It is a practice which creates unjust enrichment and unjust unemployment.

Not too many years ago broadcasters employed musicians and singers on a full-time basis. We called it staff. There was an orchestra and a small group of singers who provided the music that was broadcast. Those people worked in many ways and on a variety of programs. Some of us still remember, with considerable fondness, maestro Toscanini and the NBC Orchestra and the Riders of the Purple Sage. Though perhaps at the opposite ends of the musical scale, these American musicians and singers were employed to provide popular programing features for the American listening audience. Maestro Toscanini and the Riders are no longer with us, but their recorded music remains and continues, without cost to the broadcasters, without compensation to their heirs, and that music competes unfairly for jobs needed by their talented successors.

A Martian would find it incredible that we appear here with hat in hand for the passage of this legislation. Where else in these United States does one have to beg to get paid for the use of his work when the users of his work acknowledge the value of the product and grow rich on it? This is madness-it is unfounded in logic, in ethics or economics.

The performers I represent here make an obvious, ever-increasing contribution to the programing of radio and television stations. Basic American fairness requires that they be recognized and compensated. Please disabuse yourselves of the notion so widely cultivated by our opposition that the sales of records directly reflect the number of times the record is played on the air. Even accepting the arrogant premise that radio stations spend 75 percent of their air time out of eleemosy nary concern for the record industry-and in disregard of their own profits that notion is simply not true. Sales often suffer from overexposure and overplay on radio. Simply put, why buy a record when you can hear it free?

Put out of your minds too, the canard propagated by the broadcaster that artists grow rich because of record sales.

Present here today with me are men and women unknown to you. No Sinatra, Diana Ross, Elvis Presley, Johnny Cash or Fifth Dimension. No Perry Como, Kate Smith, or Johnny Mann here; but on the records made by those stars and played on radio stations throughout the land, these people present contributed their invaluable services— their performances were and are being heard.

To put the phony argument to rest, I am pleased to advise you that the two performing unions have reached a firm agreement under which all performers will share equally in the royalties.

For example, if on a Frank Sinatra there are 10 musicians and 5 background singers, the royalty provided would be split equally among the 16 people on the phonograph record.

Let me tell you something about the performers here with us today. And they, too, are prepared to answer any questions you may desire to ask of them about the record business.

Mr. David Grupp, a professional drummer who for 62 years has played for symphonies, on network television, recordings, theaters. clubs-even at weddings. Many of the thousands of records he has worked on are still being extensively broadcast, and he has never

received a penny from the radio stations who profit from his talent. Mr. Grupp.

Mr. William Ackerman, born and raised in Nashville, has been making popular, country, and rock and roll recordings since 1960. At least 100 of the more than 5,000 recordings that Bill has made have gone over the million mark in sales. He hears his product played on radio stations all over the country, but he is not paid for or consulted about the broadcast of his talents.

Ralph Mendelsohn's instrument is viola. He has been with the New York Philharmonic for 23 years. When he joined the orchestra in 1953, its musicians were able to augment their earnings by radio broadcast fees. Today the Philharmonic's music is still used on radio to an even greater extent, but it is recorded, and Mr. Mendelsohn and the other members of the orchestra get nothing.

Louis Nunley of Nashville is probably the most recorded bass singer in the world. He's been a background singer since 1953, with thousands of records to his credit. Over 1,500 of these have made the broadcast charts, and more than 200 made the top 10 in radio play. Lou never received a penny for the broadcast of any of his records.

Lois Winter has been a successful classical and popular vocalist for 25 years. She has performed as a background singer for every kind of recording, literally from A to Z-beginning with the Ames Brothers to Jazz Fiddler Florian Zabach. Remember Mitch Miller's record, "The Yellow Rose of Texas"? How could you forget it. Lois, who has a master's degree in music theory, got $16 for the initial session fee, and nothing for the thousands upon thousands of subsequent radio plays of that record.

Miss Lillian Clark, like Miss Winter, is a working singer living in New York. She began her career with the Clark Sisters, and has sung with such groups as the Skylarks and the Sentimentalists with Tommy Dorsey.

She and Miss Winter together have participated in thousands of New York recording sessions over a span of 25 years. Like the others, Miss Clark has received and receives nothing for the radio plays of her work.

Shirlee Matthews is one of the busiest singers in Los Angeles, devoting a major portion of her time and talent to phonograph recordings. You hear her voice every morning on the radio as you drive to work, and every night as you drive home. Shirlee is in demand because her talent is unique, and her sound, as they say, is popular. But she is not helped by the use of her recordings by broadcasters. Indeed, overexposure may shorten the length of her career. Shirlee and two other ladies whose names you would not recognize were The Supremes, a group whose records were played thousands of times on radio with absolutely no payment to Shirlee or her colleagues.

Ron Hicklin, also from Los Angeles, has a list of titles longer than my arm. He's sung with Frank Sinatra, the Monkees, Andy Williams, and innumerable other stars you would recognize. Mr. Hicklin has received for the work he has done on those records and he will again receive the munificent sum of $18 when he started in the business to about $30 today, just union scale, and not 1 penny for radio plays. These and thousands of their anonymous colleagues are the people

who bring the incomparable joys of music to America and to a large extent bring America to the world.

These people and their colleagues are the indispensable source, the indispensable source of the huge profits of the broadcasting industry. It is our fervent plea that they be granted the recognition and compensation so long and so sadly overdue.

We are deeply appreciative, Mr. Chairman, for this opportunity. Mr. KASTENMEIER. Thank you, Mr. Wolff.

Next is Mr. Stanley Gortikov who has appeared before this committee on other occasions. We greet you, Mr. Gortikov.

Mr. GORTIKOV. Thank you. My name is Stanley Gortikov and I am president of the Recording Industry Association. Our member companies create and market about 85 percent of the records and tapes sold in the United States.

I am here to support legislation granting rights and royalties to recording musicians, vocalists, and companies for the public performance of sound recordings. To supplement my oral testimony. I offer for inclusion in the record a more comprehensive statement.

Mr. KASTENMEIER. Without objection, that statement you referred to will be accepted and made part of the record.

[The prepared statements of Stanley Gortikov and of the Recording Industry Association follow:]

STATEMENT OF STANLEY M. GORTIKOV, PRESIDENT, RECORDING INDUSTRY ASSOCIATION OF AMERICA, INC.

INTRODUCTION

My name is Stanley M. Gortikov. I am president of the Recording Industry Association of America. Our member companies create and market about 85% of the records and tapes sold in the United States.

I am here to support legislation (S. 1111, H.R. 5345 and companion bills) granting rights and royalties to recording musicians, vocalists, and companies for the public performance of sound recordings. To supplement my oral testimony, I offer for inclusion in the record a comprehensive statement on a performance right for sound recordings.

EXTENDING A BASIC COPYRIGHT PRINCIPLE

It is a traditional copyright concept that one who uses another's creative work for profit must pay the creator of that work. The exclusive right of the copyright owner to authorize the public performance of his creative work is known as a "performance right." The compensation he receives for the public performance of his product is a "performance royalty."

A sound recording is a copyrightable, creative work. It is the product of the cooperative, creative efforts of vocalists, musicians, composers, and recording companies. Under the 1909 copyright law, the publisher/composer is paid a performance royalty when a broadcaster plays a record containing the composer's tune. The rest of the creative team, however, the performing artists and recording company, are paid nothing when the product of their creativity-the sound recording itself is used for gain by another.

This makes no sense, Congress has already recognized on two separate occasions in 1971 and again in 1974-that the sound recording bears all the elements of a copyrightable product. Yet, as the general revision bill now stands. the sound recording is the only copyrighted creative work for which a royalty will not be paid when it is performed by others.

Significantly, the revision bill grants new performance royalties to broadcasters from cable TV. Even more to the point. Section 116 grants new performance royalties to composers when sound recordings are played by jukeboxes. The performing artists and recording companies deserve to be included to . . . for the very same reasons.

BROADCASTERS' OWN ARGUMENTS SUPPORT RECORDING INDUSTRY'S POSITION

Ironically, our strongest allies in advocating this principle to Congress are the very same broadcasters who oppose this legislation.

Only last month, broadcasting spokesmen appeared before the House Copyright Subcommittee to support this same principle. The broadcasters seek payments from cable television whenever cable uses broadcasters' copyrighted program material for profit.

One of the broadcaster representatives testified: "It is unreasonable and unfair to let (the cable) industry ride on our backs, as it were, to take our product, resell it, and not pay us a dime. That offends my sense of the way things ought to work in America."

We of the recording industry maintain that it is likewise unreasonable and unfair to let the broadcasting industry ride on our backs, as it were, to take our product, resell it, and not pay us a dime.

Broadcasters expect payment when their copyrighted programs are used for another's profit. So do we. Broadcasters aggressively seek copyright payments when they take risks and make investments. We do too. And the recording industry, like the broadcasting industry, wants equitable payment when its product is used by broadcasters to build audiences, sell commercial time, and build station equity values.

Again, the broadcasters themselves said it best, this time the spokesman for the National Association of Broadcasters: "Copyright law. . . must insure that those who profit without paying compensation, of any sort, do so in violation of the intent of the Constitution's framers."

When it is in their economic interest, the broadcasters support the principle of rewarding creators. When it is not in their economic interest, the broadcasters oppose it. This is neither logical nor fair. We respectfully suggest that Congress not allow the broadcasters to have it both ways.

There are those who may tell you these two situations are different. I suggest to you that they are virtually identical. Only the names of the players are different.

MOST AIRPLAY DOES NOT HELP SALES OF RECORDINGS

The broadcasters will tell you that they should not have to pay a performance royalty for the use of sound recordings, because airplay helps sell records. They will remind you that record companies actively seek airplay of new recordings. As you may know, a few record promoters may not have used good sense in seeking airplay, and may have been in violation of the law. Their alleged misdeeds, however, are certainly not representative of the business behavior of the thousands of persons in the recording industry.

Certainly, record companies do seek airplay on new recordings, so the broadcaster argument may sound good. It is a hollow and deceptive argument, however, if you examine all the facts.

In fact, radio stations do not use recordings for their programming to do record companies a favor. They use recordings because that is the best way, in their judgment, to build audiences-which attracts advertisers, which leads to profits, and also increases station equity value.

In fact, sound recordings are the mainstay of most radio programming. More than 75% of radio program time is devoted to recordings.

In fact, most recordings get zero sales benefit from airplay. The vast majority of recordings never get airplay at all. A Top-40 radio station usually adds only five or six new songs a week to its play list-out of more than 900 new recorded tunes released weekly.

In fact, more than 75% of all recordings released fail to recover their costs. Only about 6% make any real profits, and they must carry the load for all the rest. Classical recordings fare even worse. Over 95% of classics lose money, but they are played on the radio with no compensation to the vocalists, the musicians, or the recording companies.

In fact, some 56% of all recordings played on the radio are those whose meaningful sales' life is over. Over the last few years, we've seen a resurgence of older recordings. Airplay of older recordings drastically cuts exposure opportunities for new records. It does little or nothing to generate more record sales, though it helps radio's own goals.

In fact, although recording companies want their new product airplayed, they certainly are not out for a "free ride." Recording companies today are

among the major purchasers of commercial advertising over radio and TV. For example, our most recent data indicate that in 1972, recording companies paid out to radio stations, over $32,000,000 for commercial advertising. And in 1974, the record industry spent nearly $65,000,000 for television advertising. By way of contrast, the estimated annual yield to recording companies from performance royalties would be about $5,000,000, even less in early stages.

In fact, broadcasters pay for virtually every other form of programming they employ, except for sound recordings. That includes news services, dramatic shows, disc jockeys, personalities, sports shows, game shows, syndicated features, weather, commentators, financial and business services. Yet, they pay nothing for the recordings which furnish 75% of their programming.

We suggest to you that airplay of sound recordings does more to attract advertising profits to radio stations than it does to sell sound recordings. Only some recordings played over the air benefit performers and companies. But all recordings played over the air benefit the broadcasters-old recordings, new recordings, popular ones, and classics. They all build audiences for the broadcasters and enable them to sell time to advertisers.

But the performance royalty principle in the copyright law is not conditioned on who benefits from what. Publishers and composers benefit from the airplay of sound recordings, too. Yet, no one questions their entitlement to performance royalties. Similarly, cable TV operators claim that they should not have to pay royalties because they benefit the broadcasters by expanding their audience, and hence their advertising revenues. But the broadcasters reject that claim, just as we reject theirs. If the principle is valid that one should be compensated for the commercial exploitation of his creative product, then the musicians. vocalists and the recording company are likewise entitled to a performance royalty.

You may also be interested in the fact that nearly every other Western nation grants a performance right to sound recordings. Unfortunately, American record companies are often denied performance royalties from abroad because foreign record companies do not enjoy reciprocal rights in the United States.

THE CREATIVE ROLE OF RECORDING COMPANIES

Perhaps some of you have thought of a record company as “just a manufacturer," producing tapes and discs and selling them, with the creative work coming only from the performers and composer. This is a mistaken notion.

The recording company plays an essential, highly creative role in the development of a sound recording. I spent 11 years as a record company executive, and served as president of Capitol Records for 3 years. I would like to tell you about the many creative processes performed by the men and women who work for recording companies as they originate sound recordings:

1. They develop the creative concept of the record or album and its basic musical ideas.

2. They choose the tunes and subtly merge the right composition with the right performer.

3. They select the arranger and musicians best suited to the unique musical demands of the recording.

4. They produce the recorded performance and coordinate the delicate interplay between vocalist, arranger, musicians, and recording engineer.

5. They execute the extremely complex processes of multiple-track recording and editing and they ingeniously tap the infinite variables of electronicallyinfluenced sound.

A sound recording, then, is an original creative work, which Congress has concluded is a copyrightable product. The creative contribution of recording companies was recognized by the Senate Judiciary Committee when it stated, in its July 1974 Report on Coppright Law Revision, "The Committee . . . finds that record manufacturers may be regarded as 'authors' since their artistic contribution to the making of a record constitutes original intellectual creation." The Register of Copyrights wrote, in 1974, "In my opinion, the contributions of both performers and record producers are clearly the 'writings of an author' in the constitutional sense, and are as fully worthy of protection as any of the many different kinds of derivative works' accorded protection under the Federal copyright statute."

Moreover, the U.S. Supreme Court ruled in 1973 that the copyright clause of the Constitution can extend to "recordings of artistic performance."