which event, the clubs would still compete on a basis of equality and parity.

The greatest contribution to the success of a recording is that made by the artist, yet no member of the team that goes into the making of a successful phonograph record is as shabbily treated as the artist. Recording artists have always been at a great disadvantage under the exclusive licensing agreements entered into by several of our competitors. They have been featured in their advertisements as free items on which they don't get any royalties and have only received half royalties on regular sales.

More importantly, a greater abuse is the payment of royalties at best on a quarterly basis. Other clubs, which are similar to us, are tracking their sales daily on a computer and can very easily make payments monthly. By making payments quarterly all the recording artists have supported the advertising of the other clubs by foregoing their equitable share and prompt payment of the royalties.

I would call the committee's attention the fact that we were able to become the second largest record club in the world without any special licensing agreement deals. It is therefore not unreasonable for an artist to demand full royalties, prompt payment and a greater rate from the other clubs. It is my sincere belief and that of the Record Club of America that artists should be compensated for their recordings and we believe that the present practices that are prevalent in the recording industry are intolerable.

As has been pointed out by Stan Kenton in his excellent testimony to this committee, the costs which are charged against the artist are absolutely ridiculous and suffocating. It is impossible under the present structure of exclusive licensing deals for an artist to achieve any financial security. By eliminating exclusive licensing arrangements both as to the record itself and the performance rights, the committee would be performing a great service to the artist. It would have several beneficial effects.

First, there would be a greater distribution of recorded product and therefore more exposure for the artist. Secondly, it would give the artist more money and yet at the same time bring about lower prices to the consumer. Thirdly, it would increase competition within the record industry and would make phonograph records more readily available to all consumers.

This problem that I have called to your attention is a real one within the industry. The testimony of those representatives of RIAA as well as the other members of the industry who testified here earlier told you how they would face the poorhouse unless they received relief in the royalty provision payable to publishers. As is so often the case in these matters, it is not what you are told but what you are not told that points up the real practices within an industry.

I am calling these matters to your attention so that the committee will be fully cognizant of some of the economic facts of life that exist within the phonograph industry.

The industry, despite numerous cries of poor mouth by some of the largest communication companies in the world, has never been more profitable. One has only to look at the complete balance sheets and financial statements of the various companies to see that their sales have increased every year as well as their profit margins. For example,

the Columbia Record Club, a division of CBS, has been found to have had a higher profit per dollar of sales than any group of manufacturers, including the drug industry. (Brief in support of appeal from initial decision, CBS, Inc., et al, FTC D. 8512, p. 107).

Gentlemen, it has been a pleasure to be here. I deem it an honor to appear before this committee and I would be pleased to answer any questions that the committee may have.

Senator BURDICK. Thank you for your contribution this morning. To summarize your testimony, you would like to have the distributors of records have the same privileges as the manufacturers of records.

Mr. FRIEDMAN. That is correct, Senator.

Senator BURDICK. That is how simple it is?

Mr. FRIEDMAN. Yes, Senator. We would like to have the same provisions of licensing; yes.

Senator BURDICK. Senator McClellan?

Senator MCCLELLAN. No questions, thank you.

Senator BURDICK. Senator Fong!

Senator FONG. I am sorry, Mr. Chairman, I did not really have a chance to hear or to read all of the testimony of the witness except the last few pages. I may have some questions I shall ask later.

Senator BURDICK. Does either of your associates wish to say anything?

Mr. ROCKEFELLER. Thank you, no, sir.

Mr. MARKOWITZ. No, sir.

Senator BURDICK. Thank you very much.

Our next witness is Herman Kenin, president of the American Federation of Musicians of the United States and Canada.

STATEMENT OF HERMAN KENIN, PRESIDENT, AMERICAN FEDERATION OF MUSICIANS OF THE UNITED STATES AND CANADA, ACCOMPANIED BY HENRY KAISER AND JEROME ADLER COUNSEL

Mr. KENIN. Mr. Chairman, members of the committee, my name is Herman Kenin. I am president of the American Federation of Musicians of the United States and Canada. I am also a vice president of the AFL-CIO and a member of the National Council on the Arts and of the executive board of the International Secretariat for Entertainment Trade Unions, with offices in Brussels.

I am accompanied here today by Mr. Henry Kaiser our general counsel and by Mr. Jerome H. Adler, our New York counsel.

I am deeply grateful for this opportunity to present to the subcommittee the reasons why American performers feel that they are being shamefully treated in the copyright law revision bill as presently drawn. We have previously voiced this position of our 275,000 musician members (and-we are confident-of American actors, singers and related performers) before House Judiciary Subcommittee No. 3 on June 30, 1965, and in the pamphlet which we published at that time and have since circulated. Our statement to the House subcommittee appears at page 1384 of the hearings and I have taken the liberty of handing up a copy of our brochure entitled "The Performing Musi

cians' Opposition to the 1965 Bill for General Copyright Revision,” which applies also to the present bill-S. 597.

We opposed the 1965 bill and we renew that opposition to the proposed legislation now before you because it denies recognition to American performers of a long-sought right to participate in the public profitable performance of records. We oppose the bill because, under guise of establishing a single national system of copyright, it would eliminate even the remaining vestiges of common law protection which possibly still exist in a few limited areas. We oppose the bill because it perpetuates a long and shameful discrimination against American performers a grievance for which we urgently petition for affirmative redress.

Our statement is intended to illuminate and expose the motives and practices of those who prosper from the uncontrolled, uncompensated profitable public performance of recordings while opposing this simple, basic, moral right of performers to share even minimally in these

vast revenues.

That position has been articulated by performing musicians for more than 30 years both in this country and at international conferences. But despite the volumes of testimony by scholars and specialists, and the tomes of legal commentaries which have been spoken and written over the last three decades, the selfish opposition to performers' participation in the economic fruits of unauthorized recorded performances remains static, rigid and adamant. That opposition may be more sensitively judged after an examination of its sources:

1. It comes from the composers and authors societies who so eloquently condemn the jukebox exemption but who apparently would exclude all but themselves from the enjoyment of the economic fruits of creative effort.

2. It comes from the large corporate music publishers who syndicate interests in their multimillion-dollar catalogs on Wall Street along with participations in waterworks, electric power and other utilities, while they assault the salutary, compulsory mechanical license provision of the present law.

3. And last but by no means the least formidable-come the broadcasters who for almost a half century have built their vast industry on musical performance and huckstering between broadcasts of phonograph records and who today devote 80 percent of their profitable program time to playing free records-a free ride which they are most reluctant to end.

We believe that the performers' claim to long-delayed recognition in the 6 billion dollar music copyright industry presents a sharp moral question which these opponents must answer here and now to the satisfaction of the American public and this committee.

We urge the enactment of a copyright law which will give the performing musician a modicum of economic incentive and a fair participation in the profits derived from public performance of records. This will be an important recognition of public responsibility for the conservation of American talent which now suffers deprivation in the midst of plenty.

We propose that, in the same spirit with which the Congress strives to open the doors of opportunity to those whom our affluent society

has neglected, it should now at long last put an end to the special privilege and immunity which thwarts the efforts of the American performer to live by his God-given talent.

Examples of similar legislation in other countries and of systems of practical, day-to-day administration of similar rights abound. A detailed compilation of these laws appears in Study No. 26 so ably prepared by Assistant Register Barbara Ringer for this subcommittee and also detailed in the testimony of Mr. Sidney A. Diamond before this subcommittee on March 21, 1967. Those who would approach the question with open heart and mind will find helpful precedents in the successful methods of collection and disbursement of revenues from public performance of records which are actively practiced in Great Britain, in West Germany, in the Scandinavian countries, and in some countries of South America. The problems of accommodating to the reasonable necessities of advertising and publicity of record manufacturers, of establishing a central collecting and disbursing agency (either publicly legislated or privately constituted), of distribution among multiple recipients on a point system, and of many other interesting and provocative administrative questions, have been faced and successfully solved not only in these other countries but for many decades to a large extent by our great performing rights societies in the United States. Most important, the experience of other jurisdictions in which rights in recordings have been recognized and enforced demonstrates that the public has suffered no deprivation of legitimate access to its cultural heritage and its entertainment facilities.

In response to the request of the House subcommittee, we submitted a memorandum of specific changes to the proposed bill on August 31, 1965. Our memorandum is printed at page 1417 of the hearings. A revision of those proposals keyed to S. 597 is appended to my statement. Our proposals give full recognition to the paramount public right and convenience and appropriately defer to the seniority of the traditional participants in the American copyright largesse-the music publishers and the performing rights societies. Thus, our proposals would grant the right of public performance in a sound record to the performing artist for a limited period of 10 years from the date of publication of the recording; the right of the performer would be subordinate to the right of the owner of the copyright in the musical composition; the right would be subject to a compulsory license so that anyone upon payment of a “just and reasonable" royalty might perform the recording; the royalty rate would be fixed by the Register of Copyrights after hearing, and that rate would be reexamined at least at 10 year intervals; and all performers on a specific record would be required to vest rights in a single agency so as to facilitate collection and distribution of the proceeds of public performance.

When we presented this outline of a proposed legal recognition of performers' rights to the House subcommittee in August 1965, we recognized that it had not been tempered on the forge of debate and discussion with other groups. We therefore stated our willingness-indeed our eagerness to discuss the matter further and to participate in the formulation at least of this phase of the copyright law revision with full regard and consideration for the public interests and the rights and positions of others.

Our proposals and suggestions met complete and deafening silence for almost a year until publication of the House subcommittee's report. That report recognizes and I use the language of the report "the creativity and value of the contributions of performers and record producers to sound recordings" and concedes that there "was little direct response to these arguments." Nevertheless, the report concludes that— and again I use the language of the report-"it was apparent that any serious effort to amend the bill to recognize even a qualified right of public performance in sound recordings would be met with concerted opposition." So, as has done time and time again during the past 30 years, the entire embarrassing subject was once again consigned to "the possibility of a full consideration of the question by a future Congress."

With deep respect for the erudition and hard work of the Register of Copyrights and his able staff and with full recognition of the arduous efforts of the House subcommittee, I must respectfully suggest that the justice and morality of the performers' position should not once again be overlooked in the quest for consensus. Certainly there is and will always be-in this time and in the time of future Congressesstrong opposition to recognition of performers' rights from those who profit by trampling those rights. But must we entirely abdicate to these moral infringers and constitute them the final arbiters of how the Congress of the United States shall exercise the sovereign constitutional duty and power "to promote the progress of science and useful arts"? More recently-indeed only 3 weeks ago before this subcommitteethe Record Industry Association of America on March 21, 1967, presented for the first time the official collective position of phonograph record producers in support of a performing copyright in sound recordings. We have reviewed with great interest the technically excellent formulation of this industry position which is incorporated in amendment No. 131 to S. 597 introduced by Senator Harrison Williams.

But while we admire the skill of the formulation, we do not believe that we unduly cavil if we seek satisfactory answers to some questions before we examine into the principle of the Williams amendment; namely, that the phonograph record producers are suitable custodians of and participants in the rights in the public performance of sound recordings.

Are these the same phonograph record manufacturers who now send special pressings and free records to radio stations for unlimited broadcasts?

Are these the record producers who repeatedly have proclaimed that their sole business interest is in the home sale and use of phonograph records-not in the revenues to be derived from public performances of those products?

Are these companies who now enjoy legal rights to control public broadcasts of records in several foreign jurisdictions-but spurn and neglect the exercise of such control or the collection of revenues from such public broadcasts?

Should these record manufacturers by virtue of their demonstrated practices, their corporate affiliations, their interests and predilections, be constituted the legal custodians and guardians of the moral right of