7. 8. (iii) "The Legal Status of Home Audio Recording of Copyrighted Works," by Professor Melville B. Nimmer Letter from J. Kamei, Executive Director, Japan AUDIO HOME TAPING: THE CASE FOR A FAIR DEAL FOR SUMMARY OF POSITION The Recording Industry Association of America (RIAA) joins the entire musical arts community including 1,300 companies and more than 2 million individuals who have formed a Coalition to SAVE AMERICA'S MUSIC1/ in supporting prompt passage of the MathiasEdwards "home taping" legislation (Amendment No. 1333 to S. 1758 and H.R. 5705). That legislation would establish a fair mechanism for compensating copyright owners whose creative properties are being appropriated at massive levels through home taping. It would, at the same time, relieve home tapers of copyrighted audio and video works from liability for copyright infringement. This is a fair compromise of the interests at issue in the home taping controversy. It would provide compensation to creative artists for their works, protect the consumer, and avert the economic havoc that home taping promises to visit on the entire music industry. 1/ See Appendix One for a list of the Coalition's membership. 2 The Extent of Home Taping Recent advances in audio taping technology and the increased availability of inexpensive, easy-to operate, high quality recording devices have led to an explosion of home audio taping. A new study by Warner Communications Inc. (WCI) reveals, for example, that in 1980 home tapers copied recordings with an estimated market value of $2.85 billion the equivalent of 455 million albums. In 1981, by comparison, the recording industry sold the equivalent of only 475 million albums. Taping, in short, is taking over. And as a number of studies have revealed, the problem is getting worse, with most blank tape buyers reporting that they are taping more than ever before. The Injury Caused by Home Taping Home taping injures the recording industry and the entire musical arts community because it displaces sales of pre-recorded discs and tapes. The WCI Survey found that people tape primarily to avoid buying records, and that tapers make most of their copies from records which they do not own. In this way, home taping undermines the value of the copyrights in sound recordings and musical compositions. - 3 The actual amount being lost as a direct result of home taping has risen to alarming levels. The Wal1 Street Journal recently estimated the annual loss to the recording industry at $1 billion. (February 18, 1982, p. 31.) Dr. Alan Greenspan, who has just completed an in-depth economic study of the issue, has estimated that in 1981 home audio taping displaced sales of records and pre-recorded tapes with a value of approximately $900 million. And, a 1979 CBS study estimated the loss of revenues from home audio taping in that year at $700 to $800 million. At stake is the economic well-being of one of the few American industries that has a positive influence on the Nation's balance of payments. But home taping affects more than just record companies. Its devastating impact is felt by the musicians and vocalists from Nashville to Muscle Shoals who want to be recorded, the music publishers and songwriters from all parts of the United States who want outlets for their work, and the retailers, distributors, suppliers and manufacturers in virtually every community in the Nation who depend on the industry's vitality for their livelihoods. The Public Interests at Issue The public has a major stake as well. Since the adoption of the Constitution, our copyright system has been premised on the concept that the payment of royalties for the use of creative products is both a reward for the creator's labor and an incentive to future creativity. Widespread home taping makes a mockery of that principle. It is only from the sale of prerecorded discs and tapes that record-makers are compensated. In displacing those sales, home taping deprives creators of their fair rewards and diminishes their incentive to invest time, effort and money in the high-risk recording industry. Home taping also lessens the ability of record companies to develop and promote new talent and to subsidize special musical forms, such as classical, jazz, ethnic and gospel. The recording business is exceedingly risky; more than 80 percent of the records released fail even to recover their costs. Record companies rely on the revenues from the occasional hit to subsidize the losers, to finance recordings by unknown artists and new songwriters, and, hopefully, to make a profit. Home taping siphons off those revenues and, in so doing, undermines a principal objective of the |