COPYRIGHT LAW REVISION WEDNESDAY, JUNE 16, 1965 HOUSE OF REPRESENTATIVES, The subcommittee met at 10 a.m., pursuant to recess, in room 2226, Rayburn House Office Building, Hon. Robert W. Kastenmeier, presiding. Present: Representatives Kastenmeier, St. Onge, Edwards, Tenzer, Poff, and Lindsay. Also present: Herbert Fuchs, counsel, and Allan Cors, associate counsel. Mr. KASTEN MEIER. The subcommittee will come to order. We are continuing into the fourth week of hearings on general copyright revision. The Chair desires to announce that we have permission to sit, we will have permission to sit this afternoon and for awhile tomorrow afternoon. Today we are pleased to hear from the film industry and the audiovisual industry. Our first witness this morning representing the Motion Picture Association of America, Inc., is Mr. Adolph Schimel, chairman of the law committee, followed by Mr. Edward Sargoy for the copyright committee of that association. Welcome to the committee, gentlemen. STATEMENT OF ADOLPH SCHIMEL, ON BEHALF OF THE MOTION PICTURE ASSOCIATION OF AMERICA, INC. Mr. SCHIMEL. Mr. Chairman and members of the committee, my name is Adolph Schimel. I am vice president and general counsel of Universal Pictures Co., Inc. I am also a member of the board of directors of Motion Picture Association of America, Inc. I appear here today as chairman of that association's law committee, which is composed of the respective general counsel for its principal member companies. They are usually recognized by their shortened corporate names as Allied Artists, Columbia, MGM, Paramount. Twentieth Century-Fox, United Artists, Universal, and Warner. These companies, with the exception of United Artists, comprise the largest producers of motion pictures for theaters in the United States. They and United Artists are also distributors of motion pictures produced not only by themselves but by a large number of important independent producers. 983 52-380 0-66-pt. 2——22 They distribute those motion pictures for exhibition in theaters in the United States and throughout the entire world. I would like, at the outset, on behalf of the Motion Picture Association, its copyright committee, and myself, to express our deep respects to and our high regard for the Register of Copyrights, Abraham L. Kaminstein, and his associates in the Copyright Office who have, over a period of several years, devoted their energies looking to revision of our copyright law. The approach was scholarly but at all times with due regard to the realistic and practical considerations involved for the creators and users of copyrighted works. The careful studies which were made, the reports and drafts which were prepared, and the extensive discussions, private and public, at the various panel meetings, bar association committees and conventions, of proposals for the new bill, are reflected in the bill now before you. The copyright committee of the association availed itself of the Register's invitation for representation at his panel conferences and actively participated in these and other discussions with great attention and interest. The motion picture industry is both an important creator of copyrighted works and an important and very substantial user of copyrighted works created by others, whether in the form of plays, novels, short stories, or cartoons, all of which are acquired from time to time to be used as a basis of or as a part of the increasingly expensive motion pictures which are produced and distributed by the industry throughout the entire world. I would like to place before you some facts which will be helpful in appraising the particular interest and concern of the motion picture industry in certain of the provisions of the proposed bill. In the production of motion pictures literally thousands of creative people are employed to contribute to the film that goes on the screen. They include writers, composers, painters, set designers, cameramen, film editors, film cutters, musicians, as well as producers and directors, who contribute their creative talents for the stars and actors who perform in the motion pictures that are produced. Hundreds of millions of dollars are spent in film production. The payroll for production employees in Hollywood exceeds $250 million per year and approximately $25 million is spent elsewhere throughout the world. Capital investment in studios is approximately $150 million. The average cost of a feature is about $1,500,000. A number of these pictures cost from $2 to $5 million, and in the case of the so-called "spectacular" or "special" picture, such as "Around the World in Eighty Days," "The Ten Commandments," "Ben Hur," "Spartacus, "Mutiny on the Bounty," "Cleopatra," "My Fair Lady," "The Greatest Story Ever Told," the range in negative cost may be from $10 million to more than triple that amount. To the cost of producing the picture must be added the substantial cost of prints required for the exhibition of the picture in the theaters. This may be from $250 to $400 per 35 millimeter print for black and white and $500 to $800 for color subjects. For road show features in 70 millimeter the cost may run from $3,000 to $7,500 per print. Additionally, there are tremendous expenditures for advertising and exploitation. The importance of the motion picture in the economy of the country and as a medium for effectively carrying the American way of life all over the world cannot be stressed too strongly. American films account for approximately 55 percent of the available theater playing time in countries outside the United States. The members of our association repatriate approximately $250 million annually from film rentals derived from the exhibition of their pictures overseas, and to such extent help to close the dollar gap. As a creator and owner of copyrighted works in the form of completed motion pictures our members serve approximately 18,000 theaters, including 5,000 drive-ins in the United States, which have an average weekly attendance of approximately 45 million people who pay into the box office $1.5 billion a year. In the past 10 years producers and distributors of motion pictures have made available for television broadcasting, from their libraries, some 10,000 feature motion pictures. Approximately 500 to 600 pictures are added annually for that medium. Additionally, our producers are heavily engaged in creating motion picture programs in filmed or videotaped form specifically for television broadcast, an increasing number of which are finding markets overseas. The motion picture producers also make their pictures available, reduced in size to 16 millimeter from the standard theatrical 35 millimeter or 70 millimeter width, to the Army, Navy, Air Force, Veterans' Administration, and Red Cross, for distribution to their installations in this country and elsewhere throughout the world. Pictures reduced to 16 millimeter prints are also made available for nontheatrical distribution agencies which serve planes, boats, trains, schools, churches, hotels, clubs, camps, and other nontheatrical situations. The industry, therefore, has a great stake in the rights accorded under the copyright law. I should like to comment briefly on the provisions of the bill in three areas of major and particular concern to producers of motion pictures; namely, authorship of works for hire, reversion, and ephemeral recordings. These, as well as many other provisions of the bill, are treated in considerable detail in an accompanying memorandum statement by the copyright committee of our association, which I ask leave to file for your committee's record. Mr. Edward A. Sargoy, special counsel to the copyright committee of the association, who has, over the years, actively participated in all phases of the studies and discussions leading to the preparation of H.R. 4347, and who took the chief role in drawing the memorandum statement, will follow me and discuss various of our problems at greater length. Mr. KASTENMEIER. Without objection the memorandum referred to will be received by the committee and made part of the record. (The document referred to follows:) |