Africa; again, in each instance, the statutory license feature is retained in the proposed new legislation. It is evident that there is widespread international agreement on the proposition that the statutory license system for phonograph records has utility and is worthy of preservation in the public interest. Wherever doubts have been expressed, they have been resolved in favor of maintaining the existing system as an alternative to disrupting the operations of the phonograph record industry of the particular country involved. Let us turn now to the situation in those countries which never adopted a statutory license system for phonograph records, such as France. Experience proved how impractical it was for each phonograph record company to negotiate separately with an individual music publisher for each copyrighted musical work it wished to use. As a result, an organization named Bureau International de l'Edition Mecanique ("BIEM") was established some years ago to issue blanket licenses to phonograph record manufacturers. Basically similar in concept to a performing rights society,** BIEM receives from each of its publisher members the "mechanical" or recording rights in their entire catalogues of copyrighted music. It then makes available to phonograph record companies a standard form of license (providing for the payment of a percentage royalty) under which the record manufacturer for a term of years may use any or all of the musical compositions controlled by BIEM. The practical accommodation dictated by commercial necessities and the public interest thus was achieved for these countries by means of private contract. Since the law failed to make provision for a compulsory license system, the parties were forced to invent one. This form of contractual substitute for a statutory licensing system could not be used in the United States because it is incompatible with our antitrust laws. Even aside from the questions of monopolization that would be raised if substantially all recording rights were controlled by a single organization, the fixing of a standard royalty rate by a Extracts from reports issued by a number of foreign governments are printed in Appendix P. • See Section 8, above. 84 combination of copyright proprietors would raise serious questions under the antitrust laws. It will be recalled that a number of music publishers were involved in such a case in 1920, which was cited to Congressional committees considering copyright revision in the 1920's as an indication of tendencies towards antitrust infractions in the musical copyright field. The standard BIEM contract contains additional provisions of a highly restrictive nature. For example, various types of dealings with other record companies are prohibited without BIEM's express consent, unless the other record companies also are signatories of the BIEM standard contract. Included among these restrictions are the use of another company's facilities for the pressing of records and the transfer of a duplicate master recording for other purposes. It is believed that provisions of this nature also would be viewed critically under the antitrust laws of the United States. In summary, the foreign experience all points in the direction of retaining the statutory license system in the United States Copyright Act. Similar provisions in foreign statutes have been retained and reenacted with minor modifications in recent over-all copyright revisions. In countries which have no statutory license system, the practical necessity of accomplishing the same result has led to the formation of a monopolistic organization and the use of agreements that evidently would be unacceptable in the United States because of our antitrust laws. 10. Conclusion. The phonograph record industry can truly be said to exist in its present form because of the statutory license system embodied in the Copyright Act of 1909 by deliberate Congressional choice, bottomed on the public interest. The evidence and arguments presented in support of the Register's recommendation that this system be eliminated fall far short of sustaining the burden that necessarily is assumed by proponents of such a drastic change in the law. All indications point to a clear danger of the growth of restrictive practices in the entertainment field if the principle of free accessibility for record companies to copy See Section 3, above, and Appendix I. righted music should be repealed. The experience of half a century in this country and abroad should be heeded. The objections noted in the Register's Report can be overcome easily without the need for eliminating the statutory license system altogether. Any doubts about the usefulness of the present system must be resolved in favor of preserving it because the alternative, at a minimum, is severe disruption of the operations of the hundreds of companies constituting the phonograph record industry, and public disservice in reducing the supply of music available in its most accessible form. Respectfully submitted, RECORD INDUSTRY ASSOCIATION OF AMERICA, INC. 1 East 57th Street New York 22, New York October 7, 1963 Notes 117 U. S. C. §§ 1(e), 101(e). 2 House Committee Print, 87th Cong. 1st Sess. (1961). Referred to here inafter as "Report.” Report, p. 151. Report, p. 5 [emphasis added]. * Gelatt, The Fabulous Phonograph (Lippincott, 1955) is a valuable history of the industry. •These statistics were introduced into evidence in a Federal Trade Commission proceeding against Columbia Broadcasting System, Inc. and Columbia Record Club on February 5, 1963 (Tr., p. 2136). "The list includes "all those who submitted for review by Billboard Music Week one or more LP's since July 1, 1961, and/or one or more singles since January 1, 1962." Billboard Music Week, August 4, 1962, Section 1, p. 21. Electrical Merchandising Week, reported in Billboard Music Week, n. 7, supra, p. 15. "Since 1948 the number of commercial radio stations on the air has more than doubled, while the programming content has shifted from dominance by live national network programming to the almost complete use of recorded music on a local station basis." The statistics are as follows: Billboard Music Week, n. 7, supra, p. 17. 10 Billboard, April 6, 1963, p. 35. The statistics are as follows: Hours per week on the air: Hours devoted to record shows: 1953 1963 122.7 97.8 (79.7%) Billboard's discussion of the survey includes the following pertinent comments: "The vastly increased amount of musical repertoire available on records has encouraged the development of many different kinds of programming formulae within the broader scope of record programming" (p. 35). "Only a few years ago, albums accounted for an infinitesimal share of radio record programming. It has been only a few years, too, since singles dominated not only radio programming but dollar sales volume as well. With the rise of the LP as the dominant force in record sales, the share of radio time devoted to albums has also steadily grown" (p. 40). 11 Billboard Music Week, n. 7, supra, p. 8. 12 There is a widespread practice of exporting duplicate master recordings under license agreements. In foreign pressing plants, these master recordings are used to manufacture finished records that are exact duplicates of those sold in the United States (except for the foreign manufacturer's label, which may or may not bear the same trademark used on the record in this country). Exports of finished records also carry some United States recordings to foreign countries. 18 White-Smith Music Pub. Co. v. Apollo Co., 209 U. S. 1 (1908). 14"It is understood that the manufacture and sale of instruments for the mechanical reproduction of musical airs in which copyright subsists, shall not be considered as constituting an infringement of musical copyright." Berne Convention (1886), Final Protocol, par. 3. 15 White-Smith Music Pub. Co. v. Apollo Co., n. 13, supra, pp. 15, 18. 16 See Klein, "Protective Societies for Authors and Creators," in [1953] Copyright Problems Analyzed, 19, 38. Not so many years ago, songwriters usually received only one-third of these royalties. See Shafter, Musical Copyright (2d ed. 1939), 146. 17 White-Smith Music Pub. Co. v. Apoilo Co., n. 13, supra. 18 Kennedy v. McTammany, 33 Fed. 584 (C. C. D. Mass. 1888), app. dism., 145 U. S. 643 (1892). 19 Stern v. Rosey, 17 App. D. C. 562 (1901). 20 The case was decided in favor of the defendant piano roll manufacturer by the trial court and by the court of appeals. White-Smith Music Pub. Co. v. Apollo Co., 139 Fed. 427 (C. C. S. D. N. Y. 1905), aff'd per curiam, 147 Fed. 226 (2d Cir. 1906). 21 Hearings on S. 6330 and H. R. 19853, 59th Cong., 1st Sess. (June 6-9, 1906), summarized in Henn, The Compulsory License Provisions of the U. S. Copyright Law (1956), Copyright Law Revision Study No. 5, Senate Committee Print, 86th Cong., 1st Sess. (1960), p. 3. 22 White-Smith Music Pub. Co. v. Apollo Co., n. 13, supra. 28 H. R. 2222, 60th Cong., 2d Sess. (1909), p. 8. 24 H. R. 20388, 60th Cong., 1st Sess. (1908). 25 H. R. 21592, 60th Cong., 1st Sess. (1908). 26 The history of these various bills is summarized in Henn, n. 21, supra, at pp. 21 et seq. 27 Standard Music Roll Co. v. F. A. Mills, Inc., 241 Fed. 360 (3d Cir. 1917). 28 The Federal Antitrust Laws (CCH 1952), Case No. 216. 29. Ibid. 30 See Henn, op. cit. n. 21, supra, at p. 35. |