The most effective and least costly distribution-dissemination system may well wipe out both producers and AV services as we know them today.

BUT, whatever the substitute or development, there will still need to be creative, entreprenueurial development of effective materials.

Without reward there will be no such development, whether "commercial types" or "educator types" are involved. Theft denies reward.

HE WHO COMMENTS LAST

GOLDEN EGG PRODUCTION: THE GOOSE CRIES "FOUL"

(By Robert Churchill1)

Publisher's Comment.-The development in recent years of high-speed, high efficiency duplication equipment in almost every mode unquestionably poses problems for producers. But I would like to suggest that it is a challenge for consumers as well, on another level. What can be copied? Almost anything in print, on film, tape or records. What may be copied? Almost nothing that is protected by copyright, because the right to make copies belongs to the author or the producer. Seems clear enough, doesn't it?

But with the kids' real best interests at heart, doesn't the impoverished educator have the right to steal a loaf of media bread to feed his hungry horde? If you are tempted by this reasoning, what about another question do the members of this same horde also have the right to satisfy their needs by acquiring without benefit of purchase procedures a book, a beer, a pack of cigarettes, a salami?

Teen-age pilferage is even more rampant than VD. I wonder whether for teachers to steal the works and rights of others by duplication without authorization is any more or less exemplary than teacher fornication in the cafeteria?

Today's sophisticated duplicating capacity can be duplicitous. Let's not be duped ourselves into breaking the law, especially when thousands of kids are observing us.

-ROGER DAMIO.

I am a goose with tears in my eyes. People laugh at me in the street. Children stick out their tongues. A big grown up goose. Crying!

It's about these eggs that I lay. Our eggs. . . well, maybe golden is too strong a word, but with out-of-pocket production costs averaging about $20,000 a film, nobody is eating them for breakfast.

What's all this crying nonsense? It's about videotape duplication. It's about a very real concern of producer-distributors that they will be forced out of business if educators duplicate 16mm films without authorization.

This article isn't going to belabor the illegality of videotape duplication under the copyright law or even the ethics of a little benign larceny (after all, it's for the benefit of the children, isn't it?). Rather let's examine the economics of egg production and why there soon may be no more eggs.

I will have to speak, of course, from the experience of our own small company, but I believe that it is reasonably representative. Let us assume that we produce a film for $20,000 and sell prints for $200. About 65% of that $200, give or take a few percents, pays for print costs, distribution (including preview prints), and overhead. The 35% pays off the production cost. In our example, production cost would be recouped with the sale of 285 prints.

Sounds like a great little enterprise, you say. Only 285 prints before we begin to make a profit. Ah, but it will take us two and a half to three years before we have sold 285 prints. You thought that this was big business, that we sold thousands of prints? No, film companies will sell perhaps 500 to 800 prints during the life of an average film. That's all.

Further, most of that 35% "profit" after the first 285 prints is what we use to produce new films.

The educator's position is that 16mm prints are so expensive that they can afford only a fraction of their needs. Why then couldn't videotape duplication solve the problem of providing all those extra copies that schools so desperately need?

If a fee is paid to the producer for the right to make copies, it's quite possible that the producer can still make a living and the schools can at last

1 Robert Churchill is President of Churchill Films, 662 N. Robertson Blvd., L.A., Calif. 90069.

have as many copies of a film as they need. Personally, I profoundly hope that this will happen. Today films are too rare, too hard for the teacher to get. Availability will cause a great increase in use, understanding of the medium and consequent further demand. Eventually I suspect that the producer will benefit as more funds are channeled into a teaching medium that has finally come alive.

Let's leave the heady vision of tomorrow's cornucopia long enough to notice that the last paragraph begins with an if. If on the other hand, the producer's films are duplicated without compensation, soon there will be no films. The goose is dead.

It works this way. A producer counts on a number of purchasers who buy not just one print, but from two to ten or more. Also, after a few years many users will replace a print that has worn out. If he loses these sales, the producer is in trouble.

An even greater potential hazard comes from the tape-happy media director who doesn't buy even the first print. A person from our company saw this happen in the office of an unselfconscious media director in Northern California last spring. The director, who had on his desk a number of audio tapes sent in for a demonstration project from various producers, was calling across à partition to an assistant, conferring on the number of tapes of each title they thought they should run off on their high speed duplicator. These were not 16mm films, but they might have been.

An ingenious way to save the taxpayer's money, by George! Next year perhaps they can set up a plant and print all their own textbooks by facsimile.

Even if this last imaginative kind of larceny doesn't become the rage in film duplication, the goose will succumb if there is loss of duplicate print orders and replacement sales. Conservatively these will account for 25% of a company's sales. And there isn't a film producer in the country, whether it's EBE or little old us, who wouldn't be out of business before you could say "videotape-duplication" if its gross income dropped by 25%.

No duplication without compensation! Don't kill poor old granny goose! That's the word. Pass it on.

AUDIOVISUAL MANAGEMENT

"UNAUTHORIZED COPYING:" A BUBBLING ISSUE

Historically, most schoolmen thought it acceptable to make a single copy of a commercially produced educational program or of printed materials. Much happened in the past year to dispel that notion.

First, a U.S. court of claims commissioner awarded damages to a Baltimore publisher when a government-related medical library made photocopies of a number of articles from the publisher's journals. Next, the Educational Materials Producers Council, a group of companies that publish programs in various A-V formats, formed a copyright committee to push for revisions in existing copyright laws-revisions which Congress seems closer to passing than at any time in the past five years. Finally, news arrived that Utah's Granite School District had reached a unique licensing agreement on film duplication with Encyclopaedia Britannica Educational Corp.

In order to clarify the new copyright issues, Nation's Schools conducted the following exclusive interview with Ivan Bender, general counsel of Encyclopaedia Britannica Educational Corp. and a member of EMPC's Copyright Committee.-Philip Lewis, president, Instructional Dynamics, Inc., Chicago.

Mr. Bender, we hear a lot these days about so-called “unauthorized copying” of films, filmstrips, videotapes, cassettes and other audiovisual programs. Can you give us an example of a school district with an “authorized” copying policy? Yes. The Granite School District, in suburban Salt Lake City, has requested software producers to grant licenses to reproduce 16mm films in a videotape format. The district has 156 video cassette players and 21 player/recorders. Encyclopaedia Britannica Educational Corp. has proposed an experimental oneyear contract (beginning Feb. 1) under which the district can copy, in unlimited fashion, any EBEC films they own or have leased-or may acquire during the term of the contract. The offer is based on a licensing fee of $56 per unit of equipment, or a total of $9,800 for the year.

This type of proposal lets Granite account only for the number of machines in use rather than keep track of student population, number of copies made, or other factors that could mean a lot of bookkeeping for schools. In essence, the Granite contract was negotiated on only two factors:

1) approximate number of films in use, and 2) units of equipment. If this arrangement proves successful, it will no doubt lead to similar licenses.

Is this kind of licensing likely to become a trend? Do you visualize similar agreements involving other kinds of media, such as audio cassettes or filmstrips? The logic of the plan could extend to other kinds of media-provided that a workable formula could be arranged. If the Granite arrangement proves successful, I'd certainly say that's a distinct possibility.

What has prompted producers of audiovisual programs for education to be concerned over unauthorized duplicating now?

Principally, the improvement of copying hardware. Several years ago, photocopying reached a point of perfection; but only in the past year or so have duplication techniques been refined for such equipment as the videotape player/ recorder.

In addition, the so-called "educational exemption" theory-a widespread feeling in the educational community that certain types of copying for classroom use are permissible as long as this copying is not on a for-profit basis-has been growing. The copyright law does not provide for such an "educational exemption," and I'm sure you can see what the problems of such an exemption might be. Can you spell out the problems?

I'm principally concerned about widespread copying, even if it's on a sporadic or occasional basis. Producers aren't opposed to having their materials copied, but they cannot accept the notion that their materials should be copied in a fashion which would exceed the doctrine of "fair use" unless they receive just and fair compensation.

For producers of audiovisual materials this is a very crucial problem. The copying of even a few films by a school district could mean a severe economic loss to them because unlike texts, which are generally bought for each student in a class, A-V programs usually serve a number of students at any one time. Using numbers, a textbook may sell from 10,000 to 100,000 copies, while an A-V program's sales may not even reach 1,000.

Congress is at work on a new, revised copyright law. How does the existing law define "fair use," and what will the new law say about it?

Present copyright laws date back to 1909. The "fair use" doctrine has resulted from judicial interpretations over the years. Basically, it allows limited copying of small portions of a work without seeking prior permission-and without payment of a fee. For the first time, however, the proposed revision will make "fair use" a part of the law itself. A recent House committee report stated: "Where the unauthorized copying displaces what realistically might have been a sale, no matter how minor the amount of money involved, the interests of the copyright owner need protection." Some factors the user must consider: 1) the purpose and character of the use; 2) the nature of the copyrighted work; 3) the amount of material being copied as related to the work as a whole; and 4) the effect of the copying upon the potential market for the copyrighted work.

From these guidelines, it seems the proposed law will be asking schools themselves to make decisions as to what constitutes "fair use." Can you provide more specific rules-of-thumb?

First, let me say that it's easier to distinguish "fair use" in printed materials than in audiovisual materials. Take a motion picture film, for example. If you use only a quantitative test to determine "fair use," you may well be in a situation that is legally unacceptable because of the very nature of the copyrighted work. Copying one minute out of a film that runs for 20 minutes may not seem to be a violation, but that one minute may be the most expensive and important part of the film-especially if it depicts an event that was extremely difficult to photograph or relates to special kinds of photography.

In the case of filmstrips, however, it's my own feeling that copying one or two frames out of a 50 or 60-frame filmstrip may more easily be interpreted as "fair use." This is not a uniform guideline, though, and the user would still have to consider what these frames represent in terms of the work as a whole. Can copying an entire program ever be defined as “fair use?”

No. This would apply even to print materials because of a recent case involving library photocopying of articles within periodicals. If there's any doubt school officials should contact the firm.

1 Williams & Wilkins Co. v. The United States. Decided by U.S. Court of Claims, Feb. 16, 1972.

57-786-76-pt. 1—22

Does it matter whether districts make single or multiple copies?

Not really. Even single copying of certain kinds of material may violate the "fair use" concept. And multiple copying may subject the violator to a greater amount of damages.

We understand that the Education Materials Producers Council has formed a copyright committee to seek changes in the copyright law. What other organizations are active in this area?

The National Education Association has an ad hoc committee on copyrights that seeks a limited educational exemption for the doctrine of "fair use." Basically, NEA would allow greater latitude in classroom copying than is presently permissible.

Another group, the American Library Association, wants libraries to have freer rights to copy single articles for research purposes and to have the right to supply a copy of an entire work if the library has determined that copyrighted work cannot be obtained from trade sources.

Why are we struggling so hard with the copyright laws when nobody thought about them much for 50 years or so?

For the first few decades of this century, we weren't faced with the copying technology that now exists. We now recognize that there are social values to be considered on both sides of the issue. The new copyright law will allow us to reach compromises so that there will be accessibility to educational materials at the same time that the commercial procedures of these materials are justly compensated for their creative efforts.

May I add that the new law envisions establishment of a commission on technological developments that will assess the effects technical developments will have on the copyright laws. The job of this commission will be to point out and inadequacies in the new laws to the President and to Congress.

Regardless of what happens to the revised copyright legislation, can we assume that educational materials producers will seek new arrangements with schools? If so, what are some alternative plans?

I think we can assume that the new technology will eventually result in some modification of present marketing procedures. We will see more frequent blanket licenses like the Granite arrangement. Or there may be a modification in price structures that will allow a built-in royalty to the copyright proprietor when he sells materials with the right to copy without permission.

So-called compulsory licensing agreements, such as that practiced by ASCAP (music publishers), might be possible; but under present antitrust laws, this would be very difficult to apply to any other industry. The ASCAP arrangement operates under a special government ruling which permits its existence. Is it possible that educational program producers could come up with a double price structure-one price for normal use, and a higher price for unlimited copying privileges?

This might well happen, although I think its premature. Quite naturally, it will be up to individual companies to determine the kind of marketing techniques that are most suitable.

TESTIMONY OF EDWARD J. MEELL, CHAIRMAN, EDUCATIONAL MEDIA PRODUCERS COUNCIL

Mr. MEELL. Thank you, Mr. Chairman.

My name is Edward J. Meell, chairman of the Educational Media Producers Council of the National Audio-Visual Association. With me is the copyright chairman of that council.

I would like, before I get into my formal summary of our statement, to stress the first word in the title of our organization-Educational Media Producers Council. The 95 members of that organization produce almost exclusively for the educational market.

We are not interested in the general consumer market, or the entertainment market. We are producing for elementary, secondary, college, and university schools.

I would like to stress that 90 percent of our organization's members gross less than $5 million a year as a revenue under which they operate. That has to cover all sorts of things from marketing to development.

On behalf of my organization, I would like to say we support H.R. 2223 as it has been introduced, especially section 107, which writes into statutory law the main principles of fair use as that doctrine has been interpreted by the courts over the years. We would hope that fair use does not become free use.

We feel the language, especially in 107, represents an equitable compromise between the creators and users of copyrighted educational material, a compromise that has been painstakingly negotiated over the last several years. The technology which permits the easy duplication of audiovisual materials has been introduced only very recently-I am thinking here of motion pictures, sound filmstrips, and audio tapes after hearings that your committee held in the sixties. It is a very significant development for our industry, one which has already had a great impact on the educational media industry, which merits careful consideration by your committee.

As a point of fact, our industry is very pleased with the progress in technology. It is not our intent to stop that march of progress of technology. It promises to make ideas and information more accessible to scholars, teachers, and learners. These developments promise also to expand the role and contribution of educational media producers to the educational process, which we consider an integral part.

In order to maintain increasing incentives for the creation and production of quality materials, we must not diminsh the statutory production for intellectual products to which any author, creator, or artist is entitled. We are therefore opposed to any amendment which would provide for an educational exemption. We solely distribute, as I mentioned, to the educational market, not to the consumer or the entertainment field.

An amendment which increases the amount of duplication permitted under fair use could significantly decrease potential sales, and therefore the production of instructional materials. Companies in this limited market are faced with two major factors.

First: The vast majority of audiovisual materials are not used in a one-to-one situation. They are used with large and small groups. Therefore, the number of copies made is quite limited-one or two copies of a 16 millimeter film may serve an entire school system of moderate size. A single copy of a filmstrip or a sound recording will serve an entire school.

Second: A typical audiovisual product will customarily sell relatively few copies over a period of 5 to 10 years. This is in comparison to textbooks or to journals which may sell thousands of copies. Sixteen-millimeter films may sell only 500 copies over 5 years. If we lose 50 or 60 of those copies in unauthorized duplication, we are immeasurably hurt.

Thus, the recapture of initial investment in research, development, editorial, and production work, which costs as much for one copy as for many, is spread over the sale of a relatively limited number of copies. In addition to the substantial initial investment required for these materials, there must be added operating expenses for the period of time over which sales are made.

The combination of these factors-limited market, small volume. and sales over an extended period-means a specific broadening of the fair-use eriteria could damage beyond repair the quality and diversity