stereophonic long-playing records that week were produced by 16 companies, including 3 that were not represented on the monaural longplaying list for the week and 3 that were not represented on the tenmonth stereophonic list.

There is also another kind of diversity in the record industry, which becomes noticeable particularly when a song strikes the public fancy in a way that induces various artists to become interested in performing it and various record companies in producing it. For example, the song that received the 1962 award of the Academy of Motion Picture Arts & Sciences is entitled "Moon River." By the beginning of 1963, over 100 different recorded versions of that work had been released in the United States. "Around the World" has been recorded in over 200 versions in the United States alone. And it is estimated that "Stardust" has been recorded hundreds and perhaps over a thousand times.

In the field of serious music, often ignored by critics of the statutory licensing system, there is much recording of copyrighted works (although the compositions of classical composers like Bach, Beethoven and Brahms are in the public domain). Here, the competition between versions of the same work by different artists is especially significant and the statutory license system gives the record company freedom to use the services of performing artists in producing records of works in their repertoires. A study of the December, 1962 issue of the Schwann Catalogue, which attempts to list all long-playing records currently available, shows that over 600 composers of serious musical works published after July 1, 1909 (the effective date of the Copyright Act containing the compulsory license provisions) are represented on phonograph records. Some familiar compositions subject to copyright royalty payments that appear in multiple recorded versions are the following:

Even relatively obscure works of "difficult" modern composers receive multiple recordings under this system. For example:

It is an undeniable fact that the healthy competitive conditions and technological advances in the industry were achieved under the statutory license system which enables all record manufacturers to have access on non-discriminatory terms to the copyrighted music which is vital to their operation. We respectfully submit that there is no justification for the upheaval in the operations of the phonograph record industry and other segments of the music industry that would be the inevitable result of the elimination of the compulsory license provisions.

5. The Basis of the Opposition to the Compulsory License System.

The objections to the statutory license system and the arguments advanced for its elimination are the following:

(a) Copyright should be exclusive in the field of recording rights just as it is in every other field where Congress has seen fit to grant copyright protection.

• See Appendix M.

52-380 O-66-pt. 2-3

(b) The copyright proprietor cannot prevent the issuance of phonograph records containing arrangements of the copyrighted work that distort its character.

(c) Financially irresponsible phonograph record manufacturers are free to use copyrighted musical material and the copyright proprietor has no effective means for collecting royalties from them.

(d) The monopoly problem that impelled Congress to enact the compulsory license provisions in 1909 no longer exists.

We shall deal with each of these in turn:

(a) Exclusivity of the Recording Right.

This is purely a philosophical argument. There is no legal requirement that Congress must either grant a right exclusively in the Copyright Act or withhold it altogether; Congress may attach conditions and limitations to the rights it grants. In the specific instance of recordings, Congress did grant the exclusive right to the musical copyright proprietor, but provided that once the right was exercised, directly or by means of a license, all other users would be permitted to have access to the copyrighted work for similar purposes upon payment of a statutory royalty. When it established this limitation, Congress did so expressly "as a condition of extending the copyright control to such mechanical reproductions." This is not the only limitation imposed by Congress in the Copyright Act; for example, proprietors of musical and non-dramatic literary copyrights do not have the exclusive right to perform their works publicly (as proprietors of dramatic works do)—they only have the right to perform their works publicly for profit.38

(b) Distortion of the Recorded Work.

This is a specious objection, for two reasons: (1) the copyright proprietor has a remedy under the present law by means of an action for infringement; and (2) the problem is not of serious enough proportion to justify scrapping the entire statutory license system to solve it. We doubt that any phonograph record manufacturer would contend that the right to make an arrangement for recording purposes under

the compulsory license clause is unlimited. The authorities on the subject agree that the compulsory licensee merely is permitted "some latitude"—not that he has complete freedom to alter or distort the character of the copyrighted work."

The right of the phonograph record company to make use of the copyrighted musical composition under a statutory license must include the right of arrangement to a certain degree.38 Popular musical compositions today frequently reach the record company only in the form of a "lead sheet," which contains nothing but the melodic line in single notes (as if to be played by one finger on the piano) accompanied by the lyrics, if any. In order to convert this piece of music into a commercially acceptable recording, it is necessary for the phonograph record manufacturer to have an orchestral arrangement made and individual parts prepared for the musicians playing the various instruments that make up the orchestra. This is common practice even when the music is available from the publisher in something superior to "lead sheet" form, because different artists have different styles and require various kinds of musical arrangements for recording purposes just as they do for live performances." Incidentally, the arrangements and copying require the expenditure of substantial sums by the record company-an expense in which the music publisher does not share.

The solution to the distortion. problem lies in the hands of the copyright proprietors themselves. There have been occasional reports in the trade press of litigation based on the claim that an arrangement mutilating the original work constitutes an infringement, i.e., that it is outside the scope of the rights acquired under the statutory license-but no such case appears ever to have been brought to trial.

It is conceivable that Congress would find the statute to be in need of clarification on this issue, so that the right of a statutory licensee to adapt or arrange for recording purposes would be subject to the limits of the well-known doctrine of "fair use" in copyright law.40 However, we repeat that this defect-if defect there be-is grossly insufficient to support the excision of the entire statutory license system.

(c) Financially Irresponsible Manufacturers.

The problem of the "deadbeat" phonograph record manufacturer exists, although we doubt seriously that it is any more prevalent in the phonograph record industry than in others. But this is another problem whose solution certainly does not require that the mechanical license provisions be eliminated from the statute.

RIAA has no interest in sheltering financially irresponsible record manufacturers. As far back as 1925 (long before RIAA was organized), the record industry supported at Congressional hearings some alteration in the statutory license system that would give copyright proprietors improved remedies against deadbeats."1 Various proposals actually were introduced, although none was enacted. For example, one suggestion was that a defaulting phonograph record manufacturer should forfeit the benefits of the statutory license system permanently." Other remedies for the situation have been suggested and no doubt still others could be devised.

Here again, however, we are not dealing with the general situation, but with a specific exception. Surely this trouble-spot can be eliminated by some method short of destroying the statutory license system in its entirety.

(d) The Monopoly Problem of 1909 No Longer Exists.

This is a fallacious argument which rests on the illogical premise that because the statutory license system has proven effective in preventing monopolistic practices, there will be no monopolistic practices if it is repealed. The Register's Report casually states that "the compulsory license is no longer justified as an antimonopoly measure' and even makes it appear-contrary to fact-that the record industry acknowledges that "the antimonopoly reason for the compulsory license is gone." The only basis given for this conclusion is the statement that there are now hundreds of competing record companies and hundreds of competing music publishers."

This analysis of the monopoly problem carries with it the implication that Congress in 1909 took the extremely narrow view that its only task was to prevent the Aeolian Company from obtaining a monopoly of the player-piano roll industry. But it is perfectly plain