This new recording privilege, which is not provided in the present Copyright Act, vastly enlarges the audiences for these broadcasts of the author's work. And it encourages more, and increasingly substantial, uses. The more recordings permitted, and the longer the period of their use, the greater the damage to the author and publisher of the work. The Revision Bill drawn by the House Judiciary Committee permitted only one recording of a program to be made for transmission purposes, for one year; it permitted another copy to be kept only for archival purposes. These limitations reflected a concensus of opinion developed at the hearings and in discussions between authors, publishers and broadcasters that if instructional broadcasters wanted to reach audiences greater than those sizeable ones permitted by the new provisions, they should make some payment to the author and publisher of the copyrighted work they wished to broadcast. These limitations were removed by a floor-amendment which was adopted without debate, and without any opportunity for authors and publishers to explain to 500 Representatives who had no knowledge of the subject why the limitations on the new recording privilege were necessary and fair. The Senate Judiciary Committee has been far more generous to educational broadcasters than was the House Committee. The Senate Bill initially allowed, in Sec. 112(b), the making of 12 recordings of a program, for use over a five year period. We think this went too far; but we did not object, hoping that accommodation would help produce a viable new Copyright law. In its recent mark-up of the Bill, the Judiciary Committee expanded the recording privilege to 30 copies, and a seven year period of use. We submit this was completely unwarranted. But Amendment No. 1831 cannot be justified by any standard of equity. If an instructional program producer or broadcaster wants to reach audiences even greater than those permitted by the 30-copy limit, he should pay the author who provides the primary ingredient for the program-the literary work which is being transmitted. Certainly the author has as much right to be compensated as do the teachers, actors, directors, technicians and production officials who are paid for their services in recording and broadcasting the author's work. The Authors League urges that Amendment No. 1831 be rejected. (ii) The Amendment Inadvertently May Expand The Scope of the Privilege Granted in Sec. 110 Section 112 only intended to allow the use of recordings for transmissions which are permitted under Section 110-i.e. the broadcast of instructional programs for reception in classrooms, or by disabled persons or government employees. However, the last sentence of the Amendment allows the distribution of copies for transmissions by or through other governmental bodies or nonprofit organizations, without providing that such transmissions may only be made for the purposes specified in Sec. 110. This sentence might be read to permit a vastly broader uncompensated use of copyrighted material than the draftsmen of Sections 110 and 112 ever intended. It is clear from the text of the Bill and the Committee report that the recordings made under 112(b) should only be used for the types of transmissions stipulated in Section 110. The Amendment could frustrate that intention. The Authors League urges that this should not be permitted. The Authors League urges that the Amendment be rejected by the Judiciary Committee. Respectfully yours, IRWIN KARP, Counsel. STATEMENT OF Broadcast MUSIC, INC. I am Edward M. Cramer, President of Broadcast Music, Inc. It seems clear that any proposed legislation should be subjected to one basic question: What problem or problems is this law designed to correct? Measured against this yardstick, the answer concerning the proposal before us, the so-called Mathias amendment, is: none. Public broadcasters have expressed their support of this proposal based upon the undefined possibility that they might undergo difficulties in obtaining the right to use music over public broadcasting stations and encounter obstacles in securing synchronization rights. ! Since its founding in 1940, BMI has dealt with all classes of music users and come to good, workable agreements with all of them. It is not BMI's role to create problems for any potential user of the music we license. It is our role to facilitate the use of our repertory and to protect the interests of our affiliated writers and publishers. Based upon past performance, there is no reason to believe that discussions and negotiations with public broadcasters would be conducted any differently. But the fact is that representatives of public broadcasting have refused repeatedly to have meaningful discussions on the subject with BMI. For your consideration, I have attached copies of letters addressed to Mr. Henry Loomis, President of the Corporation for Public Broadcasting, written in March and May of 1974, in which I requested meetings with representatives of CPB to explore the terms for a licensing agreement. To date, I have not received the courtesy of a reply. It is ironic that during the same period I was unsuccessfully trying to talk with CPB and public broadcasting officials, I was able to meet with representatives of the Soviet Union in New York and in Moscow. In these meetings we were able to take meaningful steps toward arrangements for the compensation of American music when it is played on stations in the U.S.S.R. Any question about the ability of public broadcasting and the music licensing organizations to arrive at an understanding was eliminated as a result of recent negotiations held under the auspices of the Senate Subcommittee starting in mid-April of this year. These negotiations showed that there are no real problems in obtaining the rights to use music; there are no real problems in the mechanics of payment to writers and publishers. The sole problem, as far as BMI is concerned, is reasonable payment for the use of music. The reason no agreement has been reached is that public broadcasters have failed to make a proposal of payment that BMI, as the proprietor of works of over 30,000 American composers and 10,000 publishers, as well as tens of thousands of foreign authors and publishers, can accept in good conscience for the people we represent. Rather than hard negotiation and a frank discussion of the value of music to public broadcasting and of fair compensation to creators for the use of their property, public broadcasting has chosen a different track-special legislation. In essence, the public broadcasters make the proposal that all music suppliers receive a total of $300,000 a year for the first two years, with small increases thereafter. Specifically, BMI and its chief competitor, ASCAP, would each receive approximately $90,000 a year to begin with. Another $90,000 would go to the publishers for synchronization rights, and $30,000 to SESAC. For the use of the BMI repertory-roughly 1,000,000 works-this comes to less than $1 per station per day. It should be noted here that BMI music is the most widely performed over commercial broadcasting systems. Too, I believe that the music licensed by BMI is performed as much or more than any other music used without compensation over the public broadcasting stations. A fair question might be this: If BMI has received nothing for its music in the past, is not $90,000 a year a marked improvement? The answer is no, for even with this new income BMI would continue in the position of the shopkeeper who loses money on every sale but justifies his continuing in business in the hope of making up the difference in volume. Let me explain. Under the proposal, BMI, in order to pay its affiliated writers and publishers, will have to determine what music is played (a) on the networks, (b) on some 200 TV stations and (c) on approximately 155 radio stations. In addition, records will have to be kept to assist the Harry Fox office in making payments to its publisher clients. Estimating conservatively, I would think that the cost of distributing the $90.000 will exceed half that amount. Another factor: because of the heavy use of music from abroad (basically, the material that comes to us from England: the Monty Python Show, A Family at War, Upstairs/Downstairs, etc., and other foreign films and shows that are seen on public TV outlets) BMI will have the obligation to pay the foreign licensing societies with which we have agreements. If you subtract the monies payable to these foreign authors and publishers, there will be little or nothing left for American creators and publishers. Under the circumstances, BMI will be forced to continue to subsidize the payment for performances over public broadcasting facilities. It should be stressed that this subsidy would come from the pockets of the other publishers and writers whose works we represent. 57-786-76-pt. 2-19 Could this proposed legislation have an effect on our relations with other countries? I think the answer is yes, and I would like to clarify the point. BMI has reciprocal agreements with authoral societies in 34 countries. Payment is made to American writers and publishers when their works are performed over public broadcasting outlets, except in the U.S.S.R. and, as noted, I have reason to believe that this will soon change so that even there, Americans will be paid for performances on the state facilities. There is a favorable balance of trade for the U.S. of about $8 million or $9 million per year. The failure of our licensing colleagues abroad to receive payment in several areas, including public broadcasting, has been a continuing source of embarrassment to us. In the past we were able to say that the situation will be changed when the copyright law is revised. The public broadcasting proposal is virtually meaningless and will result in little income to any foreign supplier of music. It could, indeed, have a serious adverse effect. Some of these countries could very well carry out their threat to cut back payments to Americans for performances. As mentioned, BMI and its colleagues from other countries of the world are on our way to an agreement with the Russians whereby they will pay for performances on their state facilities. Both BMI and these licensing societies would be shocked if the Russians simply offered to pay an amount equal to that which Americans pay for public broadcasting performances. History shows that there are no obstacles to the successful conclusion of an agreement between the public broadcasters and the music licensers. The sole problem is how much public broadcasting is prepared to pay for the music it uses so lavishly. Public broadcasters have no difficulties in negotiating with a wide spectrum of suppliers of goods and services. When compelled to do so, these broadcasters have worked out agreements with the musicians union, various craft unions, employees, landlords, AT&T and others. Yet, given this history of negotiation, public broadcasting petitions Congress for special legislation because it might be unable to deal with the suppliers of music. While negotiations with others have involved vast amounts, a settlement with music suppliers would involve comparatively small outlay. The plain fact is that public broadcasters have not been able to come to an agreement with those who supply music because they have never tried to do so. So they want to fall back upon a compulsory arbitration mechanism to allow themselves the luxury of avoiding negotiation. There is no need for me to comment on the elaborate machinery set up by way of the Copyright Royalty Tribunal because the simple answer is that such a body, with its heavy attendant administrative costs, is not necessary to handle this issue. In closing, I note that as a taxpayer I am embarrassed to have to come before this body to argue whether an offer of $90,000 a year is adequate compensation for the music BMI represents. The expenses incurred by all, not to speak of the time and energy expended, has far exceeded this amount even in the past few weeks. It is obvious that what is needed is not more, but less legislation. If the parties, for whatever reason, are unable to arrive at an understanding, the resort to legislation, a petition to Congress, is always a possibility. Until the parties involved make every attempt to solve this problem in negotiation, I submit there is no justification for legislation. Before concluding my remarks, I note that the Subcommittee will also consider today the so-called Bayh amendment. Because of the limits of time allotment, I will not elaborate on our opposition to this amendment, but, instead. will submit, with the Subcommittee's permission, our written statement for the record. Thank you for allowing me the opportunity to express our views on these matters. Mr. HENRY LOOMIS, President, Corporation for Public Broadcasting, BROADCAST MUSIC, INC.. New York, N.Y., March 7, 1974. DEAR MR. LOOMIS: As you may know, Broadcast Music, Inc. (BMI) is the largest musical performing rights organization in the world. Most of the music heard on radio and television in the U.S. today is licensed by BMI. Sixteen of our affiliated composers who write primarily contemporary concert music are Pulitzer Prize winners. As recently as about a year ago, representives of BMI met with representatives of CPB and PBS to discuss a license agreement. There had been a number of meetings prior thereto. We were to receive word from representatives of CPB concerning a future meeting date when a definitive proposal was to be made. In the intervening period, we heard nothing until about four weeks ago when I learned that CPB had made an arrangement with our competition. We still have not heard directly from CPB. I must say that I am somewhat puzzled over the position taken by CPB in its apparent attempt to ignore BMI, which is the major supplier of music now on the air. When I learned of the agreement with our competitor, I tried to reach Keith Fisher. I called at least three times and left messages, which included my identification. I have not received a return call from Mr. Fisher. I'm sure you will agree that it is in the public interest that composers whose works are used on public broadcasting receive compensation like all others whose works are used. I look forward to hearing from you so that we can arrange for representatives of our organizations to meet and discuss the terms of a license agreement. Very truly yours, Mr. HENRY LOOMIS, President, Corporation for Public Broadcasting, EDWARD M. CRAMER. BROADCAST MUSIC, INC., New York, N.Y., May 16, 1974. DEAR MR. LOOMIS: On March 7, 1974, I wrote to you. A copy of the letter is attached. The sentiments expressed in that letter are the same as they were then, except that we now have seventeen Pulitzer Prize winners affiliated with us. I am sure that you are aware of the fact that absolutely nothing has happened in the intervening period. I did receive one phone call from a representative of CPB. I made several attempts to reach him, without success. I cannot understand the position of your organization in refusing to discuss a matter of this importance with us. We represent 30,000 American writers and composers; nearly 10,000 publishers; and tens of thousands of writers and composers from abroad. I do not take the failure to respond as a personal affront; rather, it is an insult to those people whom we represent. This week I have had meetings with representatives of the Soviet Government, at their request, looking forward to reciprocal arrangements which would include the compensation of American composers whose works are performed over Soviet broadcasting facilities. It is indeed strange that I can discuss payments for American composers on Soviet public broadcasting, and find that I am unable to locate anyone in a responsible position with the CPB who is prepared to discuss similar problems. Please let me know if discussions are out of the question, because if this is the case, then we will have to take our case to another forum. Very truly yours, EDWARD M. CRAMER. STATEMENT OF BROADCAST MUSIC, INC. Broadcast Music, Inc. (BMI) is the largest of the U.S. performing rights licensing organizations. Most of the music performed by broadcasting stations is licensed by BMI. As the representative for over 40,000 writers and publishers from every state in the Union, BMI must stand opposed to the so-called Bayh amendment for reasons outlined below. Although we recognize that the thrust of such amendment is principally applicable to a nonmusic context, we are against any proposal which tends to weaken the rights of copyright owners and which stifles or penalizes their creativity. If Congress is disposed to allow photocopying by educational or other nonprofit organizations, we submit that the 30-copy and 7-year rules (which we feel are very generous concessions by Congress to the educational and scientific sectors) are better than the unlimited approach proposed by Senator Bayh. Such rules should adequately serve any legitimate educational or scientific needs, whereas a no-limit rule would cause unnecessary financial hardship to authors and publishers. Users of copyrighted works have the right of "fair use". However, unlimited photocopying without reasonable compensation is not “fair use”, it is expropriation. The above is in summary form and we would be pleased to submit, in writing or at a hearing, any additional comments or information which the subcommittee may desire. We, of course, would like to reserve our right to comment further as the legislative process on copyright matters unfolds in the 94th Congress. Thank you again for giving us the opportunity to present our comments. Respectfully, BROADCAST MUSIC, INC., EDWARD M. CRAMER, President. [Subsequent to the hearing the following correspondence was received for the record:] BROADCAST MUSIC INC., Hon. ROBERT W. KASTENMEIER, DEAR CHAIRman KastenMEIER: BMI would like to comment on the background statement filed with the Subcommittee on Courts, Civil Liberties and the Administration of Justice by the Association of Public Radio Stations. Inasmuch as the document was prepared prior to the July 10th hearing before the Subcommittee it is understandable, but regrettable, that it contains a number of assumptions which run counter to fact. There is no problem of the clearance of musical works for use in nationally distributed programs, or, indeed, for use in local programs. The fact is that APRS can, as commercial stations have been doing for decades, obtain immediate blanket clearance of copyrighted music through easily negotiated licenses with the performing rights licensing organizations. The fact is that APRS will need no added personnel to perform a clearance function, for such a function will not exist. There is no intention on BMI's part to charge such exorbitant fees as are cited by APRS. The fact is that BMI's lowest rate for commercial broadcasters is $18 a month, a far cry from the APRS bogey of $15,000 to $20,000 annually. BMI has already told representatives of Public Broadcasting that we are ready to discuss an equitable rate. Toward the establishment of such a rate we have asked for data concerning rates charged by the owners of other rights equally necessary to programing. There is no serious problem of administrative burden placed on APRS after the negotiation of a BMI contract. At most we would require, as we do of other broadcasting licensees, a log of the music played for one week each year. Many stations already make this sort of information available to their listeners on a regular basis. This has been provided us by commercial stations with personnel even lesser in number than the average eight full-time employee programming staff APRS cites. The fact is that such an obligation is thoroughly in keeping with APRS' stated and laudable "obligation to the composer of our time." Fulfilling this simple responsibility will assure that these composers of our time receive money for the public performance of their music on public radio. Public Radio does, indeed, “make potential record buyers aware" of contemporary music. But this can also be a dubious blessing. The potential average sale of contemporary recorded concert music is about 2,500 copies. When APRS, "one of the few outlets for the work of young contemporary composers," schedules such music, tape recorders and cassettes whirl. That performance is bootlegged for personal use, generally reducing sales. The payment by APRS for a license from BMI will certainly not end this reprehensible practice, but it will slightly alleviate an economic wrong. We can only repeat the points we made on July 10th at the hearing before the Subcommittee: Public broadcasting will have no difficulty in negotiating a contract. Public broadcasting will have no serious administrative problems arising from reporting one week's music programing a year. The sole problem is how much public broadcasting is prepared to pay for the music it uses so lavishly. Respectfully, EDWARD W. CHAPIN, Counsel. |