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year-1964. I stated that is absolutely arbitrary. Gabriel said, “George, I am sorry
*** it's a different ball game now. The new president insists." Meeting after meeting was held with the officials of BMI. BMI would accept no offer that was not based on a percentage. We pointed out that 1 percent of the gross to BMI would
be followed by 1 percent to ASCAP and showed that 2 percent of the gross could be as high as 20 percent of the net, and, on occasions where losses were sustained, would be particularly heavy. The enclosed summary was prepared at the request of Mr. Gabriel for presentation to President Burtonexhibit M.
While President Burton expressed sympathy, he would not in any way alter his insistence on a percentage formula.
As a member of the International Association of Amusement Parks, I felt it incumbent to report on the developments in the music royalty field. My notes of November 27, 1964, show that following which was later transmitted by me to the association:
The real peril to everyone lies in the fact that a copyright act poses a minimum penalty of $250 per infringement. In other words, if amusement park A plays 100 different BMI tunes and has not signed a license with BMI, it could be sued in any court on the basis of the minimum, which would be $25,000-$250 times 100.
While all of this was going on with BMI, we received exhibit N from ASCAP. To this day this license was not signed for the Beatles' concert nor was any fee paid to ASCAP. We have met repeatedly with the representatives and asked for the names of ASCAP songs performed during the concert, and to date we have not received any.
I answered Mr. Kane per exhibit O. Meetings, telephone calls, and many trips took place during the winter with a group of concert managers who were most intimately involved in the BMI suits. The only effectiveness that we had with BMI was inferring that we hoped to raise money for a countersuit under the antitrust laws. Even so, BMI, under Burton, showed virtually no concern.
We explained that if BMI got its one percent now, it would seriously damage the concert field and many others, including parks. We asked what would prevent BMI from asking 2 percent in the near future? Gabriel said:
We wouldn't do that *** that would be unreasonable.
You have no qualms about raising the rate 2,500 percent now, but you state that out of reasonableness you would not raise it 100 percent in the future. This is not very consistent.
Where this would have ended cannot be guessed because in late March President Burton died suddenly. After this, we met with Mr. Gabriel and the concert managers worked out a schedule of fees based upon the number of seats in each auditorium. This was accepted by the concert managers and is now in operation and is enclosed here as exhibit O.
Actually, that was not reproduced, but I have it here. It sets up 12 categories of sizes of buildings, establishes fees per buildings in terms of the number of seats in the building.
Mr. TENZER. Mr. Chairman, are you accepting that into the record ? Mr. St. ONGE. We will receive it for the file.
Mr. HAMID. As we sit here, the Steel Pier has not negotiated a contract with BMI for the 1965 season. It is operating under a letter of consent dated April 7, 1965.
For your information, I am including a paragraph from the National Ballroom Operators News Letter of November 17:
The situation with ASCAP is not an easy one * * * they are making almost impossible demands-simply wanting more money. They want to include the inside sales, claiming it is their music that brings in the customers, et cetera. We have not been idle; we have been fighting and trying to make ASCAP see reason. We are considering going into court and obtain a court order under the consent decree.
In conclusion, as we sit here, I do not know what tomorrow may bring or what next year may bring. Under the statute being considered, if my mail brought a letter from BMI revoking its consent, my company would be faced with one of three alternatives :
(a) Signing a BMI license no matter what its terms might contain.
(b) Eliminating the use of BMI music, which would force us out of business.
(c) Continue to operate using BMI music with the knowledge that we have infringed. According to section 506, I would be facing a fine of $2,500 and/or imprisonment of 1 year.
These are desperate alternatives. What makes them even more desperate is the fact that we, the buyers of theatrical talent, have no control at all over the copyrighted works that are used. In many cases the artist uses works created by himself. In no other business in the world is the buyer asked to pay for the copyright used by the seller. In the purchase of a car, the purchaser is not required to pay for the patents. This is the supplier's responsibility.
Yet in the case of music royalties, the supplier (the performer) is somehow relieved of the obligation to pay for the copyright costs of the material (songs) he uses. The songs are the tools of the musician's trade, yet the buyer is assumed to be responsible for the payment for these tools. For example, Paul Anka has played Steel Pier four different times. He composes his own songs, then carefully selects his material in the order that will create the most appealing act. He would not (and should not) allow the many buyers for whom he works to control the selection of his songs.
Thus, if we are to employ Paul Anka and the hundreds of other acts we employ, and we are held liable for copyright fees, amusement operators cannot escape the copyright monopolies and remain in business.
In conclusion, I will quote from page 137 of the supplemental report of May 1965: * * * copyright owner groups
* * pointed out that suits against genuinely innocent infringers are quite rare. * * * They maintain that $250 * * * does not represent an onerous amount, *
The very statements of the copyright owners thus demonstrate that the infringers, even innocent ones, are at the mercy of their benevolence.
On page 134 we read:
Constant reminders of the trouble that careless legislative drafting can cause for future generations arise under the provisions dealing with damages and profits * * *
The report itself is quick to point out the dangers inherent in this law.
Legislation created in this mighty Congress has always considered the rights as well as the jeopardy of all concerned. To place the many thousands of small amusement businessmen at the absolute mercy of the copyright monopolies will be to ultimately drive them out of business.
(Mr. Hamid's exhibits follow:)
LAS VEGAS, Nev., January 23, 1965. Mr. GEORGE HAMID, Jr., Atlantic City Steel Pier, Atlantic City, N.J.:
Executive committee voted unanimous association cooperation to music royalty committee. I appoint Joe Malec, Sr., as chairman and George Hamid, Jr., as vice chairman. Please contact Blundred regarding your desires.
JULY 28, 1964. Mr. GEORGE HAMID, Jr., Atlantic City Steel Pier, Atlantio City, N.J.
DEAR MR. HAMID: Please be advised that the BMI public performance license fee for live musical attractions as of July 1, 1964, is 1 percent of gross box office receipts from admissions, excluding all Federal, State, and local taxes, as well as bona fide ticket refunds.
It is our understanding that you are sponsoring the performance of the Beatles at Convention Hall, Atlantic City, N.J., on the evening of August 30, 1964. Any performance of BMI-controlled music on that evening without our permission will be an infringement of the rights granted to copyright holders by the Federal copyright law.
The repertory used by the Beatles in previous performances throughout the United States indicates that a preponderance of their material is licensed through BMI.
In order that the music we control may be legally performed, we are enclosing two copies of our license agreement. Both signed copies should be mailed to this office for execution. May we hear from you without delay. Very truly yours,
BROADCAST MUSIC, INC.,
JULY 13, 1964. BMI, New York City, N.Y.
GENTLEMEN : The Atlantic City Convention Hall is licensed for the perform-
ATLANTIC CITY STEEL PIER,
BROADCAST MUSIC, INC.,
New York, N.Y., August 5, 1964. Mr. GEORGE A. HAMID, Jr., Atlantic City Steel Pier, Atlantic City, N.J.
DEAR MR. HAMID: We acknowledge receipt of your letter of July 31, 1964, which was in response to our's of July 28, 1964.
Our files show that the Atlantic City Steel Pier is licensed for the public performance of our copyrighted music. However, Convention Hall, Atlantic City, is not licensed by BMI.
We therefore would appreciate hearing from you further in regard to the license agreement forms provided for the Beatles performance at Convention Hall on August 30, 1964. Very truly yours,
EUGENE COLTON, Regional Supervisor.
AUGUST 13, 1964. Mr. EUGENE COLTON, Regional Supervisor, BMI, New York, N.Y.
DEAR MR. COLTON : Thank you for your letter of August 5, indicating that the Atlantic City Steel Pier is authorized to perform your BMI music.
The performance of the Beatles is being promoted and paid for by the Atlantic
ATLANTIC CITY STEEL PIER,
BROADCAST MUSIC, INC.,
New York, N.Y., August 14, 1964. Mr. GEORGE A. HAMID, Jr., Atlantic City Steel Pier, Atlantic City, N.J.
DEAR MR. HAMID: In my letter of August 5, 1964, I endeavored to clarify the situation regarding the forthcoming Beatles performance at Convention Hall, Atlantic City. Since I have received your letter of August 13, 1964, it is obvious that further clarification is necessary.
The agreement we hold with Abel Holding Co., Inc., is limited specifically to the premises of the Atlantic City Steel Pier. If you will refer to your copy of your BMI license agreement dated September 28, 1960, you will note that such limitation is clearly defined and in no instance can be interpreted to include performances of our music in other premises.
I am therefore repeating my request that you return the signed license agreement forms previously provided for the Beatles concert, August 30, 1964, to take place at Convention Hall, for which you are presently unlicensed.
I trust we will hear from you again without undue delay so that we may pro vide you with the proper legal authorization to cover the public performance of the copyrighted music we control during the Beatles concert. Thank you for writing. Very truly yours,
EUGENE COLTON, Regional Supervisor.
AUGUST 17, 1964. Mr. EUGENE COLTON, Regional Supervisor, BMI, New York, N.Y.
DEAR MR. COLTON : Your letter arrived in today's mail.
I am hastening to reply because I am sure Mr. Hamid would like me to do so to inform you that he is presently in Elmira, N.Y., staging the Elmira Fair. He will be back the latter part of the week. Sincerely yours,
ATLANTIC CITY STEEL PIER,
MARGARET M. GABTLAND, Secretary to Mr. George A. Hamid, Jr.
NOVEMBER 4, 1964. Mr. GEORGE GABRIEL, Vice President, BMI, Nero York, N.Y.
DEAR MR. GABRIEL: In reference to your letter of October 21, we cannot accept the termination of your agreement on the basis of your letter. We have had a reasonable relationship during the period of this license and feel that we have conducted our operations in good faith.
For you to expect us to pay 1 percent of the expenditures for services of performers and musicians on the Steel Pier would be unrealistic. First of all, many of the musicians and performers use no BMI music, or a minimum, while others may use more.
Secondly, the number of BMI songs performed bears no releationship at all to the amount of money expended. For example: Bobby Darin might get $20,000 a week to sing eight songs while an unknown singer might sing the same eight songs and receive only $400. While songs are necessary for the performance, they do not create the talent price nor the box office value.
As you well know, we could take the five most popular BMI numbers and announce on our marquee that they were going to be sung by a local chorus and the numbers themselves would not draw a scattering of people through our box office. Yet, we could take five far less popular songs and announce that they were going to be sung, in person, by Frank Sinatra and the public would swarm through our turnstiles.
In summary, there is no logical relationship between the amount of money spent by us for talent and the license fee to be paid. As you can see, if we paid all licensing agencies a percentage of our talent cost, we would be unwise to buy expensive attractions. Without me doing the arithmetic for you, you can see the penalty that would be imposed upon us for buying expensive attractions,
Further to the foregoing, you are aware, I am sure, that we buy many animal acts, many comedians who use either no music or an absolute minimum, and a large number of big sight acts in the acrobatic field. The values of these acts bear absolutely no relationship to the music licensing fee.
I am sure that upon reflection and study, you will agree that such a licensing arrangement woulā be impractical for the Steel Pier. In view of our amicable relationship, I believe we would be well off to continue it on the past pleasant basis. Sincerely yours,
ABEL HOLDING CO., INC.