"Science and Engineering Television Journal," "College Credit Course: History" and "Basic Concrete Technology." In 1975, there are still some instructional and public service programs, such as "Folk Guitar," "General Assembly Today," and "Consumer Survival Kit." However, we now also find pure entertainment programs, such as "Monty Python's Flying Circus," "At the Top-Music," "The Way It Was-Sports" and "Hollywood Television Theater." No one can seriously claim these programs are not designed to "entertain . . . a mass audience." Obviously, public broadcasters seek as sizable an audience as possible. As Broadcasting stated in its issue of November 8, 1971: "David Ives, President of WGBH-TV, responded with one word when asked how he would react if that station suddenly found itself ranked second in its market: 'Yippeeee!'" This drastic change in programming, from purely "educational" shows to "entertainment" and "cultural" shows, applies not only to one station in North Carolina, but to all public broadcasting stations. In 1967, the public broadcasters submitted a number of charts analyzing "ETV broadcasts and programs" to the Senate Subcommittee. Chart 4, printed in the 1967 Senate hearings at 225 and attached to our statement as Exhibit C, shows the general broadcast categories of programs over thirteen public broadcasting stations. The programs (which were counted by number rather than by hours) were divided into three categories: in-school instructional, non-classroom studies, and adult informational and cultural. Entertainment programs were placed in the last category. We made a similar study of programs over eleven of the same thirteen stations (listings for two stations were unavailable) for weekly periods in January, 1975. The result is attached as Exhibit D. The percentage of nonclassroom study programs remained the same, 30%. The percentage of in-school instructional programs declined from 43% in 1967 to 14% in 1975. And 85% of those in-school instructional programs are nationally distributed programs such as "Sesame Street", "The Electric Company" and "Mr. Rogers". The dramatic change is in the adult informational, cultural and entertainment programs-an increase from 27% in 1967 to 57% in 1975. Public broadcasters are now concerned with "show biz" just as commercial broadcasters are. Certainly one may argue over the relative merits of the entertainment programs broadcast by the two systems-"Masterpiece Theatre" may be more "worthwhile" to some than "All In The Family". But both are broadcast to attract and entertain mass audiences. The argument that public broadcasters should be treated differently from commercial broadcasters, if it ever made sense, makes none when both are competing for the same audience with the same type of programs. C. THE REVENUES OF PUBLIC BROADCASTING HAVE GROWN SUBSTANTIALLY IN THE LAST DECADE The total income from all sources to public broadcasting in fiscal 1970 was $103,640,692 (Broadcasting, November 8, 1971). According to the 1974 annual report of the Corporation of Public Broadcasting, the industry's income for fiscal 1973 grew to $238,800,000-an increase of 230%. One large and increasing component of public broadcasting's revenues is contributions by corporations, referred to by public broadcasting as "underwriters" and by the court in the Rohauer case as "sponsors". According to CPB's 1974 annual report, grants from business and industry totaled almost $8,000,000 for fiscal 1973. The increase of contributions by a firm like Mobil Oil reveals the value corporations ascribe to sponsoring public broadcasting programs. In 1971, Mobil gave $490,000 for public television programs (The Village Voice, May 12, 1975). By 1975, that sum had grown to $2,000,000 (New York Times, May 31, 1975). Mobil pays the commercial networks only twice as much, $4,000,000 per year. The fact that corporations spend large amounts on public television programs demonstrates the value of the good will and advertising they derive from such sponsorship. That value is also reflected in the amounts of money spent by corporate sponsors on other advertising, designed to connect public broadcasting programs with the sponsoring corporation. In 1971, Mobil allocated $260,000 to such advertising (The Village Voice, May 12, 1975). By 1975, that amount had increased to $700,000 (The New York Sunday News, February 9, 1975) Corporate sponsors are quite explicit about the reasons for their sponsorship of public broadcasting programs. Robert Kaufman of Bristol Myers, which provided $850,000 for "The Thin Edge", a series on mental health, explained: "We think we receive great prestige to be identified (in the public mind) with something like this." (The Village Voice, May 12, 1975). Indeed, the commercial advantages of sponsorship of public television programs are so great that a proposal has been made to end the "hypocrisy" of the system and introduce commercials to public television (The New York Times, June 15, 1975). Accordingly, we find that public broadcasting not only rivals commercial broadcasting in structure and competes for the same audience, but it also competes with commercial broadcasting for sponsorship revenues. Indeed, public television is viewed by many as the best institutional advertising medium available. If it sells companies, rather than products, it is no less an advertising medium. D. THE MATHIAS AMENDMENT DOES NOT TAKE INTO ACCOUNT THE POTENTIAL GROWTH AND CHANGE OF PUBLIC BROADCASTING When this Committee held hearings in 1965 on the public broadcasting aspects of copyright law revision, its members saw that educational broadcasting was developing in ways that brought it closer to commercial television. In questioning the public broadcasting representatives, Congressman Kastenmeier asked: "But do you not feel that authors, composers, and publishers are concerned in part that educational broadcasting, especially television broadcasting, has approached commercial broadcasting in program content and in moving for a share of the general audience? Don't you feel this must be a concern of some authors, composers, and publishers?" Mr. Aleinikoff replied: "I think there is a great deal of concern about educational television and the kind of programming it is presenting. That is one of the reasons why I was careful to include in the exhibit an example of the kind of broadcast that is being made by ETV stations today. "It is a difficult problem. Commercial networks broadcast credit courses at six o'clock in the morning. That does not make them educational broadcasters. "Educational stations broadcast symphony concerts at night, yes; but these are really a minority of the kind of programs they do broadcast. If you will look at any of the ETV schedules you will see that there are mostly credit courses and other material of a direct educational nature. The more general programs that people have talked about here, such as symphonies, are, in the main, national programs produced by National Educational Television or by one of the other large ETV programming organizations where, as far as I know, all of the copyrights are cleared by the producer." (1965 House Hearings at 512-513). As we have seen, the nature of public broadcasting's programming did change radically. Public broadcasting no longer is concerned exclusively (if it ever really was) with material of a direct educational nature. It is increasingly concerned with entertainment programming. The educational programs are no longer local credit courses-they are now nationally produced and distributed programs. In 1965, the producers, as Mr. Aleinikoff said, were obtaining synchronization licenses. They never obtained performance licenses and stopped seeking synchronization licenses in 1967. In a similar vein, the following exchange took place between Congressman Poff and Mr. Aleinikoff : "Mr. Poff. Mr. Chairman, I would like to make one further statement rather than propound a question. "I am sure the witnesses understand that this subcommittee and this Congress are faced with the problem of legislating not alone for the present, but for the unforeseeable future. It is true that ETV is now in its infancy. Its financial resources are limited. The scope of its effort is not as broad as it one day will be. "We must, I say, look to the future in trying to weigh the equities involved and trying to balance the rights, one against the other, hopefully in the end serving the long-range national interest. "So, I hope that those on both sides of this issue will appreciate the delicacy, the difficulty which is ours and will help us, and I am sure you want to help, to arrive at an equitable solution. "Mr. Aleinikoff. I think we agree, but I would like to emphasize this one thing if I can. I think that we who are in educational broadcasting feel seriously that we are a part of the educational process. "One of the things that has affected us in this endeavor has been a kind of singling out of educational television as a different mechanism and quality. We feel we are a part of education. "Mr. Poff. You are indeed a part and you will become an increasingly important part of the whole educational effort. You must also concede, of course, that in some measure even now you are in competition with commercial television stations and it is possible that the future may hold some unknown things in that area. "This is what I have in mind when I say that we have a difficult chore in balancing all the equities. "Mr. Aleinikoff. I think we would say we are in competition with commercial television only in the same way that an adult extension lecture is in competition with the movies. In other words, we are in competition for viewers' interest, and for people to watch and to learn from our programs. We do not feel that we are in competition on subject matter. "Mr. Poff. You are not competing with them for profit, of course, but you are competing with them for their audience and an audience is a profit to a commercial television station. "That is what I mean when I say you are competing with them. To whatever extent you reduce their audience aren't you reducing their commercial potential, the potential profit they might be able to make? I am not arguing their case. I am simply stating the facts to illustrate what I mean." (at 515-516). Mr. Poff was prescient. And Mr. Aleinikoff's statement has lost any accuracy it ever had. Public broadcasting is not in competition with commercial television only in the same way that an adult extension lecture competes with the movies. As Congressman Poff noted, public television does reduce the audience for commercial television. By reducing the audience for commercial broadcasting, public broadcasting not only reduces the potential revenues of the commercial broadcaster, on which ASCAP's fees are based, but also reduces the commercial potential of the material being broadcast-including the copyrighted works contained in the programs. For example, if PBS were to network a series of musical specials on the works of a particular composer, time or type, no commercial network would produce and broadcast a similar series for a long time thereafter. The public television series would "saturate" the market for such specials. Those whose music was used would not only be deprived of deserved income so long as public broadcasting pays nothing, they would also lose the potential market of commercial broadcasting. In 1965 Congressmen Kastenmeier and Poff foresaw the future. Today, as then, Congress must legislate not alone for the present but for the future too. It must consider the present size, structure and programming of public broadcasting and its potential growth and future. We believe that when these are viewed realistically the only conclusion that can be reached is that public broadcasting needs no special treatment-on the contrary, the interests of creators and the public at large require that licensing arrangements be made with this industry in precisely the same way they are made with all others. V. None of the justifications offered by public broadcasting for the Mathias amendment are valid Public broadcasting has offered three justifications for the Mathias Amendment: First, it claims that it has encountered great difficulty in clearing copyrighted musical compositions for broadcast; second, that the costs are prohibitive; and third, that it is somehow "different" from all other users of copyrighted works and therefore requires special treatment. None of these is valid. A. THERE IS NO PROBLEM IN CLEARING BROADCAST OF COPYRIGHTED MUSICAL COMPOSITIONS Public broadcasting argued the "difficult clearance" point by stating: “Under S. 1361 as enacted by the Senate, public broadcasting would be required to clear and negotiate payment for each piece of copyrighted material. The difficulty for public broadcasting in obtaining such licenses expeditiously from copyright proprietors is undeniable." (PBS Comments, p. 6) As far as copyrighted music is concerned, this statement is incorrect and we deny it. First, performance rights are easily licensed. By entering into a license agreement with each of the three major performing rights organizations, ASCAP, BMI and SESAC, public broadcasting can be assured of performance licenses in virtually all copyrighted musical compositions. Second, copyright proprietors have offered to grant synchronization licenses so that public broadcasting can be assured of such licenses for all its broadcasts. There is simply no clearance burden on public broadcasting whatsoever. In the mid-1960's, when public broadcasting was still securing individual synchronization licenses, it had no "difficulty" in clearance. This fact is demonstrated by copies of four illustrative letters from NET to one music publisher, Associated Music Publishers, Inc., attached as Exhibit E. These letters contradict PBS' recent assertions on clearance "problems". For example, in the PBS Comments, especially in the attachment on clearance problems from WNET-TV, public broadcasting claims that it is often impossible to obtain synchronization licenses because of rigid production deadlines. But NET's letter to Associated Music Publishers of March 8, 1965 acknowledges that the publisher has helped in meeting those deadlines: "In conclusion, I would like to thank you very much, on behalf of N.E.T. for your efforts in our behalf in seeing us through clearance of the above in time for our production deadlines." In addition, the WNET memorandum states (at page 6) "under the present system it is naive to expect that clearance be received prior to transmission." What is not said is the crucial point: it is standard practice in the television industry to clear compositions after production, and even after broadcast. In fact, this was also NET's practice. NET's letter to Associated Music Publishers of August 13, 1965 states: "We wish to thank you and Associated Music Publishers, Inc., very much for your most helpful cooperation in completing this work and especially for the use of this very fine music. You will note that I have dated these licenses somewhere in the vicinity of the date on which they were recorded." Standard arrangements can readily be worked out as shown by NET's letters to Associated Music Publishers of January 14 and August 22, 1966. Indeed, by August, 1966, the licensing procedure had become so routine that NET could say "As usual, would you sign a copy of this license and return it to my attention." Public broadcasting has also claimed that there would be great clearance difficulties because of the many local programs produced by individual stations, especially instructional programs designed for school use. But, as we have seen, virtually all programs broadcast during school hours on public broadcasting stations are national programs, such as "Sesame Street". Indeed, under the copyright owners' present proposal to public broadcasting, synchronization licenses would be granted for both national and local programs. In sum, the clearance problems are illusory, not real, and provide no justification for a compulsory license. B. LICENSE FEES OFFERED TO PUBLIC BROADCASTING HAVE ALWAYS BEEN REASONABLE Chalmers H. Marquis, Executive Director of Educational Television Stations, a division of the National Association of Educational Broadcasters, estimated that the costs of copyright licenses would run at least $12,600 per year for each educational television station (1967 Senate Hearings, at 1008). We have no idea how this figure was arrived at, or how much of this guess relates to music. If we assume half this amount is for music and multiply by the 250 educational television stations broadcasting today, we would arrive at fees of approximately $1,500,000 annually. If all of the cost were for music, that figure becomes $3 million. Mr. Marquis' estimate should be compared with license fees paid by public broadcasters in other countries of the world. Representative figures paid for rights to musical compositions in 1974 are: Britain: $7,870,272 (3,279,280 pounds). Austria: $4,176,000 (69,247,584 shilling). Switzerland: $1,666,190 (6,638,212 Swiss francs). Canada: $1,500,000 (Canadian dollars). Sweden: $2,694.585 (10,567,000 kroner). France: $7,909,379 (32,717,520 French francs). Of course, the situation in those countries may be different from ours, and neither we nor the public broadcasters have bargained on the basis of a full exploration of the economic facts. America's copyright proprietors have offered public broadcasting experimental licenses at rates far below the levels paid abroad. C. A COMPULSORY LICENSE CANNOT BE JUSTIFIED BY ANY CLAIMED DIFFERENCES BETWEEN PUBLIC AND COMMERCIAL BROADCASTING Public broadcasting has continued, in 1975, to try to distinguish its needs from those of commercial broadcasting. It still says (PBS Comments at p. 15): "The special factors present in public broadcasting indicate generally the critical need for copyright consideration beyond the non-statutory clearance practices previously developed in commercial broadcasting. Suffice it to say in summary that the programmatic aim and content are far different, the extent and volume of copyright clearance far greater, and the financial and administrative resources far smaller. But more than that, it should not be forgotten that the commercial broadcasters, both local stations and national networks, are almost continually in negotiation with the three musical performance rights societies about royalty rates, and that the attendant litigation in court has been voluminous indeed." This statement is remarkable for being incorrect in each particular. First, public broadcasting's programming now includes entertainment in direct competition with programming of commercial broadcasters. The days of heavily instructional "educational" television are over, and public broadcasting now more closely resembles commercial broadcasting. Second, even if the allegation that the extent and volume of public broadcasting's copyright clearance is far greater than that of commercial broadcasting is correct, the license agreements offered by the copyright owners satisfy any "problems" with clearance. The licenses, in fact, would not require advance clearance of any nondramatic musical compositions. Third, public broadcasting's claim that its financial and administrative resources are far smaller than those of commercial broadcasting is dispelled by the significant growth of public broadcasting revenues over the last decade. Further, copyright owners have always recognized and respected public broadcasting's special financial situation, and have offered initial licenses at extremely low fees. Finally, the claim that there is almost continual negotiation and litigation between commercial broadcasters and the performance rights organizations is not true. If true, it would not affect the public broadcaster because, under the auspices of the Senate Subcommittee, the copyright owners have offered a onepackage agreement to public broadcasting as a result of a single negotiation. The fact is that the performing rights societies and the individual publishers who license synchronization rights have always been willing to enter into license arrangements with public broadcasting which would grant all the rights needed. None of the difficulties envisioned by public broadcasting has ever occurred in any other area of licensing, and there is no reason to think that any of those difficulties would occur in the licensing of public broadcasting. Quite the contrary, the history of licensing of performance and synchronization rights demonstrates that there is no necessity for the Mathias Amendment. VI. The Mathias Amendment as drafted is ambiguous, impractical, and unworkable. There are also great technical difficulties with the Mathias Amendment as drafted. Public broadcasting has claimed the Amendment covers only nondramatic uses. It begins "(a) Public broadcast of nondramatic literary and musical works, sound recordings, and pictorial, graphic, and sculptural works shall be subject to compulsory licensing. . . ." It is possible that this language might be read to apply a compulsory license for all "public broadcast" uses. This would include use of a nondramatic work in a dramatic context-a use that has always been licensed by the individual copyright proprietor. In addition, section (a) (2) of the Amendment states that the "royalty rates may be calculated on a per-use, per-program, pro rated or annual basis as the Copyright Royalty Tribunal finds most appropriate. . . ." Since 1941 ASCAP has offered broadcasters licenses on a blanket or per program basis. Calculation of fees for public broadcasting on some new basis could be perilous for all concerned. |