Mr. SHEPARD. You asked me if I had studied this bill and I said yes. I have not studied the whole copyright law. Representative BLOOM. What is section (e) and how is this going to be amended? Mr. SHEPARD. You know a great deal more about that than I do. Representative BLOOM. I would not say that. If you have studied it, you ought to know as much about it as I do. Well, that is all. Representative PERKINS. How many days in a year do you broad cast? Mr. SHEPARD. Three hundred and sixty-five. Representative PERKINS. Then, according to the new rates, this would cost you about $100 a day for the music of this society? Mr. SHEPARD. Just about that much. Representative PERKINS. Then you must broadcast it about every hour. Mr. SHEPARD. No; but we run about eight hours a day. Representative PERKINS. Out of that you broadcast probably about five? Mr. SHEPARD. We broadcast from remote controls or where someone else's name is mentioned with that many; yes, sir. Representative PERKINS. Do you think the Government should go into the principle of price fixing on this music? Mr. SHEPARD. Well, this to my mind is more of a rate-fixing proposition than a price-fixing proposition. Representative PERKINS. Do you think there is a distinction between rate fixing and price fixing? Mr. SHEPARD. I do, and it is so thoroughly controlled by one organization that it makes it more or less necessary. In other words, the public demand musical programs, and approximately 90 per cent of the programs on the air to-day are composed of music, and approximately 90 per cent of that music is controlled by one organization. Senator BROUSSARD. Are not the broadcasters organized, also? Mr. SHEPARD. They have an association, but they have no pooling of interests. Senator BROUSSARD. Do you not cooperate in getting these contracts? Do you not work together in getting these contracts? Mr. SHEPARD. No. Senator BROUSSARD. Do you not confer with the others before you sign a contract? Mr. SHEPARD. No; we never have. Representative BLOOм. Mr. Klugh said that you had 200 mem bers. Senator BROUSSARD. If you organized, do you think that these composers would simply lose the amount rather than negotiate with you? Mr. SHEPARD. I do not get your point. Senator BROUSSARD. If you get together and negotiate with them do you think they would prefer to lose all of the amount which they are now asking you rather than compromise on the rate? In other words, is it not a matter of adjustment between you and the composers? Mr. SHEPARD. Yes; more or less. Senator DILL. But you have no organization of broadcasters that presents a solid front of broadcasters as the association presents a solid front of the music people? Mr. SHEPARD. No. The broadcasters in the association have various opinions on various things. There is no board of directors that vote and tell them what they should think, nor are they bound to go by the majority vote at an open meeting. Representative LANHAM. Is not this your idea: That while prices should not be fixed in this bill, there should be a stipulation that stations, for instance, of 500 watts should all pay a similar rate and greater or smaller stations should pay according to their classification? Mr. SHEPARD. Yes. Representative LANHAM. Without any stipulation in the bill as to what that rate should be? Mr. SHEPARD. I think there should be some stipulation in the bill. I do not know how to do it except by stipulating a rate which would make it possible to get something that is fair. Representative LANHAM. Would you not maintain the principle, though, by saying that your 500-watt stations should be charged at the same rate; that all stations of various types should be charged at the same rate without specifying what the exact amount should be? Mr. SHEPARD. That would only equalize the situation but it would not affect the permanence because it could be changed every year and you would never know where you were. Representative LANHAM. Then you do wish us to go into the question of price fixing, not only to stipulate that the rate shall be the same for all stations of the same class, but you wish us to go further and fix that rate by price fixing in this bill? Mr. SHEPARD. I do not see any other way out of it. Representative BLOOM. What do you charge per hour for broadcasting a program? Mr. SHEPARD. $150 per hour. Representative BLOOM. According to what Mr. Perkins said, if you work 24 hours a day Mr. PERKINS. No: eight hours. Mr. SHEPARD. We are not offering enough now to average having an hour sold a day. Representative BLOOM. But you think that the field of broadcasting will be in superbroadcasting, do you not? Mr. SHEPARD. No. Representative BLOOM. Mr. Hoover says differently. Mr. SHEPARD. They may be right, but, nevertheless, that is not my opinion. Representative PERKINS. Who fixes the rate or price for your broadcasting? Mr. SHEPARD. I do it personally. Representative PERKINS. And you want us to do it for them? Representative BLOOM. You get as much as you can, do you not? Mr. SHEPARD. No; we have a rate and we stick to it for everybody. Representative BLOOM. But who makes the rate? Mr. SHEPARD. I just told you, sir, that I make the rate. Representative BLOOM. You make your own rates and you stick to them. You can charge whatever you want, can you not? Mr. SHEPARD. Yes. Representative ВLOOм. Do the different broadcasters all charge the same? Mr. SHEPARD. No. Representative BLOOM. Some charge more than others? Mr. SHEPARD. Yes. We can make our own rates, but the advertiser does not have to purchase from us. If our rate is higher than he wants to pay he does not have to purchase from us. Representative BLOOM. What is the benefit of the music, copyright and noncopyright music; that is, in the public domain to-day? Mr. SHEPARD. I do not know, sir. Representative BLOOM. If I were to tell you that it is about 80 per cent and that you have the right now to use that free of charge Mr. SHEPARD. But I am talking about the music that the public wants to hear. Representative BLOOM. But your largest programs are made up of operatic and classical music and music which to-day is for the public domain, and that is over 80 per cent. Mr. SHEPARD. No; the majority of our programs are not for the public domain. Representative LANHAM. Do you pay the artists who broadcast these songs? Mr. SHEPARD. If the program is sponsored by another party, yes; otherwise, the station itself does not, with the single exception of one orchestra which is under contract. Representative LANHAM. If a singer of note should sing a solo over your broadcasting station would he have to pay your station anything? Mr. SHEPARD. No, sir; not unless he was under a sponsored program. Representative PERKINS. What do you mean by a "sponsored program"? Mr. SHEPARD. A program that somebody has put on under our auspices. Representative PERKINS. For which they pay? Mr. SHEPARD. Yes, sir. Representative LANHAM. They pay you as the broadcaster? Mr. FARSOM, of Baltimore. The gentleman just stated that the association has arranged to charge approximately $100 per day. Is that correct? Mr. SHEPARD. The proposed rate which they have made to me figures out at about that amount on the present plan that we are broadcasting; that is, figured actually from our programs of the last month. Mr. FARSOM. Have you been basing your calculations on your broadcasting on that rate? Mr. SHEPARD. On our charges? Mr. FARSOм. Yes. Mr. SHEPARD. Not particularly; no. We have not changed them, as I said. Mr. FARSOM. Then, as a matter of fact, this association, Mr. Bloom, can charge $100 a day. Is that right? Representative BLOOM. I do not know. The CHAIRMAN. If you have any questions to ask the witness we would be pleased to have you proceed with them. Mr. FARSOM. I thought I was doing that. The CHAIRMAN. Proceed. Mr. FARSOM. I asked if that statement was correct, that they had to charge $100 per day. Mr. SHEPARD. I do not know. Mr. FARSOM. Will any one of the gentlemen answer that question? Representative BLOOM. Mr. Chairman The CHAIRMAN. We would like to extend the courtesy of permitting people who are interested in this hearing to ask the witnesses questions unless it is objectionable to the committee, but not to ask for information and not to make a statement until the proper time arrives. Representative LANHAM. What is your name, sir? Mr. FARSOM. My name is J. Farsom. Representative LANHAM. Whom do you represent? Mr. FARSOM. I represent my own band in Baltimore, the United Railways in Baltimore, and several other musical organizations. The CHAIRMAN. What was the question that you desired to ask the witness? Mr. FARSOM. It was stated here that the rates were likely to be raised to $100 per day, and I did not know whether I heard correctly. If that is a fact, I would like to have it verified. Mr. SHEPARD. That is the way I figure it on the proposed contract as applied to our particular station and the number of hours that we operate on various types of programs. Representative BLOOM. I have just received information which I think will answer the question. The highest price asked of any broadcasting station throughout the United States is $50 a week up to the present time. Senator SHIPSTEAD. By whom? Representative BLOOM. If you want to clear that up The CHAIRMAN. Let us clear that up a little later. I think we will get along very much better if we proceed with the witness in an orderly way and without interrogatories. I think at this stage of the hearings we should confine the proceedings to the witness who is on the stand. If the committee desire to ask any questions, well and good, and the questions which others in the room may desire to ask may be admitted if the committee desires to proceed in that way. Mr. SHEPARD. I would like to make a statement in answer to Mr. Bloom's last remark. The society does not know, because it does not know what my program consists of, what the price it has asked would amount to. The figures that I have given you are provable from the programs of last month and can be checked up and provided for the committee. My statement is absolutely correct. Representative BLOOM. But according to your figures and what amount of business you are going to do in the future? Mr. SHEPARD. No, sir; based on what we did last month. Representative BLOOM. But there is no charge that you know of to-day which runs more than $50 a week, is there? Mr. SHEPARD. The charge that they ask of me; yes. Representative PERKINS. How much do they ask you per hour? Mr. SHEPARD. $20 per hour. It is $20 per hour only if we use from outside control points, from a hotel, restaurant, theater, or if we put on a program in our own studio in which any other firm is mentioned; that is, if anybody is mentioned other than the artists themselves. For the other programs where nobody else is mentioned or they do not come from outside we pay a blanket fee of $1,000 a year; at least, that is the fee that is asked. This $20 an hour is in addition to that and does not apply to every hour we operate. Representative PERKINS. If it costs you $100 a day, and their rate is $20 an hour, it seems to me you would be using their music 5 hours a day. Mr. SHEPARD. I am using things that come under their plan 5 hours a day. Some days it is as many as 634 hours and some days as little as 3 hours, but that is the way it averages. Representative ESTERLY. Have you a copy of this proposed contract with you? Mr. SHEPARd. No. Representative ESTERLY. Would it not be a good idea, Mr. Chairman, to insert such a contract in the record so we would know upon what such a charge is based? The CHAIRMAN. Well, no such contract has been offered yet. Representative BLOOM. He has figured this according to the amount of business he is doing to-day. The cost would run up to that amount, would it not? Mr. SHEPARD. Yes. Representative ESTERLY. I think the committee should have some idea of what this so-called contract is. There seems to be a lot of different rates per hour. Representative BLOOM. I will say to the gentlemen that this information will be furnished at the time that the opponents of the bill come forward. Mr. SHEPARD. May I say with reference to this basic rate, that if we do not accept that they can withdraw any further extension of the license and we will have to stop playing music immediately or accept those terms. Representative MCMILLAN. As I understand it, you pay $1,000 a year and in addition to that $20 an hour? Mr. SHEPARD. That is what is asked, not what we are paying. Representative MCMILLAN. Your station is a 500-watt station? Mr. SHEPARD. Correct. Representative MCMILLAN. Is a similar charge made to all other 500-watt stations of the Society of Authors, Publishers, and Composers? Mr. SHEPARD. That is what they are asking us. Representative MCMILLAN. That is what you are striving to have done? Mr. SHEPARD. Yes, sir. Representative MCMILLAN. There may be a thousand-watt station that is getting privileges for a cheaper rate than you are paying? Mr. SHEPARD. That is correct, and there are. Representative MCMILLAN. Then it is the purpose of this bill to have a uniform rate provided for certain classifications of stations, whether they pay $500 or $1,000 or $2,000? Mr SHEPARD. Yes, sir. Representative BLOOM. Irrespective of whether they are industrial or commercial or educational or anything else? |