, and such is not the case with control of copyrighted written material. Thus, the sound recording is intrinsically different from a written novel and for the reasons aforesaid, the owners of said recordings should be compelled to license same according to any reasonable criteria such as that hereinbefore set forth.