The overwhelming majority of these creative, highly skilled performers are unknown to the general public and do not even enjoy a moderate income from their professions. They are the nameless musicians that comprise America's symphony orchestras; they are the faceless voices that accompany the well known stars; they are the instrumentalists who make possible the special sounds that make American popular music so popular around the world. They pursue occupations as singers, musicians and actors that are among the lowest paid and most highly unemployed in our country. The Congress has recognized this fact and has devised grant programs to aid people in these arts occupations. In light of this, it is difficult to understand why the Congress would want to continue protecting the multi-billion dollar broadcast industry from the necessity of paying these people for the profitable use of their work. H.R. 2223, as it now stands, would protect the writer from those who would exploit his published work; it would protect the composer in a similar manner. It would insure that the broadcasters receive payment from cable operators whoconvert over-the-air broadcasts to their own use and profit. It would protect the publisher from the indiscriminant photocopying or Xeroxing of publications. But it would do nothing to provide America's performers with the right to collect even the smallest amount of remuneration from the exploitation of their recorded performances. This Council considers this to be a fatal omission and, unless corrected, a serious subversion of the quest for true copyright reform. Along with the AFL-CIO we have urged your Committee to correct this oversight. Unless appropriate recognition is accorded the artists who create sound recordings by inclusion of a performance royalty, this Council cannot, in good conscience, support H.R. 2223. Nearly every major country of the western world recognizes the creativity inherent in a performance and the need to provide performing artists with some compensation for the commercial use of their recorded performances. It is time the U.S. brought its laws up to date and in step with the rest of the modern world. We are aware, of course, that some have expressed concern that broadcaster opposition to payment of performance royalties might slow passage of copyright revision legislation. Some legislators have even expressed fear of broadcaster retribution. These fears should be viewed in perspective. The broadcasters have a variety of other legislative objectives in this Congress and in the copyright legislation before you. Indeed, they rightfully are seeking royalty payments to themselves when their programs are picked up and retransmitted for profit by cable operators. H.R. 2223 grants them such a royalty. We respectfully suggest that if royalties are to be paid to broadcasters by cable operators under such conditions then they should also be paid by the broadcasters when they "pick up" and exploit recorded programs created by recording companies and artists not employed by the broadcaster. The principle is the same. Those who use another's creative work for profit should help sustain and encourage the creator by payment of some remuneration. At present, the American recording industry and the many fine artists it employs are supported by the average purchaser of records from the local record store. The massive broadcasting jukebox and background music industries contribute almost nothing to sustain and encourage this creative source. This, we contend, is unjust to the artists and forces an unfair burden on the record con sumer. Fortunately, H.R. 5345, authored by Representative Danielson and co-sponsored by 20 other members of the House, offers the desired copyright protection and encouragement for the performer. We suggest that the provisions of this bill be made a part of any legislation that would seek to qualify as a serious modernization and reform of our copyright laws. The principles embodied in these provisions are endorsed by the National Endowment for the Arts, the AFL-CIO, the Recording Industry Association of America, the Section on Patent, Trademark and Copyright Law of the American Bar Association, the U.S. Register of Copyrights, the Associated Councils of the Arts, which comprises the various state and local arts councils, and numerous artists and authorities on America's performing arts. We respectfully urge that you use your good offices to insure that the needs of America's performing arts and artists are given their rightful place in any revision of the nation's law governing copyright that your committee may propose. We look forward to learning your views on this most serious matter. JACK GOLODNER, Executive Secretary. P.S.-The enclosures should answer any questions concerning performance royalty and this Council. If not, we would be happy to respond to any queries from your office. LIST OF OFFICERS J. G. COUNCIL OF AFL-CIO UNIONS FOR PROFESSIONAL EMPLOYEES President: Albert Shanker, President, American Federation of Teachers. General vice president: Hal C. Davis, President, American Federation of Musicians. Treasurer: Rodney Bower, President, International Federation of Professional and Technical Engineers. AFFILIATES OF THE COUNCIL OF AFL-CIO UNIONS FOR PROFESSIONAL EMPLOYEES Actors Equity Association. American Federation of Musicians. American Federation of Teachers. American Federation of Television and Radio Artists. American Guild of Musical Artists. Brotherhood of Railway, Airline and Steamship Clerks. Communications Workers of America. Insurance Workers International Union. International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators. International Brotherhood of Electrical Workers. International Federation of Professional and Technical Engineers. International Union of Electrical, Radio and Machine Workers. International Union of Operating Engineers. National Association of Broadcast Employees and Technicians. Oil, Chemical and Atomic Workers International Union. Office and Professional Employees International Union. Seafarers International Union. Service Employees International Union. PERFORMANCE ROYALTY LEGISLATION Not many years ago, radio stations and the radio networks were excellent sources of employment for America's performing artists. Networks had their own orchestras. Local stations gave local talent job opportunities. Today, the networks and the stations use recorded music instead of live musicians and singers. On the average, 75% of all commercial radio programming is devoted to recorded music. Every time a recording is played over the air, the composer and the publisher of the music get paid because present copyright law requires that the users of their work pay a performance royalty. Unfortunately, the artists who bring the composer's music to life and add their individual interpretation that often makes the difference between a "hit" and a "flop", get no such royalty. Nor does the recording company which, like the publisher of a book, produces and manufactures the work. Like the composers and the publishers, these artists and producers can only receive such royalties if copyright law provides for it. For this reason legislation has been introduced in this Congress that would require those who use sound recordings for their profit to compensate performers and record companies by the payment of royalties. Half of the royalties would go to the performing artists and half to the recording companies. All of the performers would share in their half equally so that the mass of recording artists who are largely unknown instrumentalists and accompanying vocalists will receive meaningful compensation. The performance royalty principle embodied in this legislation is strongly supported by the National Endowment for the Arts, the U.S. Register of Copyright, the AFL-CIO, the Recording Industry Association of America, the American Federation of Musicians, the American Federation of Television and Radio Artists, Actors Equity Association, the Associated Councils of the Arts (which comprises the State and community arts councils), the Section on Patent, Trademark and Copyright Law of the American Bar Association and the Council of AFL-CIO Unions for Professional Employees. Senator Hugh Scott, a primary sponsor of this legislation in the Senate, summed up the raison d'etre for the measure when he said, "The real issue to me is whether or not a person who uses his creative talents to produce music should be entitled to compensation from someone who takes the music and makes a profit from it". Supporters of this legislation believe it is unfair that an individual orga nization or industry can lawfully take the creative work of others and without compensating them, exploit that work for their own gain. Artists and recording companies make records for the enjoyment of the general public-not to make profits or commercial broadcasters. But, under present law, it is the average citizen who purchases a record from the store who supports the many artists and recording companies that provide us with the bulk of our music. The broadca sters and others contribute relatively little. The broadcasters allege that they do contribute by popularizing particular recordings. But who is to say whether the use of recordings by Elton John or the Boston Symphony is benefitting the artists' popularity or that of the broadcast station? It is a common practice of many stations to ascertain from local stores what records are selling well and then play them in order to attract more listeners. Obviously, their purpose is not to popularize a record or an artist but rather to ride the coattails of already popular recordings in hopes that their use will improve the stations' audience and justify high advertising rates. It is now possible for people to tape recorded music off the air. As this prac tice becomes more prevalent, the use of recordings by broadcasters could actually curtail record sales. The myth that broadcasters are assisting America's artists and record companies is just that-a myth. There are other fantasies being conjured by opponents of performance royalty legislation. Primarily, they relate to the constitutionality of the proposed legislation and its economic impact on the broadcast industry. We think the following dispels these myths: I. There Can Be No "Constitutional Doubt" That the Production of a Sound Recording Is a Creative Activity Deserving of Copyright Protection. 1. Copyright Protection Covers Wide Variety of Creative or Intellectual Efforts.-Copyright protection has never been limited to the "Writings" of "Authors" in the literal words of the Constitution. To the contrary, Congress has granted a copyright to a wide variety of works embodying creative or intellectual effort, including such "Writings" as musical compositions, maps, works of art, drawings or plastic works of a scientific or technical character, photographs, motion pictures, printed and pictorial illustrations, merchandise labels, and so on. 2. Constitutionality of Copyright for Sound Recordings Upheld.-Both Congress and the Courts have recognized that sound recordings may be granted copyright protection under the Constitution. In the Anti-piracy Act of 1971, where Congress conferred limited copyright protection upon sound recordings, the Senate Judiciary Committee concluded that "sound recordings are clearly within the scope of 'writings of an author' capable of protection under the Constitution.” S. Rep. No. 92-72, 92d Cong., 1st Sess., pp. 4-5. The Committee rejected the constitutional objection once again only last year. S. Rep. No. 93-983, 93d Cong., 2d Sess., pp. 139-40. The Courts have expressly upheld the constitutionality of legislation according copyright protection to sound recordings. In Capitol Records, Inv. v. Mercury Records Corp., 221 F.2d 656, 657 (2d Cir. 1955), the Court said that "there can be no doubt that, under the Constitution, Congress could give to one who performs a . musical composition the exclusive right to make and vend phonograph records of that rendition." In Shaab v. Kliendienst, 345 F. Supp. 589, 590 (D.D.C. 1972), a three-judge federal Court likewise concluded that the activities of sound recording firms "satisfy the requirements of authorship found in the copyright clause...." The United States Supreme Court, too, has indicated that the copyright clause can extend to "recordings of artistic performances." Goldstein v. California, 412 U.S. 546, 562 (1973). Finally, the Copyright Office has advised that it is within Congress' constitutional power to grant copyright protection to sound recordings. 3. Creativity in Production of Sound Recording.-Performers and record companies engage in creative activity when they use their artistic skills, talents, instruments and engineering to produce and record a unique arrangement and performance of a musical composition. The Senate Judiciary Committee has found creative copyrightable elements in the "performer whose performance is captured and . . . the record producer responsible for setting up the recording session and electronically processing the sound and compiling and editing them to make the final sound recording." S. Rep. No. 92–72, 92d Cong., 1st Sess., pp. 4-5. II. Equitable and Economic Factors Overwhelmingly “Support a Performance Right for Sound Recordings. 1. Sound Recordings Account for Three-Fourths of Radio Programming.-The basic staple of radio programming is recorded music. The Senate Judiciary Committee has determined that 75 percent of commercially available time is used to play sound recordings. Thus, recorded music accounts for roughly threequarters of stations' advertising revenues-or about $900 million annually. Yet broadcasters-who must pay for all their other types of programming-pay nothing to performers or record companies for the prime programming material they use to secure their audiences, revenues and equity values. 2. Recordings Have Replaced "Live" Performances.-Broadcasters used to pay for "live" performers, but these artists have actually been replaced by their own recordings. It is inequitable for these recorded performances to be broadcast for profit without any payment being made to the performers. 3. Composers and Publishers Receive Performance Royalties.-Under the existing Copyright Law, broadcasters pay the composer and publisher of the song that is played over the air in a sound recording. But the performers and record company whose artistry and skill brought that composition to life in a recorded performance, and whose creative contribution is at least equal to, if not greater than, that of the composer, are paid nothing. 4. No "Free Ride" for Record Companies.-The record companies do not get a "free ride" from broadcasters. Record companies purchase over $32 million of advertising time from radio stations annually-about three times the total projected performance royalties under the bill. Further, almost two-thirds of the records played are "oldies" that enjoy few current sales, if any. Record companies and performers derive little benefit from such airplay, but these recorded performances draw massive listening audiences for broadcasters and, in turn, advertising revenues for the stations. 5. Broadcasting Industry Very Profitable.-The broadcasting industry is exceedingly healthy. Between 1967 and 1973 (the last year for which data are available), the pre-tax profits of radio stations rose 39 percent, and advertising revenues rose 61 percent.1 6. Royalty Fees Are Very Modest.-The proposed performance royalty fee is not burdensome. About one-third of the nation's radio stations would pay 68¢ per day. Another third would pay $2.05 per day. The remaining third of the stations-large stations with more than $200,000 in annual advertising revenues -would make a modest payment of one percent of net advertising revenues. Thus, even a station earning revenues of $1 million annually would pay only $27.40 daily. or $1.14 per hour to compensate the performers, musicians and record companies for the exploitation of their creative efforts. Clearly, the performance royalties are fair and reasonable, particularly in light of the immense advertising revenues that recorded music produces. Further, all-news stations or others which do not rely heavily on recorded music would pay only a pro rata share of the performance royalty percentage. 1 See attached article from Broadcasting Magazine for more recent data. 7. Performance Royalty Consistent with Cable TV Royalties. The principle underlying the bill is identical to that supported by the broadcasters in the general revision bill. Broadcasters assert that cable systems should be required to pay the broadcaster and copyright owners when cable TV picks up the broad. casters' over-the-air signal. In directly parallel fashion, broadcasters should be required to pay the creators of sound recordings when broadcasters use that programming material for their profit. 8. Performance Royalty Recognized Abroad.—The principle of the bill is not at all radical. Almost all other Western nations require the payment of performance royalties to performers and recording companies. Some of these foreign payments are currently denied to U.S. artists and companies because our country offers no reciprocal right. The primary reason that the principle has not been established here is that the last revision of the copyright laws took place in 1909, long before sound recordings became a significant source of programming material for commercial exploitation by broadcasters and others. [From Broadcasting, Sept. 1, 1975.] RADIO 1975: BIGGEST YEAR IN THE MAKING National radio business has taken off this year as in no other of recent memory. The radio networks are virtually sold out in key day parts and seem certain to make this their best sales year in more than two decades-collectively almost for sure, and in some cases individually. National spot radio is more erratic but according to most accounts is running ahead of last year's pace by at least two or three percentage points and perhaps by several-either way, by enough to make a record. The status of local business is less clear. In some markets it's ahead of 1974 levels and in some it's behind, depending on several factors including the aggressiveness of local sales staffs and the extent of the recession's local impact. Generally, observers tend to think 1975 local sales will rise in total-which would mean another new record there, too-but that the old pattern of almost automatic annual 6%-8% increases will not hold up in some markets. Network business, where much of the excitement used to be in pretelevision days, has of course dwindled to small potatoes by comparison with national spot and local. In 1973, the latest year for which FCC figures are available for all three components, network billings totaled $59.4 million, national spot came to $382.8 million and local reached $1.2 billion. But although network is now the smallest component of radio business, lately it has become the liveliest. "Super," one network head said last week. "Unbelievable," said another. Both were talking about sales this year. Some talked of being almost sold out for long periods of the day. Others, though obviously elated avoided the “sold-out” term as a matter of principle-or of superstition: As one put it, "There's always a spot at 2 o'clock in the morning-or some timethat you can sell to someone out there." The best estimates available suggest that for the first seven months of 1975 national network sales in total-for ABC Radio's four networks and the CBS, Mutual and NBC Radio networks-exceeded the comparable 1974 periods by somewhere between 20% and 30%. Looking at it another way, C. Edward Little, president of Mutual, estimated that if total network billings merely match 1974 monthly totals for the rest of 1975, the year will still come out 12%-15% ahead of last year. Nobody apparently expects the rest of 1975 to fall back and merely keep stride with the last half of 1974. Even if it did, authorities figure network radio would still have its best year since 1972, one of the best network radio years in recent history. And if gains maintain anything approaching the 20%30% upside rate of the first seven months, 1975 should be network radio's best since 1954, when FCC put network billings at $78.9 million. That, incidentally, is more than double what they were in the bottoming-out years of 1959-60. While the radio networks agree their business is on the upswing, station reps and other sales officials offer differing assessments of spot radio sales. Mostly they say sales are up, but they disagree as to how much. "The business is just pouring in," according to the head of one major-market station group. A station rep with both large and middle-sized markets on his list 2 H.R. 5345. |