Since we could not assure the Subcommittee that either ASCAP or BMI would be willing to perform this function, and because we could not estimate the incremental costs to either entity, we chose an independent approach. We solicited the advice of one of the nation's leading experts in data gathering and opinion research-Burns W. Roper, Chairman of the Roper Organization Inc. We asked Mr. Roper to devise a system to measure the public performance of copyrighted sound recordings across the U.S. He came up with a system that is of startling simplicity and relatively modest cost. This model involves two alternatives for monitoring: on-air monitoring, using panels of experts to identify the recordings; or special station logs. There are precedents for each, since ASCAP uses both techniques, and BMI relies on logs exclusively. On-air monitoring imposes virtually no burden on the radio station. The logging system costs less and produces a larger sample. Mr. Roper's sample would be many times greater than that employed for a typical national opinion poll. The cost would be less than $750,000 a year. (That was the estimate last year.) We do not propose this as the only approach. There are undoubtedly other workable approaches. We do believe this model will illustrate that a performance right in sound recordings can be administered fairly, efficiently, and economically. As you know, Mr. Chairman, our proposal was submitted to the Subcommittee in August 1978, and is part of the public record of the 1978 proceedings in connection with H.R. 6063, the predecessor to H.R. 997. I am very pleased that Mr. Roper is here today to answer any questions the Members may have concerning the technical aspects of this proposal. Finally, I hope you will recognize the somewhat plaintive note in our pleas for equity. Conditions in the recording industry are far from what they were when I last faced you. For more than a year, our industry has been experiencing a substantial downturn in sales and profits. This has had a very harsh effect on the companies, their creative employees, on the vocalists and musicians. The "fat cats"-as radio likes to call us-are mighty lean today. Meanwhile, radio's journals report continued healthy sales, growth and profitsheavily rooted in radio's continuing use of recorded music as its programming mainstay. We say to you that this is patently unfair. Around the world, modern nations provide performance rights protection for the sound recording. Fifty-five countries of the world respect the performance right, but not here. And that denial in the U.S. deprives American companies and performers of foreign performance royalties because of the lack of a reciprocal right here. It is strange, indeed, and unfair, as well as uneconomic, for the nation to be discriminated against in our own country, when it is America's recorded music which leads the world. We ask you to give us-the vocalists, the musicians, the recording companies—the right to protect what we have created and preserved on the sound recording. We need full copyright protection-now and for the future. TESTIMONY OF SANFORD I. WOLFF Mr. WOLFF. Thank you, Congressman. Counsel is getting sort of gray and long in the tooth in trying to persuade Congress that this is a bill that should be adopted, should be legislated. As most of you know, I represent the union AFTRA that is the collective bargaining representative for over 40,000 actors, dancers, newspersons, announcers, disk jockeys, and other professionals who inform and entertain the public from coast to coast on television, radio, sound recordings, slides, films, and cable. I am here today to voice AFTRA's support for H.R. 997-the sound recording performance rights amendment. The bill is, of course, based on the copyright clause of the Constitution which was intended to foster creativity and the dissemination of knowledge for the benefit of this Nation by assuring authors, composers, artists, inventors, and other creative individuals a means by which they could be justly rewarded for their creations. To oppose H.R. 997 on grounds that performance rights are not entitled to copyright protection is to insist that a performance embodied in the sound recording is not unique and creative. To ascertain that artists, musicians, and performers who make sound recordings do not import something that is unique and creative to each different rendition is to say that one rendition of each composition would suffice for all time. This is a contradiction not upheld by our experience and an affront to our intelligence. I don't want to repeat the rather impressive list of organizations who have publicly supported H.R. 997. Congressman Waxman did that for us just a little bit ago. I would like to point out, though again, as we have rather consistently, that opposition to the legislation comes from just one source. It is only the broadcasters who prosper enormously through the monopolies they have been granted over our airways, jukebox proprietors, and some but not all background music companies. Each of these is almost totally independent on sound recordings in their enterprise. Yet they begrudge the reasonable royalties imposed by the legislation for the people who create the products on which they thrive. They strive desperately, but without success, to place their opposition to the legislation on a higher plane than the narrow financial self-interest on which it actually rests. For example, radio broadcasters claim that they offer compensation in the form of free air time which supposedly promotes record sales and the popularity of the individual artist. This self-serving, unsubstantiated claim ignores: That the goal of the broadcaster is to increase listenership so that advertising rates and profitability can also be increased. The goal is not to promote unknown, untested artists who may or may not attract listeners. Stations play the records of artists whose type of music or individual popularity will assure listeners, hence it can be argued that the recorded work of the artist is used to promote the station rather than vice versa. That many stations do not announce the artists, so the listener does not know who is providing him with entertainment. Another oft-stated argument against the legislation is that its only result will be to make rich performers richer. The suggestion is that the sole beneficiaries of the legislation are the likes of Frank Sinatra, Stevie Wonder, Barbra Streisand, Luciano Pavarotti. That is not true. Anybody who has taken the time to read the proposed legislation knows that each performer on a sound recording shares equally with every other performer in the performance royalties provided in the bill. Pavarotti would receive no more in performance royalties from any sound recording than any of the sidemen musicians who accompany him. And in response to those who state that performers on sound recordings are economically secure, I should like to quote the Register of Copyrights who states in her report "Performance Rights in Sound Recordings, 1978:" Returning to the two issues raised at the beginning, are performers already benefiting from the existing procedures in regard to the production and sales of records and are they receiving adequate compensation for their efforts, survey data indicate negative answers to both questions. Only a small proportion of those engaged in the production of sound recordings receive any financial benefits from the sale of those records. In the three groups most affected, only 23 percent of the musicians benefit from sales, 5 percent of the musical artists and 17 percent of the radio and TV artists. Furthermore, annual earnings of performers as a group are generally low, with almost a third of the musicians, and two-fifths of the musical artists and radio and TV artists earning $7,000 a year or less (pp. 119-120). The situation is not without its irony though, Mr. Chairman. We have heard the impassioned plea of the broadcasting industry for equity vis-a-vis payment for its signals which are retransmitted by cable television systems. They contend, of course, that the compulsory license fees under section 111 of title 17 are inadequate, and I agree they are. Indeed, it is my understanding that one of the legal issues which must be resolved by the Copyright Royalty Tribunal before distributing the compulsory license fees from the cable television industry is the broadcasters' assertion that they are entitled to compensation not only for copyrighted programing itself, but also for the arrangement or order of the programing, alleging, no doubt, that this is an expression of creativity that deserves protection. (See Federal Register, vol. 44, No. 202, p. 59930; Oct. 17, 1979.) Yet broadcasters assert that the performers and record producers who produce well over three-quarters of the reprograming heard on radio are not entitled to a penny from them. This attitude for the broadcaster has been called schizophrenic. Simply stated, however, it is just plain greed. H.R. 997 should present little indecision to you gentlemen with regard to morality. It is obvious that using a person's labors and talents to enrich oneself without compensating that person is less than self-evident. If at the same time one uses another person's work without compensation, to fill his own purse, and to replace another person whose living was earned by providing the same service, then the practice becomes thoroughly indefensible. It is a practice which creates unjust enrichment and unjust employment. We are asking, of course, that you act favorably on H.R. 997. I know that the broadcaster is going to and has already made statements to the effect that the legislation protection is unfair or unwise or unnecessary. At no point, however, do they address the moral issue. At no point do they say we don't deserve it. At no point do they answer the question, Why do half the civilized nations, over half of the civilized nations of the world, why have they adopted legislation and regulation which protects the performer? I know also that the broadcaster will say that there is enough Government regulation, and that the trend now is against Government interference. Well, if I had a broadcast license and I kept it as traditionally broadcasters do keep them until they want to sell them at enormous profits, "I would want the Government to get out too and let me alone; now I have mine, you go away. This is my little money machine, not to be interfered with from now on.' Mr. KASTENMEIER. A very impressive argument. Mr. WOLFF. We have been making it long enough that I hope somebody is impressed. The talk here is about employment, the talk that we hear from the broadcaster is that it won't increase employment. This isn't an unemployment remedy bill. It isn't a welfare bill. It is an effort to remedy, as has been said so often, this unjust enrichment, this use of a person's labors for nothing. The broadcaster will say that the performer is getting a large share of the revenue that is derived in the recording industry. That is untrue. This is true concerning only a small number, who we might call name stars. Those persons are well compensated, and well compensated because not only do they get listeners for radio for free, but they do sell a lot of records. But you must understand that on every record in which a name performer appears, there are numerous musicians that nobody ever hears about, and nobody ever compensates. There are numerous what we call background singers who work at minimum scales, bargained for by the union, and who do not profit in any way, certainly not from the radio broadcast, and in no way by the sale of records. Suddenly the broadcaster becomes interested in the plight of the performer, and points out to us several times in the past that the performer is probably not getting its fair share from the record company. Well, I am delighted. I would hope that at the bargaining table where I meet the broadcasters so often, they would be that concerned about us being far behind the broadcaster as far as income and revenue is concerned. I understand that a study has been made, subsidized by the broadcasters, the National Association of Broadcasters, and that the study results in it being said that the household income of members of AFTRA, performing members of AFTRA, is above the average of the United States. I don't know what that means, and I don't know where they got their figures, but I do know that household is a tricky word, and I do know that income is a tricky word. What we are talking about now is an individual performer, not the performer whose spouse is also working, and who may have a child also working and contributing at home, and we are not talking about the income of the performer which is earned outside his chosen profession, for which he has trained long and hard. If you take all of his income, I suppose you would have to take income on investments that he may have inherited most fortunately from a parent or income from investments that he most wisely made, or perhaps just the interest on the war bonds that he bought while he was in the Army, or she did. It has been said in the past that if this legislation is adopted, that the performer will not be getting his fair share, that the record company will be getting too large a share. We are not concerned about that. We feel that exerting our efforts as we do traditionally in fair and open collective bargaining within the law, that we will get our fair share, but we can only get it if legislation of this nature is adopted. We cannot extract the proverbial juice out of a stone. The record company isn't getting this money, and the record company should get its share, and we will fight to get, I know through the years the 50 percent hopefully will become something more than 50 percent. Thank you very much, Congressman. Mr. KASTENMEIER. Thank you, Mr. Wolff. Your written statement will be made part of the record. [The statement of Mr. Wolff follows:] STATEMENT OF SANFORD I. WOLFF, NATIONAL EXECUTIVE SECRETARY, AMERICAN FEDERATION OF TELEVISION AND RADIO ARTISTS (AFL-CIO) My name is Sanford I. Wolff. I am the Chief Executive of the American Federation of Television and Radio Artists (AFTRA), AFL-CIO. AFTRA is the collective bargaining representative for over 40,000 actors, dancers, newspersons, announcers, disc jockeys, and other professionals who inform and entertain the public from coast-to-coast on television, radio, sound recordings, slides, films, and cable. I am here today to voice AFTRA's support for H.R. 997-the Sound Recording Performance Rights Amendment. The bill is, of course, based on the Copyright Clause of the Constitution which was intended by our Founding Fathers to foster creativity and the dissemination of knowledge for the benefit of this Nation by assuring authors, composers, artists, inventors, and other creative individuals a means by which they could be justly rewarded for their creations. Artists and performers who make sound recordings impart to those recordings something of themselves which is unique. In most instances when a sound recording is purchased or played, the artists and performers who recorded it are as important as the work itself. If the performance of a work on a sound recording was inconsequential, one rendition of a work would suffice for all time. Mr. Chairman, I think it is self-evident that performances on sound recordings are unique and creative acts. Those rendering those performances should be justly rewarded, in keeping with the intentions of our Founding Fathers in drafting the Copyright Clause. Granting a performance right in sound recordings would make this possible. In view of the brevity of these hearings which prevents many of those who support H.R. 997 from appearing as witness, I would like to list some of the organizations which have expressed their support for a performance right in sound recordings. They include, among others: The United States Department of Labor; The Republican Party, 1976 platform; The Consumer Federation of America; The American Arts Alliance; The Patent, Trademark, and Copyright Section of the American Bar Association; The National Citizens Communications Lobby; and The Recording Industry Association of America. And who opposes the legislation. To my knowledge, Mr. Chairman, only the broadcasters who prosper enormously through the monopolies they have been granted over our airwaves, juke-box proprietors, and some but not all, background music companies. Each of these is almost totally dependent on sound recordings in their enterprise. Yet they begrude the reasonable royalties imposed by the legislation for the people who created the products on which they thrive. They strive desperately, but without success, to place their opposition to the legislation on a higher plane than the narrow financial self-interest on which it actually rests. For example, radio broadcasters claim that they offer compensation in the form of free air time which supposedly promotes record sales and the popularity of the individual artist. This self-serving, unsubstantiated claim ignores That the goal of the broadcaster is to increase listener-ship so that advertising rates and profitability can also be increased. The goal is not to promote unknown, untested artists who may or may not attract listeners. Stations play the records of artists whose type of music or individual popularity will assure listeners hence it can be argued that the recorded work of the artist is used to promote the station rather than vice versa. That many stations do not announce the artists so the listener does not know who is providing him with entertainment. That individuals tape record music and other performances from broadcasts, thus obviating the sale of records. Another oft-stated argument against the legislation is that its only result will be to make rich performers richer. The suggestion is that the sole beneficiaries of the legislation are the likes of Frank Sinatra, Stevie Wonder, Barbra Streisand, Luciano Pavarotti, Bob Dylan, and Fleetwood Mac. But as everyone who has read the legislation knows, each performer on a sound recording shares equally with every other performer in the performance royalties provided in the bill. Pavarotti would receive no more in performance royalities from any sound recording than the lowest paid musician in the orchestra accompanying him. And in response to those who stated that performers on sound recordings are economically secure, I should like to quote the Register of Copyrights who states in her report "Performance Rights in Sound Recordings, 1978": |