other provisions of 506(a). Indeed, the legislative history of the record piracy legislation indicates that Congress feels that record piracy is of greater societal concern than other infringements. Therefore, the Department of Justice proposal to provide at least an equivalent term of imprisonment is fully justified. 4. Section 506. Destruction of Infringing Articles.-Finally, we urge the inclusion of the amendment to Section 506 noted on pages 24 and 25 of the Department of Justice testimony. Although we believe a reading of the present copyright law may permit the Government to destroy infringing articles, this has been a matter of some debate. Therefore, the Government powers should be made explicit. This would preclude the necessity of the recording industry filing expensive and essentially superfluous-civil suits to permit the destruction of infringing articles after the Government has successfully concluded its criminal prosecution. Mr. GORTIKOV. Gentlemen, I am president of the Recording Industry Association of America. Our member companies create and market about 85 percent of the recorded music sold in the United States. We strongly object to the proposed mechanical royalty rate increase in section 115. The mechanical royalty is the amount of money a music publishing company can charge a recording company for the use of a composer's tune in a sound recording. Section 115 proposes a statutory increase for mechanical royalty from 2 cents to 3 cents. This increase is glossed over as "only a penny" increase. However, that seemingly innocuous penny involves added payments of about $47 million per year to the music publishing industry, which is an increase of 59 percent. The $47 million "penny" payment is the biggest money issue in this bill, and it is the major commercial and consumer question before this committee. It is more than 11 times greater than the $4 million annual payment by jukeboxes provided in section 116. It is more than seven times greater than cable television's hotly contested payments to broadcasters of $6.7 million per year. And it is almost five times greater than the estimated $10 million for performance royalties to recording vocalists, musicians and record companies. It is actually more than twice all of those payments combined. The economic facts, to be detailed by the next witness, show that there is no reason for an increase. Music publishers and composers are doing handsomely at the present rate. Their income from mechanical royalties alone has more than doubled in the past 10 years because of increased sales, which more than offsets inflation. Significantly, in the 10-year debate over copyright revision, up to today and including today, the publishers have not presented any profit data that would justify an increase. This morning I scanned the material that the publishers are offering into evidence here, and, once again, incredibly, there is not a shred of profit information as to how well or how poorly they are doing in that mass of material they are going to offer. Yet, with no such supportive documentation to date, they ask for an additional $47 million per year. The text of their presentation-they are asking even for 4 cents, which will be $94 million a year. That proposed penny increase in itself is inflationary and will stick the public with an increase in record prices of almost $100 million per year at 3 cents, and $200 million at 4 cents. That penny increase is punitive, both to our industry and to the consumer. It will impose harsh burdens on small, fledgling record companies. It could further discourage the already risky business of recording classics, jazz, and experimental music. Moreover, the public interest is being well served at the present rate. There is no monopoly on music, and plenty of music is available to the public. And these originally were the major congressional objectives in establishing the compulsory licensing system and the 2-cent rate. The basic case of the publishing industry boils down to the statement that a 2-cent rate established way back in 1909 cannot possibly be adequate in 1975, and that "only a penny" increase is involved. However, as we shall demonstrate, that 2 cents is far different from what it was in 1909. This is a piece of music. It is a tune. Every time-peculiarly, it has a recording artist's picture on the front, not the composer. Every time a recording company arranges for an artist to record this tune, the record company must pay the music publishing company and composer a mechanical royalty for every record sold. This rate was set in the copyright statute at 2 cents. This royalty was called mechanical because the state of the recording art at the time utilized the mechanical parts, such as a piano roll or later a one-tune Edison wax cylinder, such as this one here. So 2 cents was paid for one tune, and one tune comprised a recording. Recorded music next moved into a one-sided disk, like this one, one tune and one side. And, again, one tune comprised a recording. Now started the changes which benefited music publishing companies and composers so dramatically, with no additional risk or effort by them. First came the two-sided 78-rpm, 10-inch disk, which gave the publishing company and the composer 4 cents, not 2 cents, from the sale of one record. Then in 1948 the vinyl long-playing album was developed, with 10 to 12 tunes on 1 disk. Publishing companies and composers earned 20 to 24 cents per disk, not 2 or 4 cents. Mr. WIGGINS. Excuse me, Mr. Chairman. In the album which you have in your hand, is there only one composer involved, or are there multiple composers? Mr. GORTIKOV. There are probably multiple composers involved. There are multiple composers involved. Mr. WIGGINS. You are speaking of the aggregate payment? To the composer, it may be 2 cents. Mr. GORTIKOV. The individual payment to the composer and publisher may be 2 cents, yes. The aggregate income would be 20 to 24 cents. Finally, the ingenuity and risk capital of recording and equipment companies developed the eight-track tape cartridge and cassette. These created an entirely new market- about 29 percent of the total record sales, each earning 20 to 24 cents for the publishers and composers, not 2 cents. In addition, publishers and composers receive multiple income from the recordings of one composition. I am holding a list of the current recordings of a familiar hit song, "By the Time I Get to Phoenix", which was made famous by Glen Campbell. This shows 81 separately produced records of that song from the United States alone, not foreign-81 separate sources for that 2 cents to multiply. "Bridge Over Troubled Waters", made famous by Simon and Garfunkel's recording, has 80 current separate recordings, and Paul McCartney's hit record Witnesses-Continued Peer, Ralph, vice president, Peer-Southern Organization; director, Quayle, Donald R., senior vice president for broadcasting, Corpora- Page 1645 859 Prepared statement..... 863 Raskind, Leo J., representing the Association of American Law 272 Prepared statement.... 269 Ringer, Barbara, Register of Copyrights, Library of Congress.. Sandler, Jack B., chairman, Government Relations Committee of the Book Manufacturers Institute, Inc.. 1695 Prepared statement... 1697 Sheppard, Dr. Walter, representing the Association of Public Radio 1757 Simon, Gerald A., managing director, Cambridge Research Institute. 1401 693 Prepared statement.... 690 Smith, Eric H., associate general counsel, Public Broadcasting 859 Prepared statement.. 865 Steinbach, Sheldon E., staff counsel, American Council on Education.. 268 1663 Prepared statement.. 1666 Summers, John B., general counsel, National Association of Broadcasters... 777 Prepared statement. 774 Tegtmeyer, Rene D., Assistant Commissioner for Patents, Department of Commerce.... 163 Prepared statement. 159 Valenti, Jack, president, Motion Picture Association of America, Inc., Van Arkel, Gerard, general counsel, International Typographical 704 705, 761, 1731 1694 Prepared statement.. 1668 Wally, I. Alan, president, Record & Tape Association of America... 1238 1251 Wasilewski, Vincent T., president, National Association of Broad Wicks, David O., Jr., Becker Communications Associates. 598 Prepared statement. 607 Wolff, I. Sanford, the American Federation of Musicians (AFL-CIO), and the American Federation of Television and Radio Artists (AFL CIO) 1298 Prepared statement. 1298 Won Pat, Hon, Antomo Borja, a Representative in Congress from the Territory of Guam 1717 Zimmerman, Thomas F., first vice president, National Religious 1743 Prepared statement 1743 Zurkowski, Paul G, president, Information Industry Association 340 Prepared statement 332 Add:onal material A davits and letters concerning licensing of copyrighted products to American Broadcasting Companies, Inc., prepared statement.. American Gaald of Authors and Composers and the National Music Page 743 178 827 252 1586, 1641 Amenean Society of Composers, Authors, and Publishers, prepared 925, 947 hener Andrew, director, Legislative Department, AFL-CIO, letter 1335 849 389, 962, 9653 koma, Aaroni, president, International Typeface Corp., letter dated J. 29. 1975, to Hon. Robert W. Kastenmeier 1020 "Care Television Under the 1972 Rules and the Impact of Alternative Gorght Fee Proposals," by Bridger M. Mitchell 517 Care Hebert W, American Chemical Society, letter dated June 25, 1975 to Hon. Robert W Kastenmeier. " nanghtability of Typeface and Type Font Design," statement of ta Anchorage, Alaska, letter dated July 9, 1975, to Hon. Peter W. Daza Hal C, president. American Federation of Musicians, letter Fest Levard, National Mic Publishers' Association, Inc., letter 243 1228 215 1658 1194 689 1631 erse agreement, restaurants, taverns, nightclubs, and simi Harrin Jansen A, president, National Education Association, pre • arroj statement **** J. 'n B, chairman, Advocate for the Arts Association lovarma 6, RN, Wrangell General Hospital, Wrangell, Alaska, 263 385 274 263 213 Kevin J. general counsel, Federal Labrarianis Associati- n, 12-1 statement 262 Fraz & Premre, er mposer, prepared statement 394 an Bernard general en tinel, American Nucarty of C 11,5 = nory, ad Parbers, letter dated Aigist 6, 1975, to Hn FW haste timeier Additional material-Continned Marshall, Nancy H., director, Wisconsin Interlibrary Loan Service, Mathews, Hon. David, Secretary, Department of Health, Education, Mercer, Johnny, composer, prepared statement.. Nathan, Robert R., president, Robert R. Nathan Associates, Inc., 215 261 381 1054 1640 825, 1385 Nimmer, Prof. Melville B., professor of law, UCLA School of Law, Norwood, Frank W., executive secretary, Joint Council on Educational Parker, Michael, director, Typographical Development Mergenthaler Passano, William M., chairman of the board, Williams & Wilkins Co., Rayin, Mona (R.N.), instructor coordinator of R.N. Programs and 920 1038 883 1041 260 214 1017 1016 statement.. Ruck, Don V., vice president, National Hockey League, prepared Ringer, Barbara, Register of Copyrights, letter dated June 6, 1975, to 1008 813 Times Mirror, prepared statement.... "The Great American Rip-Off," by Mike Terranova, a pamphlet Stevens, Hon. Ted, a U.S. Senator From the State of Alaska, letter Schrader, Dorothy M., General Counsel, Copyright Office, prepared 1015 1639 207 1265 852 Valenti, Jack, president, Motion Picture Association of America, Inc., "Typeface Design Protection," statement of position of the American 1226 September 10, 1975. 1724 November 7, 1975... Wigron, Harold E., National Education Associations.... Wally, Alan L, president, Record and Tape Association of America, Vanantwerpen, F. J., president, Council of Engineering and Scientific 1736 369 1263 367 Woodriff, Dr. Ray, Department of Chemistry, Montana State University, prepared statement... 276 265 Young, Hon. Don, a Representative in Congress From the State of Appendixes Teleprompter Corp. memorandum on Constitutionality Appendix 2 214 1917 2051 2092 2124 |