So, we support the extension of the term of copyright, but we would ask that the subcommittee hold hearings on H.R. 1244, the Theatrical Motion Picture Authorship Act, introduced by Congressman Bryant, to explicate the issues surrounding moral rights. Maybe we can find a way to close this hypocrisy gap completely.

THE NATIONAL FILM PRESERVATION ACT

Of course, the DGA enthusiastically supports the reauthorization of the National Film Preservation Act, an act which grew out of our earlier lobbying efforts to enhance film protection.

Without recounting the whole history of this act's passage, suffice it to say that in its initial bill form, it offered elements relating to labeling and preservation. The labeling elements have been dropped, and in fact, picked up in a more extensive way by the Film Disclosure Act.

But the preservation act, as it is presently constituted, continues to do important work, particularly in trying to salvage and restore artistically and culturally important films on the edge of extinction.

The National Endowment for the Arts used to provide some funding for film preservation efforts, but has been forced to abandon these efforts in the face of previous budget cutbacks. Given the Endowment's present peril, it seems extremely unlikely that any of these funds will ever be restored.

So it seems particularly appropriate that the Library of Congress should continue to raise a small banner on behalf of preservation efforts.

The bill before you adds another title to establish a mechanism for preservation fundraising in the private sector in support of the Act's purposes. Given the times, particularly the cutback in Endowment funding, we believe this title is a creative and necessary adaptation if we as a nation are to continue even mincing efforts to save our country's extraordinary film heritage.

These funding efforts are essentially private and voluntary, and government appropriations are only available on a matching basis.

H.R. 1248

Both of these measures concern us, but the bill that has the most import for us is the Film Disclosure Act, H.R. 1248, sponsored in the House by Congressman Barney Frank and in the Senate by Senator Alan Simpson.

This is the third Congress in which a measure similar to this one has been introduced; we intend to persevere as do our legislative friends. This subcommittee has previously taken testimony on a similar bill, but the times and circumstances have changed somewhat, and so we are particularly glad to have another opportunity to raise some issues regarding the bill with the subcommittee.

The purpose of the bill is simple. When a theatrical motion picture has been changed, after its initial release, for viewing on, among other avenues, TV or on a cassette or on an airliner, tell people. Describe succinctly the changes that have been made and give the director, the screenwriter, and the cinematographer a chance to object to these changes if they choose to do so. It is the artistry of the film that suffers through alterations, and so it is only proper, in our view, that the main creative authors ought to have a chance to comment on an altered version. We consider this bill in the vein of consumer protection. When a film is advertised for viewing on television, either the networks or syndicated television, the public is given the clear impression that what they will be seeing is the version they saw, or wish they had seen, in the movie theater.

Our opponents have argued that the viewing public is aware that changes have been made to the film when it is shown on TV. We contend that the argument is preposterous-the viewing public has no idea of the extent to which feature films are routinely cannibalized for TV viewing.

When the rectangular dimensions of a film's theatrical version are squeezed (panned and scanned) into the square format of a TV screen, as much as 45 percent of the visual image is lost. To fit a film into a specified time allotment, usually two hours, substantial chunks of the film are often edited out-not primarily for taking out objectionable scenes of violence or sex, but for fitting in more commercials. Often this gross editing turns a coherent narrative into gibberish. Then you have an insidious process called lexiconning which speeds up scenes (altering the pace of the performances), again in order to fit in more commercials. Finally, among the alterations most common is the one most well known, colorization, in which a computer's colors are added to a film originally shot in black and white.

Obviously, not all of these alterations are made to all films, but a very, very large percentage are subjected to panning-and-scanning and gross editing. Obviously, as

But we are not here to seek your help in ending or deterring these alterations. Absolutely not!

What we are saying is that these alterations are egregious and widespread, and that the public has absolutely no idea of the extent to which movies shown on TV do not reflect the theatrical version they believe they are seeing.

So, as a matter of truth-in-advertising, simply tell the people. Put it another way. Those who oppose labeling are really putting themselves in the position of defending false advertising in the marketplace, hardly a high moral plane from which to

mount a defense.

But leave morality out of this. The real fear about the labeling bill we endorse is that its implementation would somehow cause economic harm to the industry. This is always the argument to which the producers and distributors return.

Firstly, we would advocate nothing that would harm the industry in which we make our living. When movies are shown in ancillary markets, as they must be to recoup their costs, directors get something out of it, thanks to the negotiated residual arrangements. We would not support legislation that negates these arrange

ments.

Secondly, the producers have a long history of wailing how innovations are going to ruin the industry. Television was going to ruin movies; VCR's were going to ruin movies. Now labels are going to ruin movies. Congress should bear in mind this chicken little, the-sky-is-falling style of arguing. If history is any guide, labels ought to increase revenue substantially through the public demand for authentic theatrical versions in ancillary markets.

Thirdly, there currently are a variety of labeling regimes in place and operating, and there is absolutely no evidence that any untoward economic consequence has occurred as a result.

This really is the crux of the matter. Would labels have a negative impact on the production or distribution processes? Based on systems in place, the empirical answer, the answer with any evidence behind it, is emphatically no. The MPAA has produced no factual evidence to support their view. In fact, each time they have warned that their fortunes would be ruined by the institution of a new idea, exactly the reverse has turned out to be true.

The subcommittee is aware that the MPAA companies instituted a voluntary labeling system a few months ago relating to the release of new (and altered) feature films into the ancillary markets.

From our point of view, these labels are totally inadequate and misleading. They do not provide information succinctly as to what changes have been made in a film, nor do they provide an opportunity for a director, cinematographer, or screenwriter to object if he or she would choose to do so.

Let me give an example. When a movie has been edited, the company label states that the film "has been edited for content." Clearly, the implication is that the violence and sexually provocative scenes have been deleted in conformance with family viewing sensibilities.

But this is the phrase applied to editing, period. Family movies, where there is no violence or no sex scenes, bear the same label. If the company labels are crafted to be so manipulative, much better not to have them at all. Consumers are being gulled when we ought to play it straight.

What is wrong, or what untoward economic consequence would flow from saying "five minutes have been deleted from this film"? There is nothing to be afraid of on any level from telling the truth, and that is what the Frank-Simpson bill is all about.

Let me also point out that the labeling regimes adopted by Turner Entertainment on their colorized films or the American Movie Classics cable channel have not and do not harm in any way the marketing and distribution of films.

(Turner Entertainment adamantly opposed the original adoption of the National Film Preservation act because of its labeling provisions. Within weeks of passage, and before the Library dropped these provisions, Turner began running labels on all its colorized films, again doing no discernable marketing damage whatsoever.) Let me also point out that the MPAA companies lobbied the FBI successfully so a very official looking label warning of piracy infractions goes on cassettes. So the opposition by the MPAA to official labels is pretty selective.

Why do we need a law? Why can't we sit around a table in Hollywood and work this out?

We tried. And we failed. We failed because we wanted the labels to be clear about the alterations that were made, and because we wanted an artistic author's disclaimer.

And we failed because in a very important regard the MPAA could not deliver on a promise it made to Congress in encouraging voluntary discussions.

The MPAA had said that any agreement we reached would be embraced by copyright holders and distributors across the board. They could bring them along, so they said.

They couldn't; they haven't. And this was one of the main reasons we were reluctant to begin talks in the first place. As a matter of fact, when we began voluntary negotiations, there was an explicit commitment that the networks would go along with whatever emerged from the talks.

When the talks broke off, the MPAA said to us and the other creative guilds sitting around the table, they would simply go ahead and implement the label they found satisfactory and we did not.

But that is not the label presently appearing on a few feature films because the networks, for whom the MPAA was supposedly acting as a good faith surrogate, objected. The networks forced the MPAA to make a bad label even worse. As we said, the MPAA can't bring all the players to the table; the table isn't big enough.

In any case, Congressman Frank and Senator Simpson have set out to make the American public aware of changes made in films-not a few films, as is the case through the MPAA labels, but the 20,000 films in domestic circulation. Film ownership and distribution is in many hands; only some of which are MPAA companies. The simple and indisputable fact of the complexity of the universe of film ownership and distributorship is the reason for legislation. Only a national commitment to inform film consumers will bring all firm copyright holders and distributors under the tent of disclosure.

We would argue that the time for notices on films, such as the labels we support, is more important now than ever before. The new digital revolution quickly unfolding before us provides greater and greater opportunities for manipulating entertainment and information products. Film labels are nothing more than certificates of authentication that something has been changed from the original version you were expecting.

When movie industry officials-and government officials-press the Europeans to let our film and television programs pass freely into their countries; when we press China to put a stop to the theft of our films-we hear that all of this is done in the name of America's film artists. It is they, we hear, who are being denied the rewards of their labor. It is they who craft the artistic and cultural products that are craved in foreign markets.

Would that the producers would take the same line in this country as they take abroad. We believe that rhetoric that films are an art form, created by artists, and that they are our best and most ubiquitous ambassadors of the American way of life.

We don't believe the producers should play the violins of pathos about American film artists when it suits them abroad, only to stand adamantly against a respectful regard for films and film artists in this country.

Telling consumers what changes have been made in a film, giving directors, screenwriters, and cinematographers a chance to object, is a small increment of respect.

Ms. COOLIDGE. And I believe I am supposed to introduce Mrs. Henry Mancini.

Mr. MOORHEAD. Without objection, the documents are made a part of the record.

Ms. COOLIDGE. May I do that?

Mr. MOORHEAD. Yes.

[See appendix, p. 503.]

Ms. COOLIDGE. Mrs. Henry Mancini has a very short statement. Mr. MOORHEAD. Go ahead.

STATEMENT OF MRS. HENRY MANCINI

Mrs. MANCINI. I will be very, very brief.

I am the widow of Henry Mancini who passed away last year, and I am here to just point out to you that the body of work that he left is certainly woven into the fabric of the international music landscape. I urge you to pass the legislation that extends the copy

And, with that, I won't take up any more of your time. Thank you very much.

Mr. MOORHEAD. Mr. Eves.

STATEMENT OF JEFFREY P. EVES, PRESIDENT, VIDEO SOFTWARE DEALERS ASSOCIATION, ON BEHALF OF THE COMMITTEE FOR AMERICA'S COPYRIGHT COMMUNITY

Mr. EvES. Good morning, Mr. Chairman. My name is Jeffrey Eves. I am president of the Video Software Dealers Association, an international trade association for the home video entertainment industry.

VSDA's 3,000 member companies represent some 20,000 video stores and provide more than 500,000 jobs nationwide, and I appreciate the opportunity to share our views with you on this important matter this morning.

I am here this morning on the behalf of the Committee for America's Copyright Community. We are a group of industries that work together to protect the flourishing U.S. copyright system from socalled moral rights legislation.

We believe moral rights laws, such as the film labeling legislation that you are considering today, would disrupt a legal regime that is working well for copyright owners, for distributors, for American consumers and for the U.S. economy.

Today I will focus my remarks on the film labeling bill and its impact on the people that I represent, the men and women who manage and run tens of thousands of stores where American consumers rent and purchase prerecorded movies on videocassette.

Mr. Chairman, the American consumers vote with their pocketbooks every day. They have made home video their No. 1 leisure time activity and their top choice for viewing movies. Last year, American consumers spent $14.5 billion renting and buying videos, almost three times what was spent to acquire and purchase movie theater tickets. In fact, each week over 60 million people in the United States visit a video store-60 million people a week.

You are all probably familiar with the typical video store. As you know, it is an environment that lends itself to conversation. People discuss whether a movie was good or bad, whether an actor was right for the role, whether the movie was as good as the book. I can assure you that you will not hear debates on the issue of film to video adaptation, which is the essence of the moral rights dispute raised by some members of the creative community.

Consumers love the low cost, variety, and convenience offered by home video; and they know the experience of watching a movie in their living rooms is different from watching it in a darkened theater. Consumers do not need a warning label to tell them that, and video dealers do not need a disparaging label that seems to discourage renters from renting and buying movies on video.

I do not mean to take anything away from the creative geniuses that are involved in the movie-making process. In fact, in response to concerns raised by proponents of this legislation, the motion picture industry adopted a voluntary film labeling program in 1993. The voluntary program, which calls for labeling of both the video and the video package, has been a great success. In fact, we recently reviewed the top 40 video rentals listed in the May 13th edi

tion of Billboard magazine and found that 90 percent of them were in compliance with the voluntary labeling program.

The voluntary label in use today informs the consumer without disparaging the video product. It says: "This film has been modified from its original version. It has been formatted to fit your television set." And I will show an example or two of that in a minute. This voluntary labeling system applies to home video, cable, payper-view, broadcast television, and every other medium. It is likely that the film that was shown on your flight from Washington to Los Angeles was labeled under this system.

In our opinion, the legislation before you is a quintessential example of unnecessary Government regulation. Congressman Frank's bill represents Government intrusion into a marketplace that is working successfully for the industry and for the consumer. This legislation, Mr. Chairman, would seem to have all the characteristics of a solution in search of a problem.

While the supporters of this legislation may quarrel with the precise wording on the voluntary label, that does not mean that Government needs to step in in this case. This is an issue that the industry can and should resolve on its own.

The labels included in this legislation would mislead consumers by making it appear that they are getting an inferior product when they buy or rent a video. Under H.R. 1248, if an artistic author objects to any alterations, pay-per-view, cable, and network television broadcasters would be required to note the objection in a signboard warning at the beginning of the film. The home video release would carry the additional burden of permanently noting the objection not once, but twice, on the video boxes which serve as the primary means of marketing the video product.

Mr. Chairman, I would like to take a moment and show you a video that demonstrates the voluntary labeling program that I have been speaking about. I will show you several labeling examples, including home video, broadcast television, and pay-per-view; and I will compare these labels to the Government mandate label for automobiles. I think you will see how much more effective the voluntary labels are when compared to the Government-mandated label.

If you will play the tape, the first clip is taken from the home video of Disney's "Angels in the Outfield." As you can see here, the label is in legible type and displayed in a conspicuous and readable basis.

The second example comes from a Universal film, "The River Wild", with Meryl Streep.

Mr. BERMAN. Is this on TV or video?

Mr. EVES. This is on videocassette. Again, this clip comes from a video; and it is available in stores all over the country.

Next, I would like to give you a couple of examples of how these labels appear on the home video package. I have copies of a couple of movies here, and I think you may have copies of this as well. And you will see the labeling in both cases appearing on the back side of the videocassette.

It says: "The film has been modified from its original version. It