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Mr. SIMPSON. We understand that is correct. My own personal knowledge, I do not know of my own personal knowledge, I have read accounts stating that to be true.
Mr. KASTENMEIER. You stated, however, you received two letters, letters from two networks presumably not the
Mr. SIMPSON. I am sorry, I must have misspoken.
Mr. KASTEN MEIER. You said you or the university had heard from two networks concerning
— Mr. SIMPSON. The Library of Congress in 1969 wrote all three networks and it did not receive word from two.
Mr. KASTENMEIER. As far as news programs go, do you understand that news program does not include interview shows and news documentaries and other public affairs presentations?
Mr. SIMPSON. I would understand it in a term of hard news programs in the way that the networks use it. I would also understand it in the same context, the same meaning as a “news reporting” in section 107 of the proposed Copyright bill which gives to the networks themselves. and other news people the right to use copyright material.
Mr. KASTENMEIER. There is a substantial difference, is there not, between an archival use of material and educational use of ephemeral material such as that described by Mr. Evans, that is to say, that which is thought to be sold and erased after 30 days as a transitory educational use of the material. But when you talk about archival use, you are talking about long-term preservation of materials, are you not?
Mr. SIMPSON. Yes; I think that because of the expenses involved and the present state of technology there are only going to be a very few archives of television news material. I think that will change sometime in the future but now it is going that way so I think whatever archives existed should be available on a national basis and should be as easily available as possible.
Mr. KASTENMEIER. The reason I raised that is your description of the use of this collection of Vanderbilt tends to be somewhere between a true archival preservation and an educational use. You talk about it being available to the undergraduates of Vanderbilt in some sort of educational process as opposed to strictly a preservational archival use of the material.
Mr. Simpson. I very strongly believe it should be available for both purposes. It is an expensive operation particularly expensive for a library to undertake. We, for example, estimate that only about $2 to $3 out of each $100 of money spent is retrieved in service fees, so it is very expensive. I think it would be too expensive just to keep it for current years, too expensive just to keep it for use 25 or 50 years from now. So, I think if you can combine the two, that is what should be done.
Mr. KASTENMEIER. We have preserved much of motion picture films over the years, although some of the older motion picture films have decayed. Is it your intention that this be preserved over a long period of time, in perpetuity or scholarship uses of those you may wish to examine many, many years hence!
Mr. SIMPSON. Yes; I think it should be preserved for a long time. And we are somewhat worried by the fact that we do not know how long video tape will last. Definitely the material which Vanderbilt has, which goes back to 1968, should be transferred to archival quality film. It is just that the money has not been available to do that.
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Mr. KASTENMEIER. The gentleman from Massachusetts ?
I wonder, Mr. Simpson, whether you would say, pursuant to what you say on page 4, that Vanderbilt and every library should have the same rights with regard to CBS news that they have with regard to the New York Times and Atlantic Monthly.
You say you have traditionally been able to collect and circulate copies of newspapers and other forms of print journalism. I take it you would say there is no difference and that the librarians should have the same rights to both media?
Mr. SIMPSON. It seems to me the only difference would be-because of what has taken place—there should be even more importance in keeping television news than the other-print news.
Mr. DRINAN. Aside from the importance, the television you would say has no greater right than the print media as far as copyright?
Mr. SIMPSON. No; in fact, it seems to me, they have less because the television people do have some certain public rights granted to them which newspapers, for example, do not have, such as the use of public airways. I do have figures and I know we do not have time for them, but it-television-is not an unprofitable business and it seems to me that it is not asking too much of them to give up, what in my opinion as a sales manager and a salesman for 38 years, is not a big income, in order to make this material available.
Mr. DRINAN. Going back to the practice of CBS in selling the rights to reprint on a photograph, CBS Morning News to various schools; would you think the New York Times would have that right or would not have. Mr. SIMPSON. I do not know, sir.
I would question very strongly, and this is based on talking with newspaper people over these 7 years, I would question very strongly whether or not they would want to exercise a right to sell.
I know you can go into any library in the country, and I checked with the Library of Congress yesterday, you can go in and make copies of excerpts from newspapers. I think we would consider that the New York Times was very unavailable if there were only one copy of the microfilm of the New York Times in one place in the United States.
Mr. DŘINAN. On page 2 of your testimony, I am not certain that the electronic media are granted exceptional privileges under the bill. You suggest that under the proposed bill that section 107 gives special privileges to the electronic media. I think that goes for all the media, does it not?
Mr. SIMPSON. That is correct. Yes, sir.
Also may I correct an error on page 2 which I intended to correct when I started. The bottom of the page says required "by law” to air news broadcast. “By law” is not correct. There is no law I understand but as a matter of practice of the FCC, any local television station that had no news program would have an extremely difficult time in getting their license renewed.
Mr. Drinan. Are you completely satisfied for your purposes with H.R. 2223 or would we have to also add the bill of Senator Baker?
Mr. SIMPSON. I am just interested so far as the pending bill is concerned that it not prohibit news archiving and library activity. I am very much of the opinion that there should be a national archive for news.
Mr. DRINAN. Is Senator Baker's bill necessary in addition to this bill to carry out all your purposes?
Mr. SIMPSON. I suspect that some sort of national funding is necessary. They have had some difficulty at Vanderbilt in raising the funds to keep it operating. I think it should be on a guaranteed basis.
Mr. DRINAN. Aside from the funding, sir, for copyright purposes must we add Senator Baker's bill to H.R. 2223.
Mr. SIMPSON. I do not think so for copyright.
Subsection 4 says a limited number of copies. How many copies did you have in mind? Might there be the necessity of a number of copies ?
Mr. SIMPSON. I do not know. I might say this, I agree very strongly with the theory that there should be no commercial competition with the networks and I suppose that the reason for putting any limited number of copies would be that you want to emphasize that point.
The Vanderbilt television news archive procedures contain a provision, for example, that the material cannot be duplicated or rebroadcast and that is signed before anybody rents the material.
Mr. KASTENMEIER. My second question is, and my first question was directed to see whether again we were talking about archival use or educational use. Educational use might need a number of copies, archival use would not need so many copies.
My last question is, to your knowledge, is Vanderbilt the only entity other than potentially the Library of Congress which is presently engaging in this practice ?
Mr. SIMPSON. Yes, sir, it is and the National Archives. Mr. KASTENMEIER. Are there any other universities or other institutions public or semi-public, that have an interest in the use to which you have directed yourself in Vanderbilt?
Mr. SIMPSON. Yes; the Vanderbilt archives has received requests from all over the world for this information. The monthly index and abstracts published at Vanderbilt University are being distributed to about 7 or 8 foreign countries by request; and also to approximately 450, mainly libraries, in this country.
The point is, Mr. Chairman, that this material is so expensive, just the cost of the raw tape for example, that it almost has to be, for the present time, available in one or two locations; but available to other locations through copies of the tapes on a rental basis or through the request of a compiled tape on certain selected cases that they have picked out, they want to see.
Mr. KASTENMEIER. Thank you, Mr. Simpson. Next, the Chair would like to proceed to the question of cable television and section 111, in H.R. 2223.
First, as one of the representatives of the motion picture industry, the Chair will like to call Mr. William K. Howard, who is president of the Hollywood Film Council.
[The prepared statement of William K. Howard follows:] STATEMENT OF WILLIAM K. HOWARD, PRESIDENT OF THE HOLLYWOOD FILM COUNCIL
Mr. Chairman and Members of the Subcommittee. My name is William K. Howard. My address is 1427 North La Brea Avenue in Hollywood, California. I am the President of the Hollywood Film Council, made up of the 27 largest ·craft unions and guilds in the motion picture industry. Their members are
engaged in the production of films for theater, television and cable viewing. Appended to my statement, which I will not take your time to read now, is a list of the craft unions and guilds for whom I am authorized to speak and that are united in the Hollywood Film Council. These unions and guilds have a membership of some 60,000 men and women whose livelihood depends directly on the viability of the American film industry.
I am here, Mr. Chairman, at the direction of the Film Council and its membership to express their deep concern on the question of the payment of copyright. I have been asked by Mr. Chester Migden, Executive Secretary of the Screen Actors Guild, to express his personal regret at his inability to be present today to speak for the Screen Actors. The officials of his guild are meeting in San Francisco today. We welcome this opportunity to express our views and are grateful to you and the Members of the Subcommittee for the opportunity to appear here.
Let me say first that we endorse in general terms the passage of the Chairman's bill, H.R. 2223, in short, the requirement that royalty payments be made for the use of copyrighted materials. We support fully the viewpoint expressed by Mr. Valenti, President of the Motion Picture Association of America, and request the most careful and serious consideration of the changes and modifications he has urged.
The enactment of an up-to-date copyright law is essential and important to labor. It is a bread and butter issue for those who work in Hollywood and New York in the production of film. Some people seem to have the idea that copyright royalty is something that accrues only to an already rich author, or composer, or maybe a highly-paid actor, or even to some large corporation. Maybe that's because the word “royalty" seems to connote something kingly or rich.
For the record, let me make it very clear that payments for the use of copyrighted material in the film industry mean employment-jobs-for thousands of people. Payment for copyright means both jobs and more money for carpenters, painters, electricians, teamsters, cameramen, costumers, grips, projectionists, property men and many others. In Mr. Migden's behalf, I speak also for the Hollywood creative guilds whose membership includes such creative people as actors, screen extras, film editors, musicians, writers, and directors. All are beneficiaries of copyright royalty payments.
We have experienced tremendous unemployment in Hollywood. Today, you people in Congress are concerned about an unemployment rate of 8% in the country. Last year unemployment rates in Hollywood ranged from a low of 1012% to 89% in our unions and guilds with a combined average unemployment rate of almost 40% across the board. VARIETY, the film industry trade paper, reported recently that film production by the majors was at an historic low. Thus, on top of several years of miserably low employment opportunities, these facts spell å worsening employment situation in the film industry. Payment of copyright fees means additional funds become available to bolster production and distribution.
Now, you are being told by cable interests that they comprise a special class; that all or a portion of the cable industry's revenues should be exempt from paying for the program material that is the first and prime essential of their operation.
Why should cable get a free ride?
All of us prate about our free enterprise system. Cable television is a privately owned free enterprise business. It doesn't give anything away free. It charges its subscribers a fee for the programs it sends to their homes. That fee ranges from as low as $4.50 a month to more than $20 a month. The national accepted average is about $6 a month. What does the projected copyright fee add to that cost?
Well, it is simple enough to compute the effect of the fee schedule in the pending bill, the so-called Gurney schedule. Assuming the average $6 a month cost sto each cable subscriber, that copyright fee amounts to an average of 3¢ a month per subscriber or 36¢ a year! That's what we are talking about.
Yet some cable system owners have the effrontery to suggest that this fee would put them out of business or would be a serious burden to their subscribers. That, I suggest, Mr. Chairman, is poppycock. It should be nailed as blatant propaganda and I want to nail it. The fact is that the cable business is, in the main, an exceptionally lucrative business. Rates of return of small to medium
sized systems range as high as 50% or even more on the investment. Yet these are the people who cry wolf.
Indeed, even the original copyright fee schedule first promulgated by Senator McClellan was wholly inadequate, compared to the copyright fee paid for the same material by television station users. Now this copyright fee schedule is before us, sliced in half. If the Congress persists in enacting any fee schedule, it is imperative that the Royalty Tribunal be established and authorized to move ahead promptly with detailed studies to determine a fair and reasonable copyright fee for the cable business.
Frankly, we find it hard to understand why the Congress should get into the copyright rate-making arena. We much prefer Chairman Kastenmeier's original proposal eight years ago that left it to the market place free negotiation between seller and buyer. It has worked fine for theaters and television. Why, all of a sudden, should Congress prescribe copyright fees in one special area.
I am afraid, Mr. Chairman, that I am taking a bit too much time. But I cannot over-emphasize the importance of this matter to our members. I repeat it is a bread and butter issue. We urge you strongly to make sure that a fair and reasonable return is derived from cable's use of the product we make in Hollywood and New York. I thank you for your courtesy and patience.
MEMBER ORGANIZATIONS The list of the member organizations of the Hollywood Film Council includes the three International unions, International Alliance of Theatrical Stage Employees, American Federation of Musicians, and L.A. Joint Executive Board of Hotel & Restaurant Employees and Bartenders Union, and the following guilds and craft unions : Affiliated Property Craftsmen, IATSE Motion Picture Studio Electrical TechLocal 44
nicians, IATSE Local 728 American Federation of Musicians Lo- Motion Picture Studio Grips, IATSE cal 47
Local 80 Building Service Employees Local 278 Motion Picture Studio Projectionists, Composers and Lyricists Guild of Amer- IATSE Local 165 ica
Motion Picture Studio Teachers and Costume Designers' Guild
Welfare Workers, IATSE Local 884 Dining Room and Cafeteria Employees Office and Professional Employees Local 8
O&PEIU Local 174
Scenic Artists, IATSE Local 816
Screen Extras Guild
Studio Transportation Drivers Local 399 Motion Picture Film Editors, IATSE Studio Utility Employees, LIU Local Local 776
724 Motion Picture Screen Cartoonists, Make-Up and Hair Stylists, IATSE IATSE Local 839
TESTIMONY OF WILLIAM K. HOWARD, PRESIDENT, HOLLYWOOD
Mr. HOWARD. Thank you, Mr. Chairman.
Mr. HOWARD. Mr. Chairman, and members of the subcommittee, my name is William K. Howard. My address is 1427 North La Brea Avenue in Hollywood, Calif. I am the president of the Hollywood Filmi Council, made up of the 27 largest craft unions and guilds in the motion picture industry. Their members are engaged in the production of films for theater, television, and cable viewing. Appended to my statement, which I will not take your time to read now, is a list of the craft unions and guilds for whom I am authorized to speak and