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the increased price of records the profits of the pirate would double and treble, and bootlegging in records would flourish far more than it does today.
Unfortunately, when the bill was originally drafted by the Register of Copyrights, the record manufacturers had not made the present objective study. It was not finished until a few weeks ago, after the report of the Register of Copyrights had already been prepared.
The Register's Office, we believe, was surprised and interested at the results of our study. They gave us over 3 hours to present it. And as a result of that presentation we believe, although we are not sure, that the report of the Register of Copyrights now contains the following sentences:
As we see it, the statutory rate should be at the high end of a range within which the parties can negotiate, now and in the future, for actual payment of a rate that reflects market values at that time. It should not be so high, however, as to make it economically impractical for record producers to invoke the compulsory license if negotiations fail. [Emphasis supplied. )
We think our study will demonstrate that a compulsory license fee of 3 cents means the end of compulsory licensing because there are not enough profits in the industry to make it profitable for any competing record company to pay it. Thus, by enacting this comparatively trivial increase, Congress would effectively abolish compulsory licenses.
Outside of a few stray sentences by some of the witnesses before the committee, there seems to be no substantial attack on the system of compulsory licensing recommended by the Register. However, the illusion that it is unfair to the composer to put a ceiling on his royalties by permitting compulsory licensing still persists in many quarters. Indeed, in 1961 the Register recommended the abolition of compulsory licensing on this sentimental ground.
In reply, the record industry, presented the Register of Copyrights with an elaborate study showing the compelling necessity of compulsory licensing in the record industry. We think this study of October 7, 1963, should be in this record.
Without it, the facts before this committee will not be complete. The study consists of 38 pages of text supported by 64 pages of references. It is the only recent carefully compiled and objective study on the subject in the United States. We offer it for the record. It is in printed form.
Mr. KASTENMEIER. Without objection, the study will be accepted, and made part of the record.
(Document referred to follows:)
RECORD INDUSTRY ASSOCIATION OF AMERICA, INC.
IN OPPOSITION TO
THE RECOMMENDATION OF THE REGISTER OF COPYRIGHTS
MUSIC BE ELIMINATED FROM THE COPYRIGHT ACT
RECORD INDUSTRY ASSOCIATION OF AMERICA, INC
1 East 57th Street New York 22, N. Y.
D. Record Industry Association of America, Inc.-Extracts from Cer-
tificate of Incorporation and By-Laws.....
G. Contracts between the Aeolian Company and Clayton F. Summy
January 1-October 31, 1962..........
Week Ending December 29, 1962.....
Multiple Recorded Versions........
License Provisions for the Use of Musical Compositions on Phonograph Records
P. Extracts from Official Reports of Foreign countries Concerning
Retention of Compulsory License Provisions for Sound Recordings
Marks and Industrial Designs-Report on Copyright (1957)....
istry of Justice (accompanying Draft for Copyright Reform)