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S. 1111 AND H.R. 5345—NUMBER OF RADIO STATIONS, BY STATE, IN EACH ROYALTY RATE CATEGORY

(Categories are annual revenues of reporting stations, in thousands of dollars)

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Alaska...
Arizona..
Arkansas.
California...
Colorado....
Connecticut....
Delaware......
Florida..
Georgia.
Hawaii.
Idaho..
Illinois..
Indiana.
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Kansas..
Kentucky.
Louisiana..
Maine...
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Massachusetts.
Michigan.
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Missouri.....
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Nebraska....
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S. 1111 AND H.R. 5345-NUMBER OF RADIO STATIONS, BY STATE, IN EACH ROYALTY RATE CATEGORY

(Categories are annual revenues of reporting stations, in thousands of dollars)

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stations with revenues between $100,000 and $200,000 pay a flat fee of $750; stations with more than $200,000 in revenues pay a 1 percent royalty on net advertising receipts.

Source: FCC filings by individual stations for 1972. Note: Under the royalty rate proposed in S. 1111 and H.R.5345, stations with annual revenues under $25,000 are exempt; stations with revenues between $25,000 and $100,000 pay a flat fee of $250;

I. RECORDING COMPANIES AND PERFORMING ARTISTS MERIT A PERFORMANCE

ROYALTY

The performer's interpretation of a tune is crucial to its success, and is no less a contribution to the recorded product than is the composer's original lyrics and score.

Many vocalists and musicians are not sustained by royalties from record sales, and their opportunities for live performances have been sharply curtailed by the use of pre-recorded music by broadcasters. A performance royalty would alleviate this situation.

The recording company's creative contribution to a song is very significant; it constitutes original creative activities to which copyrght protection can be granted under the Constitution.

The recording company must underwrite severe financial risks in the production of a record; over three-fourths of all records fail to break even financially and the proportion of failures is rising. Yet broadcasting companies profit from the airplay of all records, whether successful or not.

Congress and the Register of Copyrights have noted the merits of a performance royalty for sound recordings. In addition, the constitutionality of vesting a copyright in a sound recording has been upheld by the courts. The performer's interpretation of a tune is crucial to its success

Performers' interpretations of tunes and their participation in the actual creation of audible music contributes creatively to the recorded product no less than the actual tunes composers contribute to recordings. A record is a composite of the artistic creativity not only of the composer, but also of the performer and the recording company."

As William Cannon stated,

“There are many factors in the total popularity of a record, and the song itself is many times of minor importance. The most important factors vary in predominance from record to record and any one of them may be of prime importance on a particular recording. These are the artist (singer, instrumentalist, or group) ...; the song or tune, but never in its original state; the arranger who embellishes the composition or orchestrates the work and decides how the total musical sound will be arrived at ...; the engineers who control acoustics and make electronic alterations in the sounds ...; and the very important area of exposure and promotion to the public." 10

The performer can make an important creative contribution to every type of recording. The highly talented jazz musician's original interpretation of a musical composition is often far removed from the original tune set down in lines of notes of the copyrighted work. In classical music, too, there can be considerable variation in the interpretation of a piece. As the Director of the Boston Symphony Orchestra stated,

"Improvisation is one of the earmarks of the performer in music. . . . You're engaged in a creative act whenever you interpret a score. If the performer and the artists were not important, then one recording of Beethoven's Ninth would be sufficient for everyone for all time. Why bother with a second interpretation if it can be no different than the first? Or a third ?" 11

The role of the artist can be even greater with popular music. Here it is often the artist's performance as much as-or more than-the composer's tune that makes the recording attractive to both record buyers and radio audiences. The artist as much as the tune have made hits of Barbra Streisand's “People”, Frank Sinatra's "My Way", and the like. There must be a hundred versions of "White Christmas", but it is Bing Crosby's special rendition which is continuously popular at Christmas each year. Listeners are eager to hear albums by Andy Williams or the Boston Pops Orchestra, but may be less concerned with any particular song or its composer. In some cases a song which enjoyed

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10 Statement of William Cannon, owner of the Cannon Coin Machine Co., Hearings Before the Subcommittee on Patents, Trademarks, and Copyrights of the Committee on the Judiciary. U.S. House of Representatives on H.R. 4347, 1965, pp. 565-566.

ent of Erich Leinsdorf, then Music Director of the Boston Symphony Orchestra, in Hearings Before the Subcommittee on Patents, Trademarks, and Copyrights of the Committee on the Judiciary, U.S. Senate ... S. 597, April 1967, p. 821.

little success in one recording becomes a hit when a new recording is made with a different artist or arrangement.-- Yet, ironically, the performer who makes a composer's tune into a hit, and earns that composer much compensation in the form of mechanical royalties and performance royalties, shares in none of the performance royalties himself. The composer is deservedly paid performance fees for his contribution to a recording used by broadcasters, but the performer, too, is entitled to compensation. Royalties from record sales do not sustain all performers

Performance fees would provide needed income to those performers who fail to earn substantial royalties from record sales--classical artists, jazz artists, and many popular artists as well. Such performers “never burst into stardom because their appeal is only felt by a narrow segment of the public. They may never have a hit record, although they may have many, many records which are performed time and again for commercial profit." ** One performer reports, "he is ‘very big in supermarkets and elevators', and everywhere he goes he hears his music being played. Yet he does not receive one dime for these commercial performances.” 14

Performance royalties would also bring income to singers no longer collecting substantial royalties from the sale of their hit recordings. Many famous artists, such as Ernie Ford, Mitch Miller, and Pat Boone, sell fewer records today, but airplay of their old records remains heavy. Some radio stations still offer the recorded music of Nat King Cole, and "... everyone benefits but Nat Cole's widow and children. The sponsor attracts an audience with one of the top vocalists of our generation, and the radio station sells time to the sponsor, the writers and publishers of the songs are paid performance fees for the broadcast of these songs, but Nat Cole's widow and chil. dren receive absolutely nothing, nor does the record company that spent 20 years building him as a top recording artist, and owns the masters which are used for these delayed performances." 15 Such performers (and their heirs) should be compensated for the continued commercial exploitation of their endeavors by others.

Performance fees would, of course, also increase the income of those fer artists who are presently collecting sizeable artists' royalties from the sale of their recordings. However, the recording carecrs of cuen 8uCCC88ful performers tend to be distressingly short, and artists, like baseball players, must often maximize income within short periods. “It is not unusual for a performer to find himself in a high tax bracket for a year or so, to be followed by a lifetime of oblivion. The rise of a star is sometimes meteoric, but his popularity often burns out just as quickly.” 10 Furthermore, the percentage of performers who are successful for even a brief period is far smuller than is apparent to the general public, which has been fed tales of the fortunes earned by the recording world's fleeting stars. Many artists dream of riches, but few actually attain them. One recording company reported in 1967, that of the performers that they list, only 14 percent had earned enough royalties on sales to defray the expenses normally charged to artists' royalty accounts. Only 188 or so of its 1,300 performers had a profit in their royalty account." Performance fees from broadcasting would supplement the income of at least some of these artists who are receiving meager royalties from sales.

The Minority Report of the Senate Judiciary Committee (in July 1974) expressed concern that, if broadcasters had to pay performance royalties to per. formers and record makers, “it may well become cheaper for broadcasters to revive studio orchestras and be content to pay the musicians' union scale." **

12 See “Publishers, Labels Find Success With 'Underexposed' Copyrights", Record World, January 25, 1975, p. 4.

13 Statement of Stan Kenton in Ilearings Before the Subcommittee on Patents. Trademarks, and Copyrights of the Committee on thc Judiciary, U.S. Senatc... 8. 597, April 1967, pp. 542 and 543.

1. Ibid.
15 Statement of Alan Livingston in Ibid., p. 500.

10 Statement of Stan Kenton in Hearings Before the Subcommittee on Patents, Trademarks, and Copyrights of the Committee on the Judiciary, U.S. Scnate ... S. 597, April 1967, p. 821.

17 Statement of Michael DiSalle in Ibid., p. 832.

18 U.S. Senate, Committee on the Judiciary, Report on Copyright Law Revision (Report No. 93-983), July 3, 1974, p. 226.

Performers certainly would have no objection to such a turn of events, but unfortunately, broadcasters are unlikely to abandon the use of recordings simply because of a new performance royalty which increased their expenses by less than 1%.18

In conclusion, performers are entitled to compensation for the commercial use of recordings created by their artistic endeavors, just as composers certainly merit the performance fees paid to them for the privilege of using their work in broadcasting for profit. The recording company's creative contribution to the artistic rendition is very substantial

A recording company makes a two-fold contribution to a recording: the technical manner in which it records a piece of music, and the financial risk it undertakes in producing the recording

The quality of a recording and its appeal to listeners is very much affected by the way the recording was made: the type of recording equipment and studio facilities used, the electronic effects and recording techniques employed, and the character of the song arrangement and background music selected. As recording techniques have become more sophisticated and as experimentation with electronic effects has grown, the creative contribution of recording companies to their products has increased dramatically, beyond simply the fidelity of a recording.

An article in the Wall Street Journal describes "How Record Producers Use Electronic Gear to Create Big Sellers." 20

"Each instrument has its own microphone leading to its own track on the big console's recording tape.... (The producers) will cut, slice and dub tracks from the best of the musicians' performances to eliminate flubs by one or two of them, and they'll pick tapes from (the singer's) performances for her best lead vocal. For her harmony parts, they can manipulate the tapes to make her sound like a duo, a trio, a quartet- or even, if necessary, a 16-voice choir. They also will add violin flourishes, called 'sweeteners'. Finally they will blend and distill all this into two stereo record tracks."

The creative contribution of recording companies was recognized by the Senate Committee on the Judiciary when it stated, in its July 1974 Report on Copy. right 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." 41

19 See pages 41-42. infra.
20 Wall Street Journal, February 12, 1974, p. 1.

21 U.S. Senate, Committee on the Judiciary, Report on Copyright Law Rerision (Report Xo. 93-983), July 3, 1974, p. 140.

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