one of my trips. I was invited to Cleveland to do a seminar for young songwriters followed by a television interview. In that connection The Cleveland Plain Dealer's editorial staff asked to interview me to learn more about the home taping issue. When I entered the lobby of The Cleveland Plain Dealer two women approached me; having recognized me from my morning television appearance. They said that they were unaware that the taping issue had so deeply affected people like me and other songwriters and felt guilty for having, in a sense denied me my just rights as a creator by taping. They added, unsolicitedly, a promise never to do this again and thanked me for having informed them of the facts; urging me to tell my story to the rest of the public because they were certain that when the public knew the truth, no one would want to hurt the very creators who were furnishing their great moments. I hardly needed the elevator to reach the eighth floor for my appointment. I urge this Committee to heed the plea of all songwriters, for whom I speak by enacting S. 31 thereby giving hope to those whose talents lead them into my chosen profession that their rewards will not be eviscerated. Senator MATHIAS. Thank you. Let me ask Mr. Gortikov a question about the survey that you mentioned. Did you touch on the question of the percentage of home taping done by kids and teenagers who normally would not have the cash to go out and buy new records? Mr. GORTIKOv. I think Dr. Dutka would be appropriate to answer that. Dr. DUTKA. Senator, on page 23 of the report we indicated the age of the persons who had taped during the diary keeping period, and what you find here is that young people between 10 and 17 years of age, accounted for 31 percent of those who did some taping during the diary keeping period. Mr. GORTIKOV. The preponderance of tapers even in the previous studies were shown to be the upper age levels and members of affluent families. Senator MATHIAS. Dr. Greenspan, as I am sure you know, people sometimes use tape recorders and therefore use blank tapes to make a record of totally personal, noncopyrightable material, a family wedding or a christening or a golden anniversary: purely personal events of that kind. Now, the opponents of the royalty system argue that the people who use the tape and the recorder for these kind of events will be unfairly punished if a royalty is imposed on all recorders and all blank tapes. I think Senator DeConcini made this point in his first question to the Register of Copyrights, and he implicitly made this point when he said this was a tax. How do you respond to that argument? Dr. GREENSPAN. Mr. Chairman, clearly there are recordings of noncopyrighted material. But from all evidence that we can derive, it appears that a very large proportion of recording is of copyrighted material. Audits and Surveys concluded, I believe, that 84 percent of the inventory of tapes available to their basic panel held copyrighted material. There is no question that there are at the moment two types of recordings that are made on tapes; I suspect, however, that if royalties were imposed on tapes that the market would soon distinguish between music quality and other tapes. Differentiation would occur quickly in the marketplace such that there would be two types of tapes. One would clearly be produced in a manner which would not offer high-quality music transcription. I would presume that a royalty would not be appropriate for such tapes. The critical issue, however, is that the substantial part of all taping is of copyrighted material, and one must appropriately compensate those whose rights are at this time being abbrogated. Senator MATHIAS. Senator DeConcini. Senator DECONCINI. Mr. Chairman, thank you. Mr. Gortikov, can you explain the relevance of the Supreme Court Betamax case that is pending now to your industry? Mr. GORTIKOV. The audio problem or the audio factors are not included in the Betamax case; it relates only to video home taping. So- Senator DECONCINI. Why is it that the RIAA and its members never brought a case? Mr. GORTIKOV. You mean a legal case? Senator DECONCINI. Yes, sir. Mr. GORTIKOV. We have never brought a legal case because we felt that it was-we felt it was an infringement. Audio home taping, although it has prevailed for many years, has not had an economic impact on our industry until it grew to monumental proportions. In its early days it did not have an impact. Senator DECONCINI. When did that occur? Mr. GORTIKOV. It started to escalate significantly in the seventies. We also knew that the ultimate resolution could not be decided by the Supreme Court anyway, even if a case were brought. The resolution would have to be done in these halls. Senator DECONCINI. You did not consider that a district court might decide, as they did in the Betamax, that copyright does apply. Senator MATHIAS. Senator DeConcini, if I could interrupt for just a minute. There is a rollcall vote on. I will go now. If you will continue your questions, I will try to be back by the time you are finished. Senator DECONCINI. Yes, sir. I just wondered why, once you saw this monumental growth, it did not occur to the RIAA that perhaps you would like to get a court determination of whether or not it was the intent of Congress to have the copyright law apply to the audio. Mr. GORTIKOV. That decision was never made. Senator DECONCINI. Recently I have noticed that your industry has been selling at least I have read in an article about it—more 10-inch recordings that contain only two songs, one on each side. Have these sales been up? Is this a part of your industry that is growing? Mr. GORTIKOV. Primarily you probably refer to 12-inch single records with two songs on it. These are mostly dance records with a significant amount of music on each side. The sales of those has been escalating moderately. It is not a substantive medium. It is still a very minor percent. Senator DECONCINI. Perhaps the reason people are escalating the use of tapes is because if you buy an album today you have six or eight songs on one side and maybe only one or two that you are really interested in. If the record industry was more innovative in producing more two-song records, perhaps it could minimize the taping problem. Has this approach been tried and not worked, or is it under consideration. Mr. GORTIKOV. Well, we do issue one or two tune records; the 7inch single records for years featured hit songs, but still is rather a modest medium available to the public at low cost, but the public does not take advantage of many of them. They prefer the longer LP album exposures to a given artist's music. And your favorite on one record might not be the favorite of another individual. And in most cases the artist has a plan, a musical strategy in mind for the content of the entire album, even though one or two or three songs may have emerged as the more popular hits. Mr. WEISS. May I, sir? Senator DECONCINI. Yes, sir, certainly. Mr. WEISS. When I began in the industry-the marketplace changes. Tastes of people change. When I started the single, as Mr. Gortikov just described, the single was the big item. Very few people bought LP's. That began to emerge over the years until finally I think it was the younger people who insisted upon getting 8 or 10 or 12 songs by the artist that they decided they were going to follow. The artist then became major in their mind, not the song; and then they wanted 8 or 10 songs. Senator DECONCINI. Thank you. Dr. Greenspan, let me just ask you one question. The figure you gave of $1.4 billion of displaced sales, have you calculated what it might cost to recapture that by a $1 royalty tax and a $50 royalty tax on machines? Just how many machines and how many tapes would have to be sold to recapture that? Dr. GREENSPAN. First, the $1.4 billion, in my judgment, is not appropriately recaptured, since a goodly part of that does not represent uncompensated copyrighted material. There is a substantial amount of production costs, profit, and overhead in the number. Lost royalties probably come down to a modest fraction of that and it is that which is appropriately recaptured for the copyright. But I have not made the particular calculation. [The following submissions were received for the record:] JOINT STATEMENT OF AGAC/THE SONGWRITERS GUILD, THE NATIONAL MUSIC PUBLISHERS' ASSOCIATION, AND THE RECORDING INDUSTRY ASSOCIATION OF AMERICA, INC. RE: S. 31 THE HOME RECORDING ACT OF 1983 BEFORE THE SUBCOMMITTEE ON PATENTS, COPYRIGHTS AND TRADEMARKS OF THE SENATE COMMITTEE ON THE JUDICIARY October 25, 1983 |