Arts and Sciences and the board of directors of the National Academy of Song Writers and she has recently been appointed to the U.S. Department of Commerce's Private Sector Advisory Council of the National Information infrastructure. Welcome, Ms. Bergman.

Our third witness is Mr. Edward Richmond. He is currently the curator of the UCLA Film and Television Archives. He is a graduate of the University of Cincinnati and holds a master's in film and television studies from Ohio State University.

Mr. Richmond worked his way up from laboratory assistant at the archives to administrative assistant, assistant director, acting director and finally curator. He is the president of the Association of Movie Image Archivists and a member of the Archivist Advisory Council for the Film Foundation. He also lectures and has written several papers on film preservation. Welcome, Mr. Richmond.

Our fourth witness is Mr. Edward Murphy. Mr. Murphy is the president and CEO of National Music Publishers' Association [NMPA].

Prior to assuming his duties at NMPA, Mr. Murphy served as President of the G. Shirmer, Inc., a large American music publishing house. He serves on the advisory board of the International Intellectual Property Alliance and is a member of the International Copyright Panel of the U.S. Advisory Committee on International Intellectual Property.

He founded the International Copyright Coalition and is secretary of the National Music Council. Welcome, Mr. Murphy.

We have written statements from our four witnesses, which I ask unanimous consent to be made a part of the record. And I ask that you all summarize your statements in 10 minutes or less.

I ask that the subcommittee hold their questions of all four witnesses until they have completed their oral presentations. We will begin with the testimony of Mr. Valenti.

STATEMENT OF JACK VALENTI, PRESIDENT AND CEO,
MOTION PICTURE ASSOCIATION OF AMERICA

Mr. VALENTI. Thank you, Mr. Chairman. I think copyright term extension has a very simple, but compelling enticement and that is it is very much in the economic interests of the United States at a time when the words, "surplus balance of trade," is seldom heard in the corridors of Congress, when we are bleeding from trade deficits, and at a time when our ability to compete in the international marketplace is under assault.

Anything that can be done must be done, then, to amplify the ability of American movies and television programs to keep alive their marketing dexterity in other countries around the world.

Europe is already girding its economic loins. They have lengthened their copyright term to 70 years plus life of the author. The Europeans understand all too clearly what the marketplace is all about. And I think in that kind of audiovisual landscape, the United States has to match Europe.

It can do so by extending the U.S. copyright term, which will put our term span on the same level as the Europeans. Europeans have life of the author plus 70 years. That means that we would have

I want to give you four major reasons which command our attention and which certify, I think, the need for copyright term extension.

One, the Berne Convention has a minimum protection time span. And that is life of the author plus 50 years. But, under Berne, any nation can add additional terms if they choose. But-and this is the pivotal point that we have to understand-other Berne countries are obligated only to protect the minimum length that Berne certifies, the life of the author plus 50. They are not required nor would they guard any other country's works beyond what that country puts down as its yardstick for term extension, which means that when we go to Europe with 50 years-70 years, that is life of the author plus 50, or 70 years for works for hire, we would be at a grave disadvantage, that our movies would be in the public domain, whereas the European movies would be fully protected. That is one reason.

Two, the minute that American works go into public domain, in Europe, our revenues that are brought back to this country as part of our surplus balance of trade, which we provision in this country, those revenues would be cut off and they would pass into other hands, not U.S. producers.

Three, American creative works are the most popular, the most patronized, the most sought after, not only in Europe, but all over the world, which is why, and here I have said this over and over again, and maybe about the 28th time somebody will recall what I have said-and that is that the American movie, television program and home video return to this country annually more than $4 billion a year in surplus balance of trade.

If you take all of the products in this country, made or grown, manufactured, or those that leap from the brain pan of people like Marilyn Bergman and others, everything can be matched, cloned, or duplicated by any other country in the world. Argentine wheat and Korean steel and German automobiles and Japanese electronics.

But the one product which at this hour has never been duplicated or matched by any other country in the world is the American movie. It is a trade prize beyond all imagination.

The case for copyright term extension, Mr. Chairman, I believe is that simple. And I am so pleased that 10 of the members of your subcommittee have already cosponsored and I hope that Ms. Wheeler will pass along to Congressman Conyers all of these melodious and triumphant phrases which I am uttering this morning because he has not yet signed on as a cosponsor, and I need to persuade him.

What are the contrary views? If someone comes to me and tries to persuade me, I want to know what the upside and the downsides. are. Some academics plead that the consumer is going to be benefited if there are more public domain works because public domain works would be cheaper, more readily available, and therefore be consumer benefits.

What academics do not know or do not observe is that while an American public domain work may be sold more cheaply to someone, in many exhibitors in many international markets, consumers are not granted cheaper prices, either here or abroad. Not at all.

Why? The theater ticket price remains the same, no matter what picture is showing. I do not know of any home video store that gives you a discount nor do I know of any television station that lowers its advertising rates because it happened to buy a program more cheaply than did its competitors. That is a fact of life.

The academics also assert that when copyrighted works lose their protection, they become more widely available to the public. Again, what the academics do not know are the marketplace realisms which exist. Whatever work is not protected is a work that nobody preserves. The quality of the print is soon degraded. And there is no one around who is going to invest the money for enhancement. Why? Because there is no longer a financial incentive to rehabilitate and preserve because it belongs to everybody and therefore it belongs to nobody.

A public domain work is an orphan. No question about that. No one is responsible for its future life. But everyone exploits its use until that time certain when it becomes soiled and haggard and barren of all of its former virtues. Who then-who then will invest the funds required to renovate it and to nourish its future when nobody owns it?

How does the consumer benefit from that scenario? The answer is the consumer has no benefit. What the academics offer in numbing detail are the arcane drudgeries of graphs and charts and arithmetical lines that cross a page. But the fact is that all of these scholarly works are separated from the real world in which realism exists.

And that brings me now to the fourth reason why it is necessary to extend copyright terms. That Congress can, without reaching into the pockets of any consumer, magnify the revenue curve of copyright owners, which can be delivered back to this country and thereby help, maybe modestly, but nonetheless help in the reduction of our trade deficit, as well as encouraging the preservation and nourishment of what I think is one of America's great, glittering trade prizes, the American movie.

In the global intellectual property world of tomorrow, I think competition is going to reach a ferocity unimagined today. And you have to understand what intellectual property means to this country. The core copyright industries represent intellectual property, movies, home video, books, musical recordings and computer soft

ware.

Together they comprise about 4 percent of our gross domestic product. About $240 billion. They collect some $45 billion in revenues abroad. Their employment rate is growing four times faster than the national economy.

If ever there was a prize that ought to be protected by the Congress of the United States and by this administration, it is this wonderful world of intellectual property in which we are superior and dominant throughout the world.

So I say the Congress ought to equip us with the kind of intellectual property protection we need by extending this copyright term. Otherwise, competition in Europe particularly is going to get skewed against us.

Which brings me now to the singular premise on which this, I

to do is very much and confirmably so in the long-range economic interest of the United States.

And now, since Congressman Conyers has arrived, may I do this all over again, please?

[The prepared statement of Mr. Valenti follows:]

PREPARED STATEMENT OF JACK VALENTI, PRESIDENT AND CEO, MOTION PICTURE ASSOCIATION OF AMERICA

Copyright term extension has a simple but compelling enticement: it is very much in America's economic interests.

At a time when our marketplace is besieged by an avalanche of imports, at a time when the phrase 'surplus balance of trade' is seldom heard in the corridors of Congress, at a time when our ability to compete in international markets is under assault, whatever can be done ought to be done to amplify America's export dexterity in the global arena.

Europe is girding its economic loins. One small piece of that call to arms is that the European Union has lengthened copyright term to 70 years plus life of the author. Europe's planners understand all too clearly how the market works. In that kind of audiovisual locale, the U.S. has to match Europe. It can do so by extending U.S. copyright term to put our term span at the same level as Europe's - 70 years PLUS life of the author or 95 years for works made for hire.

There are Four major reasons which command our attention and certify the need for copyright term extension:

First, while the Berne Convention has a minimum term (life of the author plus fifty) any nation can provide longer terms. But, and this is pivotal, a nation does not have to protect other countries' works beyond what those countries provide for their works. To put it plainly, Europe would not guard American works beyond the American term limit, whereas European works would have longer security and energy in the marketplace.

Second, this means that American works would go into public domain in Europe, thereby cutting off revenues for American copyright owners, and transferring those revenues into

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Third, American creative works are the most globally popular, the most patronized, and the most sought after by exhibitors in theaters, television and home video all over the world. Which is why U.S. movies/TV programs and home video are America's most wanted exports, delivering back to our country more than $4 Billion in SURPLUS balance of trade. Intellectual property, consisting of the core copyright industries, movies, TV programs, home video, books, musical recordings and computer software comprise almost 4% of the nation's Gross Domestic Product, gather in some $45 Billion in revenues abroad, and has grown its employment at a rate four times faster than the annual rate of growth of the overall U.S. economy. Whatever shrinks that massive asset is NOT in America's best interests.

The case for copyright term extension is that simple.

What are the contrary views?

Some academics plead that the consumer would be benefited because more public domain works would find wider circulation at cheaper prices. What academics do not observe or do not know is that while an American public domain work may be SOLD cheaper to exhibitors in many international markets, consumers are NOT granted cheaper prices. Not at all. The theater ticket remains the same price. TV station, home video stores give no discounts to the public. Advertising rates do not come down.

Academics also assert that when copyrighted works lose their protection, they become more widely available to the public. Again what academics do not observe or do not know is a simple