copyright system and thereby works to diminish the

quantity and diversity of new creations that can be offered to the public.

-

to reproduce a copyrighted work belonging to the

owners of copyrights in sound recordings and musical works. Without any compensation, home taping is nothing more than a "home taking" of private property.

detail.

We next discuss each of these points in more

A. The Constitutional Basis of
Copyright Protection

In considering the issue of home taping, it

is important to bear in mind that our American copyright system is based not merely upon statutory enactment

but upon the United States Constitution itself. Article One, Section Eight of the Constitution authorizes the

Congress:

"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."

"The economic philosophy behind the
clause empowering Congress to grant
patents and copyrights is the conviction
that encouragement of individual effort
by personal gain is the best way to
advance public welfare through the
talents of authors

27

In other words, the purpose of affording

copyright protection is both to reward the creator and to encourage the production of literary and artistic works for the public benefit. As the Supreme Court has put it:

But

"The immediate effect of our copyright
law is to secure a fair return for
an 'author's' creative labor.
the ultimate aim is, by this incentive,
to stimulate artistic creativity for
the general public good. 'The sole
interest of the United States and the
primary object in conferring the
monopoly . . . lie in the general
benefits derived by the public

the labor of authors.28blic from

The musical arts in our country have flourished under this system, and as a result, the consumer has enjoyed

27/

Mazer v. Stein, 347 U.S. 201, 219 (1954).

28/

Twentieth Century Music Corp. v. Aiken, 422 U.S.

151, 156 (1975).

96-601 0-82--48

classical and jazz to rock and country, from ethnic

and gospel to soul and reggae.

Pursuant to the Copyright Clause of the

Constitution, the Congress has given copyright owners of musical compositions and sound recordings the exclusive right to control, and obtain royalty payments for the use of, their creative works. Among these exclusive rights is the right to control the reproduction

of their copyrighted musical works and sound recordings.29/

As discussed more fully in Section III, above,

uncompensated home taping infringes those rights.

In understanding just why the copyright system

is so essential to the recording industry, it is important to remember that the recording business is exceedingly risky. More than 80 percent of all records released fail even to recover their costs. On average, a company must sell almost 150,000 copies of a popular LP just to break even.

It is the copyright system that makes it possible for record companies and other creators to bear these

29/ 17 U.S.C. § 106(1).

enormous risks and bring to the market an extraordinary variety and quality of musical offerings each year. Under that system, record companies are able to rely on the revenues derived from their ownership of the copyright in the occasional hit to subsidize the more than 80 percent that are losers, the recording of new unknown artists, and the release of special music (such as classical, jazz, ethnic, and gospel). In this way

the copyright system not only enables the industry to survive, but also encourages experimentation and the promotion of unknown talents. It thereby ensures the availability of a broad variety of music.

Certainly, at a time when we are witnessing

a decrease in public funding for the arts, the copyright system plays an even more vital role in fostering the production of new creative works. If the arts are to be self-sufficient, then Congress must ensure that the marketplace operates fairly and that copyright owners can obtain fair compensation notwithstanding

technological developments.

Unless the home taping issue is resolved in such a way as to guarantee fair compensation to those whose intellectual property is now being appropriated in massive amounts, the recording industry will be unable

41

to continue to bear the enormous risks of the

marketplace. It will not be able to subsidize specialized forms of music or promote the variety of unknown artists and songwriters it has in the past. In the final analysis, the practical consequences of uncompensated home taping will be detrimental to everyone, including home tapers who will have less and less new material to tape and the large number of Americans (indeed the vast majority) who do not tape, but who buy records. By siphoning off revenues, home taping will not only force record prices higher, but will also cause further diminution in the quantity, quality and variety of music available to the public.

B. The Importance of the Property
Interests at Stake

Musical compositions and sound recordings are, of course, a form of property. Like any other form of property, whether tangible or intangible, its owners possess the fundamental right under our constitutional system to preclude others from interfering with it. Home taping subverts that essential characteristic of copyright ownership. And that is not in anyone's interest. As the Register of Copyrights, Mr. David Ladd, has aptly said: