to the copyrighted musical composition, the way it is read. I take it, it is intended to apply to the musical composition. Nobody is worrying about the length of playing time of the disk. Obviously, if you have a long disk and you have five musical compositions, each playing 4 minutes, you should not pay only 1 cent per record side per week just as if it were a 4-minute record.

Therefore, it would seem to me an easy way that ambiguity could be remedied is by inserting in line 7 after the word "which" the word "composition." The wording then would be: "the playing time of which composition is 4 minutes or less."

With this very slight change in behalf of the Book Publishers, I commend this legislation to favorable consideration.

Mr. BRYSON. Thank you. I seem to keep remembering that I have noticed in the magazines where a million copies have been made of a recording. Is that absurd or ridiculous?

Mr. FARMER. That is not absurd. A million copies of certain recordings have been sold.

Mr. BRYSON. Of one song that has been recorded?

Mr. FARMER. That is true.

Mr. BRYSON. Thank you so much.

Mr. FARMER. I thank the members of the committee for their patience.

Mr. BRYSON. Mr. Kenneth Raine?

STATEMENT OF KENNETH RAINE, WOODMONT, CONN., ON BEHALF OF COLUMBIA, CAPITOL, RCA VICTOR, MGM, AND DECCA RECORDS

Mr. RAINE. Mr. Chairman, my name is Kenneth Raine. I am employed by Columbia Records. I speak here for Columbia, Capitol, RCA Victor, MGM, and Decca Records. I live at Woodmont, Conn. Mr. BRYSON. Those are the major record manufacturers?

Mr. RAINE. We make most of the records, Mr. Bryson. I do not know whether it is popular to be referred to as major manufacturers of anything, but we do make most of the phonograph records in the United States.

We oppose this bill because:

I. Coin machines are important and substantial users of popular phonograph records. Important because of the public's wide interest in this kind of entertainment, and because coin machines introduce new, popular music. Substantial, because they use many popular records. If the cost of such records is to jump 50 percent this source of sales may dry up.

II. People who sing and play on phonograph records, as well as those who write the words and music, are paid on the basis of sales. Their income will rise or fall with sales. Any bill which will reduce phonograph record sales is harmful to everyone in the music and record business.

III. Record companies and their employees will suffer directly from reduced sales for coin machines.

IV. The coin machine is a real source of wholesome entertainment. It furnishes music where young people want to hear it. Its good effects should not be destroyed.

91590-51-ser. 11. pt. 1——5

To amplify the foregoing reasons: This bill imposes an additional cost on records sold for coin machines which must inevitably curtail sales and affect all those people who derive an income based on sales. The increased cost of the records is approximately 50 percent. A conservative estimate of the popularity life of a record in coin machines is 13 weeks; 13 times the 2-cent payment required by this bill amounts to 26 cents, which represents a 50-percent increase in the cost of the record.

Featured performers usually are paid on the number of records sold, and if sales fall off these performers suffer directly in loss of income. The copyright owner, who alone will profit by this bill, is paid in the same manner; and the record manufacturer pays about as much to one as to the other. The statutory royalty for a copyright owner is 2 cents per record side, or 4 cents for each record. The top performers' rate is about the same. The sole purpose of this bill is to pay the copyright owner another fee.

Popular music is made popular today as much by use in the coinoperated machines as by any other means. The coin machine affords to the public an opportunity of choosing what music is to be popular. Rosemary Clooney's Come Ona My House-and for that matter My Truly, Truly Fair, or Belle, Belle, My Liberty Belle-would not have attained its popularity, and consequent spectacular sales, but for the promotional effect of the coin machine. So important is the coinoperated machine that the weekly selection of the records which are most popular in coin machines is the equivalent of radio's Hit Parade. Records chosen on coin machines represent the public current taste— the records they pay to play. A charge based on the number of records contained in the coin machine discourages maintaining a large selection. If the proprietor plays safe and keeps only the few sure-fire hits, a lot of good music stays out of the box. The promotion of popular records would be sharply hurt by the impact of this bill. Naturally we are concerned on our own account over the reduction of a large market. A significant quantity of popular records is sold for use in these machines; and unless compelling reasons are advanced for a new burden on sales we intend to oppose such a burden.

The coin machine is the modern counterpart of the old fashioned hand-wound phonograph. Just as the old phonograph brought together young people who sang, danced, and played, today the coin machine is the favorite of the teen-age milk shake and coca cola crowd. Its good influence should not be destroyed and the users penalized by this bill.

Any attacks on the jukebox as such-with which we do not holdhave nothing to do with the merits of this bill.

I think my conclusions are repetitious and I do not think they add anything more.

(The conclusions referred to are those in Mr. Raine's prepared statement submitted to the subcommittee and are as follows:)

We oppose H. R. 5473 because it will add substantially to the cost of operating coin record machines. A 50 percent increase in cost must hurt the sale of records for coin machines. The performers on the records and the copyright owner will suffer because less records will be sold, and their income which is related directly to sales will be reduced. Coin-operated machines are one of the most important means to introduce new popular records. If a new record is well received in coin machines it rises on the popularity list. If the record is not

used in coin machines it has much less chance for popularity. Curtailed sales will hurt everybody connected with the music and record business.

Mr. ROGERS. You heard the testimony of Mr. Farmer here a moment ago that in the business of those who were recording they would not pay a royalty of more than 2 cents a record. Do you agree with his testimony in that regard?

Mr. RAINE. I understand your restatement of it. In any event, I do not know, of course, we have not had to pay more than that, Mr. Rogers. It is hard to say.

You get then into problems of what the traffic would bear, I suppose. Mr. ROGERS. Is there more or less an understanding among you people who make these recordings that 2 cents is it and that is all, regardless of whether you record it first or whether some other company may record it first?

Mr. RAINE. Well, we know that as soon as it is recorded by one company that everyone else can have it for 2 cents. So you see that has an automatic regulation feature that nobody is going to pay more, if they know that their competition next week will pay only 2 cents. Mr. ROGERS. Have you any information on how many records may have been made of one particular song and the royalties paid of 2 cents each on it?

Mr. RAINE. Yes; I am familiar with our sales figures to a considerable extent.

Mr. ROGERS. What is the extent or the largest number, I should say, of recordings that have been made of one particular song?

Mr. RAINE. Any one popular tune during its popularity would have an excellent sale if it hit a million records by any company or even a million in the aggregate. For those million records we pay 2 cents for every selection, which, I believe, is $20,000, which is hardly a starvation diet. The other side is an additional 2 cents, or a total of $40,000 paid for the record. The same copyright owner might not own both sides.

I would say that a million is a very big sale but 200,000 or 300,000 is quite common for any popular material.

Mr. ROGERS. Well, now, you also testified here that the jukebox playing of records led to greater sales or greater use of that song.

Mr. RAINE. We are sure that is true.

Mr. ROGERS. Well, does not your company first, before you make a record, ascertain or give some thought as to whether or not that is going to be a popular record before you enter into that agreement?

Mr. RAINE. Well, sir, we hire and pay people well to do that. It is very difficult to do. They are what we call our artist and repertoire departments, and we have excellent people in them. But I am sure that we have to make and they have to select a great many tunes, and we hope that their batting average will be high and that we will have a large number of hits.

Of course, you cannot hit every time or every other time.

Mr. ROGERS. Well, you do not go into the recordation field and record a selection unless it has had some appearance before the public, or do you?

Mr. RAINE. Yes; we do.

Mr. ROGERS. You oftentimes do that?

Mr. RAINE. In fact, I think the record companies are the initiation. and the origination of much popular music from the very start even

before it has been heard by anyone and has been printed. It is in script form.

Mr. ROGERS. Now, do you make special records for these jukeboxes as distinguished from the regular phonographic use?

Mr. RAINE. It is my belief that they are all standard manufacture. Mr. ROGERS. They are all standard manufacture?

Mr. RAINE. I think that is true. I know that ours are. I think that is generally true.

Mr. ROGERS. Well then, do you think it would be possible that the field, operating as it does, could have one classification for the jukebox operators and one for home consumption, or is it, as you say, standard and that there could not be a differentiation as far as you are concerned in the manufacturing field?

Mr. RAINE. Well, I don't know that it is impossible. I can see some problems. You would have to have an identifiable record, and it would have to sell for a different price, I suppose. You might run into some price problems. Basically, I think you would end up with about the same result in that you would load a higher price on to the cost of that record.

It boils down to about the same thing, I should think; and the question there is whether the traffic will bear the double load. I think my good friends who have spoken are a little optimistic in thinking that it can carry the double load.

Mr. ROGERS. Do you feel that the 2 cents once paid by your company or the companies that you represent is in some manner compensation to those writers or sufficient compensation?

Mr. RAINE. I think that when you consider the fact that this has a tremendous promotional effect that it is. You couldn't just take one record and say one record, 2 cents, you have been paid. But when you consider the snowball effect of this, which is tremendous, then I think it is fair to say that there is a fair return.

Mr. ROGERS. And that without your part in getting it to the public or getting it made and to the public, they would not receive that 2 cents?

Mr. RAINE. Well, of course, that is true because the 2 cents is based on the number of records we make.

Mr. BRYSON. Are there any other questions?

Mr. HARRIS. May I ask a question?

Mr. BRYSON. Yes.

Mr. HARRIS. In your own statement, Mr. Raine, there is the following:

Coin machines are important and substantial users of popular phonograph records. Important because of the public's wide interest in this kind of entertainment, and because coin machines introduce new, popular music. Substantial, because they use many popular records. If the cost of such records is to jump 50 percent, this source of sales may dry up.

Now, you believe that the increased cost of the records will be approximately 50 percent. "A conservative estimate of the popularity life of a record," you state, "in coin machines is 13 weeks; 13 times the 2-cent payment required by this bill amounts to 26 cents, which represents a 50 percent increase in the cost of the record.”

You further state that this will reduce the phonograph record sales. Do you think that by using a single record, as you apparently do, you

have a fair basis for such a computation? What is the average number of times you can play a record?

Mr. RAINE. Well, you notice, Mr. Harris, that I said "popularity life." Now, the physical life of the record might depend, of course, on how many times it was played. For the popularity of a tune, of course, 13 weeks is an average, but it is probably a fair average and a conservative average.

Mr. HARRIS. Would there not be a number of records employed during the popularity of a tune?

Mr. RAINE. There may be three or more records.

Mr. HARRIS. So that the increase of 50 percent on the cost of the record would be a rather rough figure and should be reduced by the number of records played during the "popularity life" of the tune?

Mr. RAINE, At the very outset it is a very rough figure, but the increase of costs for coin machines must be somewhere in that neighborhood.

Mr. HARRIS. Now, you say in the prepared statement that you submitted to the committee, that:

A charge based on the number of records contained in the coin machine discourages maintaining a large selection. If the proprietor plays safe and keeps only the few sure-fire hits, a lot of good music stays out of the box. The promotion of popular records would be sharply hurt by the impact of this bill. Naturally we are concerned on our own account over the reduction of a large market. A significant quantity of popular records is sold for use in these machines, and unless compelling reasons are advanced for a new burden on sales we intend to oppose such a burden.

Do you think that a royalty based on the number of times a record is performed will meet this objection and not discourage the maintenance of a good selection? Do you think that if you base the royalty on performance rather than on retention you can avoid that reduction in sales?

Mr. RAINE. It certainly meets that point.

Mr. HARRIS. Would you continue to oppose the bill on that ground? Mr. RAINE. Yes; I would oppose the bill surely.

Mr. HARRIS. Even though the royalty is based on performance rather than on retention?

Mr. RAINE. Yes.

Mr. HARRIS. You would still oppose the bill?

Mr. RAINE. Yes.

Mr. HARRIS. Well, I have one last question. Mr. Irving Berlin made this statement: "Only successful records are played in jukeboxes."

That is from his telegram to this committee. Your prepared statement contains an opinion to the effect that popular music is made popular today as much by use in the coin-operated machines as by any other means. The coin machine affords the public an opportunity of choosing what music is to be popular. Will you enlighten us on this apparent conflict of opinion?

Mr. RAINE. The reaction is very fast. They don't put records in then leave them a couple of weeks. It is a matter of day-to-day treatment so that the tunes that seem to show any life are put in, and then of those the selection may channel down to a few, and then that starts to snowball. Then you get your radio, your television, your record sales, and the whole business.