have made very forceful arguments based on their own personal experience, which, I sometimes think may be the most persuasive. So I want to thank all of you for coming, and I think you have raised some good points. Mr. KASTENMEIER. The gentleman from California? Mr. EDWARDS. I echo the words of our colleague from Illinois, Mr. Chairman, and I know that the subcommittee and after that, the whole Judiciary Committee will do its work in its usual careful and scholarly and lawyer-like way because the problem is not a simple one. At the moment, we are stuck-you're stuck with the decision of the ninth circuit court of appeals, which is a very tough decision insofar as the witnesses today are concerned. We are trying to resolve that, and we also have a constitutional aspect of the matter to face up to, in addition to all of the other issues that were brought up today. I don't think anybody in this room could say if the court would not say that the Parris bill is unconstitutional because it violates the fifth amendment of the Constitution. A copyright is a property right, and the Parris bill takes it away, and I don't-I see somebody in the audience shaking their head, but I don't know the answer to that and nobody can resolve it and that's something that your committee is going to have to examine very carefully, Mr. Chairman. All the witnesses today made a contribution, and I appreciate your allowing me to sit in. Mr. KASTENMEIER. We do, indeed, appreciate the witnesses' contribution, and it is a complex matter. I do observe, however, that notwithstanding the effect of the decision, the sale of VCR's has not declined. Many others have testified to that. It's been going straight on up although one might think that the effect of the decision would depress the outlook for ownership of these devices and tapes, but it hasn't done so. In any event, we are still left with the problems and I compliment, again, Mr. Ferris and certainly Ms. Carol Tucker Foreman and the three gentlemen here, Mr. Anderson, Mr. Niederauer, and Mr. Atkinson, for their contributions this morning. This concludes this morning's panel of witnesses. Tomorrow the Chair will announce that we will hear from those who recommend, in addition, an audio component to the legislation which would benefit those who furnish records and other audio materials. They will include Mr. Sal Chiantia, chairman of the National Music Publishers' Association; Stanley Gortikov, president of the Recording Industry of America; Dr. Alan Greenspan, who is well known, who is an economist, and Prof. Melville Nimmer, of Los Angeles Law School. The second panel will consist of Jerry Moss, who is chairman of A&M Records; Quincy Jones, performer; Erwin Drake, immediate past president, American Guild of Songwriters; John Marmaduke, retailer and past president of National Association of Recording Merchandise. That panel tomorrow will conclude the hearing. We will meet in this room at 10 a.m., tomorrow. Until that time, we stand in adjournment. [Whereupon, the subcommittee was recessed at 12:55 p.m.] HOME RECORDING OF COPYRIGHTED WORKS WEDNESDAY, APRIL 14, 1982 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COURTS, Los Angeles, Calif. The subcommittee met, pursuant to call, at 10 a.m., Hon. Robert W. Kastenmeier (chairman of the subcommittee) presiding. Present: Representatives Kastenmeier, Schroeder, and Railsback. Staff present: Bruce A. Lehman, chief counsel; Timothy A. Boggs, professional staff member; and Thomas E. Mooney, associate counsel. Mr. KASTENMEIER. The committee will come to order. This is the third and last day of the Los Angeles hearings on offthe-air taping and we are very pleased to conclude this morning with the representatives of various interests in audio. Audio, dealt with somewhat parenthetically in Universal v. Sony, nonetheless, is a very important component of the overall question concerning not only the courts potentially, but certainly more directly, legislation before this committee. I might say on behalf of the committee-perhaps I should say this at the end-how much we have enjoyed our several days here in beautiful Los Angeles, enjoyed the city and the people here. In any event, it is a pleasure for me to greet as a first witness our first of two panels this morning, Mr. Sal Chiantia. Mr. Chiantia is the chairman of the National Music Publishers' Association. Perhaps as well-known in Los Angeles as he is in New York and he is very much part of the industry which plays a vital role in the music in America. We welcome you, Mr. Chiantia. You may proceed as you wish. TESTIMONY OF SALVATORE T. CHIANTIA, CHAIRMAN, NATIONAL MUSIC PUBLISHERS' ASSOCIATION Mr. CHIANTIA. Good morning, Mr. Chairman and members of the committee. My name is Salvatore T. Chiantia. I am chairman of the National Music Publishers' Association and before assuming that role, I was for 35 years an active music publisher. NMPA is the 65-year-old trade association of the American music publishers. Our 280 members, located in more than 20 States, include publishers of music of all types, popular songs, symphonies, hymns, educational music, operas, soul, country, every expression of music creativity. Most of our member companies are small businesses with less than a dozen employees. I am accompanied today by Mr. Stanley M. Gortikov, president of the Recording Industry Association of America, Dr. Alan Greenspan, economist, and Jon Baumgarten, a former General Counsel of the U.S. Copyright Office. Our presentation will be continued by a second panel made up of Mr. Ervin Drake, who is the immediate past president of the American Guild of Authors & Composers, Mr. Quincy Jones, a composer and award-winning record producer and performer, Mr. Jerry Moss, the chairman of A&M Records and Mr. John Marmaduke, immediate past president of the National Association of Recording Merchandisers. We appear in support of H.R. 5705, which we believe to be a reasonable, balanced, and necessary response to the issue of home audiotaping. Our panels include representatives of several segments of the musical arts community, but we speak on this matter for an even broader constituency joined together as the Coalition To Save America's Music. The reaction of the music community to this recent hometaping development has been a unique demonstration of a unity of all facets of our music community. Never in our history has there been such a coming together, such a cohesiveness, such a common purpose. The reason this has happened now is quite simple, home audio taping and, more particularly, uncompensating home taping, poses a dire threat to all of our lifelihoods, all of our jobs and, at the bottom to that unique product of our combined efforts, the unparalled richness and diversity of American music. The Coalition To Save America's Music has evolved since the beginnning of the year in response to the home-taping confrontation, a problem to which the legislation before you is addresed. It is made up of 19 national music organizations, not only writers, publishers, performers, and record companies, but other trade and professional associations, unions, performing rights organizations, and associations devoted to black, country, and gospel music. It also embraces organizations made up of consumers of music, music lovers, recored buyers, and record stores, which also sell blank tape. The National Music Council, itself made up of 59 music organizations, has passed a resolution which I have attached to this statement as well as a complete list and a brief description of the organizations which make up our coalition. The witnesses that follow will provide you with full details of the devasting impact of home audiotaping on the music community and, ultimately, to the public. I would like to turn briefly to the one segment of that community I know best, music publishing. NMPA is a proud member and a central element of America's music community. The music we publish sets the standard for the whole world. Our music makes a real, albeit comparatively modest, contribution to our balance of payments, but its importance as a cultural export cannot be overestimated. It is the American idiom which is the most universally understood and appreciated and it continues to be our most welcome ambassador. Music publishers are a class of copyright owners to whom fair compensation for audio recording would be assured under H.R. 5705. We are copyright owners because composers and lyricists en trust their creative work to us. And the writers' work, music, is the publisher's only business. Their creativity is the publisher's only product. Financial support to writers and promotion to popularize their works and management to assuure optimum circulation is our basic function. The financial return which we receive from licensing the rights created by copyright is what enables us to continue to do our work and our incentive to encourage the creativity of our composers and authors. Royalties from recordings represent a major and essential source of income to lyricists, composers, and their publishers. Statistical data have made very clear that these royalties have already been considerably diminished by reason of widespread private audiotaping. Technology in the immediate future threatens to make the taping process easier. Home taping thus causes present financial and cultural injury and future menace. The inevitable result is clear; taping will increase. No one can question this. Revenue to lyricists, composers, and their publishers from recordings will further diminish as a result of lost sales and lost royalties. If the rewards which creative people may reasonably expect diminish, so, too, will the sum total of available recorded music itself tend to diminish. We would have fewer and fewer songs recorded, fewer and fewer works of the mind and spirit which enrich our lives. And, finally and ironically, though there may be more tape recorders, there will certainly be less music to copy. Our purpose today is to ask your assistance in avoiding this ultimate result, but we do not ask that you forbid or even inhibit individuals from home audio taping. We do not ask that you stem technological progress or impede the manufacture and distribution of audio recording devices and tape. We do not ask that you impose liability on private individuals or intrude on personal privacy. And we do not ask that you create for us a new source of income or a new right. We ask only your assistance in preserving the value of our historical recording right in the face of the onslaught of recording technology. And we ask that you do so by providing a workable system of fair compensation from those businesses that base their profits and revenues on the recording of our works. The royalty which would be provided by H.R. 5705 determined by the Copyright Royalty Tribunal can in no way be considered a windfall or supplementary income. Its purpose would be to offset losses which are clearly demonstrated by the economic data to be presented by Mr. Gortikov and Dr. Greenspan. As you listen to the remaining witnesses this morning, I urge you to view this issue in its proper context. H.R. 5705 is not, as its opponents would have you believe, a legislative aberration or a radical exercise. To the contrary, it is in the best tradition of this committee and the Congress. Consider the following: In 1909, Congress created a new right in our copyright law, the recording right. Since 1909, it has become an increasingly essential source of income to composers, lyricists, and to us the publishers. It is now and has been for many years a fundamental component in the economic incentive to authorship envisioned in the Constitu tion. Home taping dilutes that incentive and undermines the recording right. But this is not a new phenomenon copyright and new technologies have headed on a collision course. No one in or out of the Government is more aware of this than the chairman and the present and past members of this subcommittee. Thanks in large part to the tireless efforts of this subcommittee and its dedicated staff, the collisions have been avoided in other areas of potential conflict. You have striven to preserve the historical values, traditions, and purposes of our copyright system without hampering the development of new technologies or denying their benefits to the public. We commend H.R. 5705 to your favorable consideration as just such a measured, balanced response that accommodates all legitimate interest, both public and private. Article 1, section 8 of our Constitution could not be better served. Thank you very much. [The statement follows:] STATEMENT of Salvatore T. CHIANTIA Mr. Chairman and members of the committee, my name is Salvatore T. Chiantia. I am Chairman of the National Music Publishers' Association. Before assuming that post, I had been an active music publisher for over 35 years. NMPA is the 65-year old trade association of the American music publishers. Our 280 members, located in more than 20 states, include publishers of music of all types-popular songs and symphonies, hymns and educational music, operas and soul and country-every expression of music creativity. Most of our member companies are small businesses with less than a dozen employees. I am accompanied today by Mr. Stanley M. Gortikov, President of the Recording Industry Association of America, Dr. Alan Greenspan, economist and Jon A. Baumgarten, former general counsel of the U.S. Copyright Office. Our presentation will be continued by a second panel made up of Mr. Ervin Drake, immediate past President of the American Guild of Authors and Composers, Mr. Qunicy Jones, composer, award-winning record producer and performer, Mr. Jerry Moss, Chairman of A & M Records and Mr. John Marmaduke, immediate past President of the National Association of Recording Merchandisers. We appear in support of H.R. 5705, which we believe to be a reasonable, balanced, and necessary response to the issue of home audio taping. Our panels include representatives of several segments of the musical arts community—but we speak on this matter for an even broader constitutency, joined together as The Coalition To Save America's Music. The reaction by the music community to recent home taping developments has been unique and a demonstration of unity of all facets of the music community. Never in our history has there been such a coming together, such a cohesiveness, such a common purpose. The reason this has happened now is quite simple-home audio taping-more particularly, uncompensated home audio taping-poses a dire threat to all of our livelihoods, to all of our jobs, and—at bottom-to the unique product of our combined efforts, the unparalleled richness and diversity of American music. The Coalition To Save America's Music has evolved since the beginning of this year in response to the home taping confrontation, a problem to which the legislation before you is addressed. It is made up of 19 national music organizations-not only writers, publishers, performers and record companies, but other trade and professional associations, unions, performing rights organizations and associations devoted to black, country and gospel music. It also embraces organizations made up of consumers of music, music lovers, record buyers, and record stores which also sell blank tape. The National Music Council, itself made up of 59 music organizations, has passed a Resolution which I have attached to this statement as well as a complete list and brief description of the organizations which make up our Coalition. The witnesses that follow will provide you with full details of the devastating impact of home audio taping on the music community and, ultimately, on the |