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both the juke-box industry and the performing rights organizations. Speaking for ASCAP, we shall be happy to furnish any information the Committee may desire.
So much for the juke-box aspect of the bill. After all, there are many other provisions vitally affecting all authors, both literary and musical.
The members of ASCAP strongly support a term of copyright which commences on creation of the work and continues for the life of the author and 50 years after his death without any formalistic requirements. We deplore the loss of so many copyrights because of inadvertent failure to renew during the twentyeighth year of the original term.
We believe that section 107 of S. 597 deals adequately with the subject of fair use and contains a workable solution of the problems of uses in education.
We endorse the statement of Mr. Robert S. Hudson, Senior Vice President of National Educational Television (NET). Concerning educational television when he said:
"I should like to make it clear in this discussion that in no sense is ETV asking for a 'free ride'. If one were to consider television as a form of publication, it would be more closely related to university presses than to commercial publishing-it pays fees but the fees are in keeping with its non-profit character and its educational objectives. My organization, National Educational Television, the effective network for non-school ETV, systematically pays fees for materials and talent used in its programs. It has negotiated contracts with all applicable performing unions and it regularly pays literary and music rights fees to copyright holders."
Mr. Hudson is correct in asserting that educational uses and uses in public television are akin to university presses and should pay less than commercial users. He continued :
"But NET still has problems of clearance of obtaining timely consents and at reasonable fees for copyrighted materials. Thus our appearance here today is to draw attention to this need and to seek your assistance in devising ways to meet it.
The members of ASCAP have indicated in a most concrete manner that they are prepared fully to cooperate with both educational television and public television. They have been cooperating with the regents of the State of New York by making their compositions available for closed circuit television to the schools without charge. They have agreed with the National Educational Television Network (NET) to permit the broadcasting of all the music in the ASCAP repertory by any and all of the 100 stations on the NET network (broadcasting NĒT programs) for the sum of $20,000 per year. In conjunction with that agreement, no ASCAP members whose works are involved have already indicated that they will permit the recording of their works for this purpose without making any separate charge. As soon as final arrangements under this agreement have been completed, ASCAP expects to make further contributions to educational and public television during its developmental stages. ASCAP pledges that those contributions will be substantially in excess of any amounts it receives from NET and similar organizations. Of course, all amounts received will be paid to the members whose works are used. The amounts contributed by ASCAP to educational and public television will come from the royalties of all members whether or not their works are used on educational or public television.
Mr. Hudson urged a system under which rates for performance rights could be fixed by a judicial tribunal if the parties cannot agree. ASCAP already subscribes to this, as the Committee will note from a letter sent by the Department of Justice to the late Senator Kilgore as Chairman of the Judiciary Committee in 1955. That letter related to the use of music in juke-boxes but it is of universal application. It reads, in part, as follows:
“The committee has also requested this Department's views as to whether under paragraph IX of the consent judgment in the case of United States v. American Society of Composers, Authors and Publishers (ASCAP) (Civil No. 13-95 (S.D.N.Y.)), the coin-operated machine owners would gain the benefits of such judgment should the bill be enacted.
"Paragraph IX of the consent judgment requires ASCAP to issue, upon the request of any user, a license for the performance of any or all of the compositions in the XSCAP repertory for a reasonable license fee. If ASCAP and the applicant are unable to agree upon a reasonable royalty, provision is made for the court to determine what would constitute a reasonable fee under the license required. If S. 590 should be enacted, owners of coin-operated machines would appear to be entitled to the benefits provided by, paragraph IX of the consent judgment in the ASCAP case."
Turning to the provisions of Section 110 which exempt certain performances of copyright music by Governmental bodies and non-profit, educational, religious or charitable institutions, I am happy to advise the committee that the members of ASCAP strongly endorse those provisions..
I should now like to comment on certain provisions which are perhaps of most concern to the Committee and which we would like to see amended.
The first is section 111 relating to Committee Antenna Television, but in accordance with the Chairman's instructions, I refer the Committee to my testimony during last year's hearings on August 3 and August 25, 1966, found at pages 130 and 230, of the printed hearings. If the Committee decides to have further hearings on the subject, or wishes further comment at any time, I should like to have an opportunity to make specific recommendations. · The second matter of concern is section 116 relating to public performances by means of coin-operated phono-record players, the so-called juke-box provision. I believe it has been demonstrated in my own testimony and that of the jukebox operators that the Committee should recommend deletion of the entire section 116 so that public performances in juke-boxes will be treated the same as all other commercial public performances.
The position of the members of ASCAP is a simple one; they do not believe that anyone should have a free ride. They do not believe that anyone should profit from the use of copyrighted works without fair compensation to the copyright owner. They believe that anyone who makes a profit from the talents of others should reward the possessor of the talent.
Let us try once more to prove that the American system of free bargaining will produce a fair result. The Committee may wish to keep posted through periodic reports. ASCAP is willing to bargain openly and will make a genuine effort to reach a fair result. The juke-box operators can always apply to the court for a determination of fair rates under the ASCAP consent decree. I can think of no more equitable system. It is not complicated and may be tailored to the needs of all types of operators. If that approach proves unsatisfactory, the Committee may then review the situation and recommend an appropriate statutory solution.
Mr. Chairman, again I want to thank the members of this Committee for their patience and their consideration to me on this and many other occasions.
I should like to conclude by urging that this Committee report the bill for copyright revision to the Senate floor in the near future. We hope that it can reach the President's desk during the current session. This is vital legislation. Our copyright laws should be brought in line with the technology and changes which have occurred over the past 60 years. In doing so the public interest will be served by encouraging those who possess the rare talent of creating musie and thus enriching the lives of all Americans.
[From Billboard, Nov. 27, 1965)
By Paul Zakaras CHICAGO.-Juke box operators around the country feel that the 50-50 revenue split is inadequate, but some are not sure they can or wish to do anything about it
One large operator told Billboard certain operators lack the motivation to increase their percentage of the split because they find loans too profitable.
Those who do want to lower the commission rate are going about it in various ways. Marie Pierce, business-wise wife of Clinton Pierce, past president of the MOA, said their Brodhead, Wis., operation establishes commissions "on a graduated scale based on location performance. A location doesn't get 50 per cent until it proves itself profitable for us." The Pierces achieve this kind of understanding by personal acquaintance with most of their customers. "Howerer," said Mrs. Pierce, "a sudden increase in proprietor turnover is creating a demand for higher commission rates."
Other operators feel that proprietor turnover is just the thing that allows them to give smaller commissions. Samuel Daub III, of Daub Vending Co. of Stowe, Pa., said that new proprietors. "don't resist the 60-40 commission rate. The old-timers are the ones against it because they are used to the 50-50 split."
1: DIXIELAND John Bilotta, a New York distributor, is attempting to help operators establish å 60-40 split, after $30 a' week front money has been taken by the operator. The deal is hinged around Wurlitzer Discotheque. Bilotta enters the location with new equipment, offers to set up a New Orleans-style nigh ab, or, Dixieland music programming, and flappers (the bụnnies of the 1920's) for opening night. If he succeeds with any degree of regularity, Bilotta will have created some of the most lucrative arrangements in the business.
But commission rates may depend greatly on area. In Gaffney, N.C., Hal J. Shinn, owner of the Star Amusement Co., said it would hurt his locations to reduce their commission rates, and to attempt such a rate change individ cated it would be impossible for an operator
“If all the operators in the State went along with it,” said Shinn, "we might be able to get 60-40. But I'don't see it happening in our area for quite some time."
In South Dakota, Sioux Falls operating partners Elmer Cummings and Mac Hasvold decided that 50-50 was not enough for them and in one year switched their route to 60-40 or healthy front money. Hasvold told Billboard he and his partner followed three axioms in achieving their goal. “First," said Hasvold, "you must believe you are making the right move. Second, you must provide improved service and programming. Third, you must be willing to lose a contract or two."
Cummings and Hasvold lost a few locations at first, but regained some of them after a short time. They consider their move to have been highly successful.
Ralph Hynes, president of Russell-Hall, Inc., of Holyoke, Mass., said operators are getting bigger and changing from commission-oriented to service-operated businesses. “This is a more businesslike way of doing things. It is improving the status of the operator and making his business much more solid than it ever was, said Hynes.
Yet, moves to obtain a larger cut are being occasionally hampered by new operators who solicit locations by quoting 10 per cent over the 50-50 rate. This situation exists in certain areas of Kansas, according to A, L. Ptacek Jr., owner of Bird Music Co., Manhattan, Kan. Ptacek, who is also a vice-president of MOA, said established operators are selling improved service and are attempting to change the commission ratio to 60-40. “It is my conviction," said Ptacek, “that we can obtain a better split by selling improved service. This selling is hard for some of us, but we must learn it."
Senator BURDICK. Senator McClellan?
Senator McCLELLAN. I am sorry I did not get here in time to hear all of your presentation. I shall review the record at some length. I was hoping you folks could come in here with an agreement, among yourselves so we could enact some legislation that would be acceptable to all of you. What are the prospects of that?
Mr. FINKELSTEIN. Mr. Chairman, we had a meeting under the aegis of the counsel of the House committee and the Register of Copyrights. If I may, I would like to tell the committee, because this is important, I think, just where we stood.
We had a meeting and the performing rights organizations collectively offered their repertories to the jukebox people for $20 per box per year. And it is the problem of the performing rights organizations as to how they would divide that. That contemplated no reporting whatsoever on the part of the jukebox operators. All the expense of doing that, everything would be borne by the performing right organizations. That is the purpose of a clearinghouse. That is what it is supposed to do. You can do it by sampling methods, but you cannot pay by sampling methods.
Now, the jukebox people said, they started with $5 and then went up to $15 per box, but they said they would have to report back to their people. They now say that they do not go for the $15 per box. We were only $15 and $20 apart.
Mr. Chairman, I think within the framework of where we were, I think it was last October, we ought to be able to work something out and not trouble this committee with trying to write a statutory formula which I do not think you would ever be able to do, and one that would work
Senator McCLELLAN. Do you think it would help you resolve it if we indicate that we could write a little tougher legislation on either of you than you want?
Mr. FINKELSTEIN. You know, Mr. Chairman, that accounts for section 116. I think the House subcommittee really said, “Now, we are going to give them both something that is impossible.” The jukebox people were in here and showed how much paperwork they would have to do to comply. Of course, I have not told the committee what we would have to do to try to find out where these works were used. You cannot tell by looking at a jukebox what the records are. They are all sealed. You have to have somebody going around to 500,000 boxes. Nobody is rich enough to do that kind of thing. I would not trouble the committee with that.
Senator BURDICK. You acknowledge that that was a bookkeeping monstrosity, do you not?
Mr. FINKELSTEIN. Oh, yes, of course it was, Mr. Chairman, but I have not told you about the investigational monstrosities that we would have to face under that same provision, because I just do not think that kind of thing is workable.
Senator McCLELLAN. What we are doing is asking you to help us. Now, if you do not help us, both interests, all interests, trying to agree among yourselves, we may not be very helpful to you and your interests. It is in your interest, what I am trying to emphasize, it is in your interest and the interest of other interested groups and parties to try to work this out.
Mr. FINKELSTEIN. Mr. Chairman, we are prepared to sit down before we leave Washington on these hearings and try to work something out.
Senator McCLELLAN. I am going to suggest to you and any body else interested in this, I hope they hear what I am saying.
Mr. FINKELSTEIN. We think it ought to be done without delay, and we would invite, of course, the committee or its counsel sitting in on any sessions that we might have, because I think that always is helpful. I think you have to have somebody who is neutral trying to see that people do not run amuck on one side or the other. I think that is always a most helpful method of arriving at an agreement. We welcome it, Mr. Chairman.
Senator BURDICK. Senator Scott?
Senator Scott. I was interested in what you said about the jukebox companies. Would you comment on the relationship between ÁSCAP
and the Broadcasters? I did not see much in your testimony about that. Where do you stand there?
Mr. FINKELSTEIN. Yes, Senator Scott. ASCAP worked out a formula with the Broadcasters back in 1941 after its music had been off the air for a year, and we learned at that time that in any dispute between the Society and the broadcasting industry; we would always come off second best.
Now, since 1950, in the case of any disputes between ASCAP and any user, rates can be determined by the Federal court, and at this very time, we have a proceeding pending in the Federal court involving the radio broadcasters, and we have reached agreement as to a rate that will be before Judge Ryan on March 27 on that. That agreement contemplates a reduction in the existing rate that was fixed by the court quite some time ago. In those proceedings, we deal not with any individual broadcaster-an individual broadcaster has the right to go into court and apply for a determination of rates--but we deal with the National Association of Broadcasters, one of their committees. It is broade than the National Association of Broadcasters, it is the allindustry committee. So we deal with them in both radio and television, and the court has fixed those rates.
Does that answer you, Senator Scott!
Senator Scott. Yes, I am just curious as to public reports as to why the broadcasting companies would allegedly be opposed to this sort of legislation.
Mr. FINKLESTEIN. I think they feel this way, Senator: They pay for the use of music. I think they feel that it is unfair to call on the broadcasting industry to contribute the amount of money that you need to give the proper encouragement to American writers and publishers without having a user such as the jukebox people getting $500 million a year, half as much as all the radio broadcasters combined, and paying nothing at all. The broadcasting industry, when we come into court, say it is unfair to expect them to carry the full load. They cannot do anything in court about it. That is a matter for Congress. But they are always complaining that they should not be singled out to pay over 85 percent (radio and television broadcasters) of what all the writers and publishers of music in America receive for performance of their works. So of course they do have a vital interest in it.
Senator Scott. Are there any later definitive works on this subject since Mr. Speiser's book in the 1940's on the legal rights of performing artists? Are there other good reference books subsequent to that? By you, perhaps, or others!
Mr. FINKELSTEIN. There was a book by Stanley Rothenberg, who was a Fulbright scholar, some years back, "Copyright and Public Performance of Music" (1954). I have written a number of Law Review articles on the subject that I would be more than happy to submit to the committee, of course.
Senator Scott. May I ask, Mr. Chairman, that the witness be permitted to submit such articles as he wishes for the committee to include by reference, Law Review articles and others?
Senator BURDICK. They will be received by reference.