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understating the case, "the pricing of records in other nations is more orderly." You mean cheaper.

Ms. RINGER. No. They are more expensive actually, and they do have cartels there. I think I use the word correctly. Records have traditionally been cheaper in the United States than anywhere else. But there has been all of this discounting and clubs and all of this sort of thing where to try to fix in on a price to take a percentage of is very harrowing.

Mr. DRINAN. Well you tell us to go ahead without any evidence whatsoever in my mind, and you say, at page 45, it is obviously much too late in the game for Congress to undertake the kind of thorough going review urged by the Knight report. Well, I like to think that we are going to make a judgment on some evidence, and you just say it is much too late. Why is it too late! Let us postpone this until we get some evidence.

Ms. RINGER. By postponing it, you leave the fee at 2 cents. That is a big problem, and I think that most people would agree. Most people, not the record industry, but most people would agree that this is too low.

Mr. DRInAn. Well, then you try to help us and I appreciate your testimony. You say here that you are not opposed to a 4 cents minimum rate, et cetera, but you are not opposed to something else either, but I am troubled by what you tell us here on page 46: In a typical case the individual authors of a song will divide 1 cent per record, or $1,000 for a hit record selling 100,000. Well, the record companies are making a bonanza.

And the whole point of the copyright law, as I understand it, is to enhance creativity, to reward the author or the composer. So I see frankly a deliberate frustration of the basic purpose of the copyright law as the Founding Fathers inserted it. So why should I go along with a system that does that?

Ms. Ringer. The system was established in 1909 under unfortunate circumstances. I think clearly if Aeolian had not gone around buying up copyrights, we would not be facing this problem now. But we have to look at the problem. We have got 60 years down the road, and we have got a structure that revolves around this. I am not defending it, do not misunderstand me. I do think that in fairness--this is what I was trying to suggest earlier-the subcommittee in 1966 spent quite a long time on going over this in its markup, and went deeply into the economic data that had been presented, and what we in the Copyright Office could come up with from independent sources. I know the chairman and Mr. Fuchs remember this very well, and nobody was terribly satisfied that this was a complete answer.

But Congress is not trying to give a complete answer. It is trying to provide I mean, it is not setting the rate it is trying to set the ceiling which it considered too low in the present law, and which it felt, on the basis of a real study of economic data, did not deserve to be raised more than one-half cent.

Mr. DRINAN. Well, Ms. Ringer, you conclude on page 46 that the Copyright Office believes Congress has enough information before it to enact a fair rate within this range. I do not have any information

E: Lout, and which is unfortunate

sammittee; and that is the prol 2es into a royalty arrangeme -"** La joint venture, and the pu

I de vith record companies on strou would think that norma ci, so that you would have no

that is persuasive to me at all. What is this information we are supposed to have?

Ms. RINGER, Well, the information is very similar to what the synon committee has in 1966, and which it was able to massage suffelpret TV to reach a conclusion that I think it felt was fair, using the criteria that it laid out, which I have repeated here. And I do honestly tous that

Mr. DRINAN. Except we have nothing, or virtually nothing, of wat the Knight report suggested that we need.

Vs. Ringer. That is right. The Senate did not either, and the Senate is likely to pass the bill as it stands without that kind of

Mr. DRINAX, You said that "Knight's conclusions were corret." and yet we do not have anything that that report said that are eswell before we can make a just judgment. And yet you say we have enou information to move forward.

Ms. Rixger. The Knight report obviously and this is what I agnie with-concluded at its base that what had been presented in the hear ings was insufficient to reach a kind of definitiye conclusion as to what the rate ought to be. But there are many cases, I assume, in which Congress is presented with situations in which no definitive an: it! is possible. You are not called upon to make the rate here. And remember, I repeat, that you will have a royalty tribunal working in this, which I would assume would be able to do the sort of thung that Knight asked, in effect, the Senate to do. And it did not.

Mr. Drisan. Thank you very much,

Mr. KASTEN METER. Well, I think you have made a numuis of poʻnts that are correct. We have a massive amount of material on this pointthat is, 2 cents versus 3 cents--presented to us. The point I think Mr. Knight was making was that notwithstanding the fact it was voluminous, that it was not necessarily reliable or qualitatively the cort of testimony we could necessarily reach a perfect answer from, tervise from that amount of testimony.

I do recall the parties seemed willing to use the frame of referente of versus 3 as a point of their testimony. They were abouh previously, of course, there was some question as to whether there out to be a compulsory license at all, that argument had been made, bul: seems that the publishers and the composers were willing to make 3* for cents without raising the other questions again. And the com. tee at that time accepted that being the context of the delale.

Whether it is not possibl. to rea, hanother--whether there is enough testimony presntly and historically on this subject. I am not sure that it would necesarily ever satisfy anyone: whether the ideal tist Jr. Knight suggested-- I hope it is posible. But I should not want to attempt to do so or this suixcommittee, knowing what it has airra.lv been expower to on the shadbject over a period of a deadle. I do not *** that perannukefxtfortly informinis part of her o ! rert, verrlene bill, and very compliatal ll. lll we can do is then verv brat we can. Teintleman from New York!

V r. PITTW:N. I would like to follow us on this notion of a poor that surrpted by the songwriter, and I agree with pain that it

982, there comes a time-there i A Nigration, and that is where wi it solgwriter frequently feel

2 vith whom he has negotiate a npany that he essentially ov

IT ve will make a good deal fo wed perhaps, and then sort of ; .argument for a floor. withik that essentially the way 4*30g tom-perhaps prohibiting t 1 l the copyright owner or ti

1 at will, and perhaps legis CL. that, it seems to me, is th

up for a floor.
D ar vou to comment on that.

VD. I have been through this
K rst rou said, that it seems to i
Insthat the songwriters are s
P ure nome a little more activ

Pion being critical, but I thir

*tang is negotiations and they ergarters and publishers. And

uid change some more. bet about the desirability of E j of situation. It is pretty he ***p of the kind they are ta yo'or to them, and their cou without with a formula. i s . In other words, it w

...sir Tat is right. You have

Orelsesat a rate. 2. Tuat is right. You can

mis montretire tl.is, muslair than fair because M . Would it be appro * *--and really essential

tipfeing that your

jestlawyer because her Hann var 19 that are similar no vreme art and he trades ont

**all kinds of difficulties. But I was particularly trouble i wien s talked to some of the songwriters about a factor that I had not

*rou think that i **Oppi vou can always get r But ba abrufently the song

thought about, and which is unfortunately not within the jurisdiction of this subcommittee; and that is the problem that occurs when a songwriter enters into a royalty arrangement with a publisher. Essentially that is a joint venture, and the publisher is given the authority to negotiate with record companies on behalf of the songwriter and itself. And you would think that normally that their interests would be identical, so that you would have no problem with that representation.

However, there comes a time--there is developed in the industry a vertical integration, and that is where we do not have the jurisdiction, whereby the songwriter frequently feels that he is being sold out by a publisher with whom he has negotiated and a publisher negotiating with the company that he essentially owns. The songwriter says that essentially we will make a good deal for one of the songwriters, the lead record perhaps, and then sort of give away the others; so that that is their argument for a floor.

Now, I think that essentially the way to solve that is to have legislation relating to-perhaps prohibiting the publisher from doing that or allowing the copyright owner or the author to pull out of that arrangement at will, and perhaps legislation relating to vertical integration. But that, it seems to me, is the only rational argument that can be made for a floor.

I would like you to comment on that,

Ms. RINGER. I have been through this same mental process. I would add to what you said, that it seems to me one of the hopeful signs of all of this is that the songwriters are speaking for themselves in this now and have become a little more activist than they have been on this issue. I am not being critical, but I think it is a good sign. And what you are describing is negotiations and relative bargaining power between songwriters and publishers. And I think that these things are changing and should change some more.

I am dubious about the desirability of the heavy hand of Government in this kind of situation. It is pretty heavy already here. I just do not see how a floor of the kind they are talking about can be established. I have talked to them, and their counsel, and they have never been able to come up with a formula.

Mr. PATTISON. In other words, it would have to be so low as to be meaningless.

Ms. RINGER. That is right. You have only got one
Mr. PATTISON. Or else set a rate.

M. RINGER. That is right. You can always set a rate, but then this would completely restructure tiis. And I think you would end up being more unfair than fair because many of the rates would be too lov.

Mr. Pattison. Would it be appropriate to have a provision in the copyright law-and really essentially this is an ethical problem. This is like having the feeling that your lawver is selling you out. You can always fire your lawyer because he may be selling you out, because he has got three cases that are similar and he is working with the same insurance company and he trades one off against the other

Now, whenever you think that is happening, that is an unethical practice and you can always get rid of the lawyer and get another lawyer. But apparently the songwriter, when he enters into this 57-786—76-pt.

3 32

sems to me that that argument is pri - sehat the parties are relatively equal . Lil think that they are not, and I take

time creator, and he is less powerful tha :. is probably less powerful than the

*nd is that this estimate of the mai CO e for really represents a guess as 1 psis the future, and at what price.

7 not the Hart approach accomm on we were to legislate a payment based u :"% s that not anticipate absolutely and -1.2. If zero records are sold, he gets not] .:2 sot. Is that not a fairer approach

Tas really based upon a projection of 3.3 ouai bargaining positions! 2. I certainly will not argue with th

Dr. Drinan, I think we should, in v 008 nok at the efforts to try to draft this

dan we have so far. i s is handled in foreign countries

contract, when he sells his song and retains a royalty, does not reia'n that privilege. Could we have a provision in our statutes that would provide that the songwriter could have some mechanism for grtung out of that if he feels he is being sold out?

Ms. RINGER. He certainly could. But I am doubtful as to its wis dom. I think you would need to consider a whole range of other factors that would be involved. In other words, the problem you are putti your finger on is certainly not limited to music. It covers the entire range of the copyright law and I do not think there is any doubt ti.at many authors are getting ripped off by somebody or other in business dealings.

I would say this, that the Knight report itself, even in 1969, supe gested rather strongly that there are some emperors that do not hare any clothes in the music industry. And that is one of the reasons wir he felt that the whole industry should be looked at independents, rather than by use of statistics, or partial statistics that they are with ing to put forward. We all know that the way the music traches and the form of music that is available to us is quite different from that 20 years ago. There has been that radical a change that is obrio is to all, and there are corresponding changes in the industry.

Mr. PATTISOX. Let me follow up on this question. Would it not be possible for this to develop as a matter of practice in the music indue trt? In other words, could a songwriter not say in the sale of his ans to a publisher that you have the right to negotiate for me. Ilowever, to the extent that you negotiate with someone with whom you are a:511 ated, then I have the right to approve or disapprove; could thes 10 handle that by contract themselves? And if they can, why have they not?

Ms. Ringer. I cannot speak for them, but there are old forms and old relationships that probably outlive their time. That would be my answer.

Mr. Pattison, Prospectively then, if I represented a songwriter would it not be prudent for me to say in his deal with the publisher that the publisher has the right to negotiate for the sale of this to me cording companies? However, any deal that is made with a recording company in which the publisher has an interest, that would be subiet to my prior approval, and that would essentially solve the problein.

Ms. Ringer. It would solve that problem.
Mr. PATTISON. Yes.

Ms. Rixger. Given a strong enough organization of songwriters or & union or something like that, I think this certainly could be done and it would solve that problem. It might create others.

Mr. Pitrisex. Thank yon.
Mr. K STENUTIFR. Jr. Wiggins!
Mr. WIGINS. Thank you, Mr. Chairman.

I want to pursue this a bit longer. There certainly are other subjects but thus one intrigues me for the moment. I understand your testimony to recommend against legislating a floor and recommenting aan legislating a rate for primarily the same rrason that it would intrpiece

ity and that would not accommodate market forvg which may quire less than the statutory mata or minimum. And I can underetani that indeed it can create a problem where it would have a ch:11. eft uw criativity, $mply ause it would be impossible for ner people to get started in attempting to sell their work.

A buon tistry would in any way agree upoi

Sam. Marbe that is not of any importano
romanis of trying to work something
e s that are involved in this bill besi

ar is interested obviously
Emax.Why not work out something?

is. Well, that answers your questi Porto their economic detriment. That

D R. Absolutely; they would feel t 43 03 the ceiling altogther; that 8 perc ***ally more than anything they would *** p into their arguments, but essen

AIS. I would not be wedded necess Seriaterer figure we establish itself is

ment where unequal parties are d : **exptually, without reference to th .**rese appeal to me as being a fairer app

" If a base could be established

****, and you took account of all o
I agree with you in principle.
P. K. Would the gentleman yield?
UT I rield, of course.
biri. Tas Senator Hart's proposed
****arra that they should not set a
***TA-how did he get to the 8 perce

Itise common figure. I think i
Site. But it was the proposal of

Piers. I think after the 212
14 project in the Senate to try to

either went forward with 8. Th TELAX. Thank you for yielding.

r

But it seems to me that that argument is premised upon certain bases; one is that the parties are relatively equal in their bargaining power. And I think that they are not, and I take it it starts from the bottom, at the creator, and he is less powerful than his publisher. And the publisher is probably less powerful than the manufacturer.

And the second is that this estimate of the market and what it will absorb and pay for really represents a guess as to how many records will be sold in the future, and at what price.

Now would not the Hart approach accommodate those market forces! If we were to legislate a payment based upon a percent of selling price, does that not anticipate absolutely and finally what the market will do? If zero records are sold, he gets nothing; if a million are sold you get a lot. Is that not a fairer approach than trying to fix a figure which is really based upon a projection of the market by people who are in unequal bargaining positions ?

Ms. Ringer. I certainly will not argue with this in principle, and as I indicated to Jr. Drinan, I think we should, in view of your questions, take another look at the efforts to try to draft this; and a perhaps more searching look than we have so far.

The way this is handled in foreign countries—I do not think that the record industry would in any way agree upon this as a compromise at this stage. Maybe that is not of any importance, but I think if we are thinking in terms of trying to work something out here, and there are other issues that are involved in this bill besides this in which the record industry is interested obviously Mr. Drixan. Why not work out something?

Mr. Wiggins. Well, that answers your question, Father, because it would work to their economic detriment. That is why not.

Ms. RINGER. Absolutely; they would feel this would be similar to taking off the ceiling altogther; that 8 percent presumably would be substantially more than anything they would be willing to consider. I did not go into their arguments, but essentially they are saying that

Mr. Wiggins. I would not be wedded necessarily to a figure, and I recognize whatever figure we establish itself is subject to negotiation in an environment where unequal parties are dealing with each other. But just conceptually, without reference to these practical problems, it has some appeal to me as being a fairer approach, than legislating 2,212 or 3 cents.

Ms. RINGER. If a base could be established on which the percentage was computed, and you took account of all of the variables, I would certainly not disagree with you in principle.

Mr. DRINAN. Would the gentleman yield?
Mr. WIGGINS. I yield, of course.

Mr. DRINAN. Was Senator Hart's proposed 8 percent based on some theory in this area that they should not set a fixed fee, but that would be an estimated-how did he get to the 8 percent?

Ms. RINGER. It is a common figure. I think it is the figure in England, I am not positive. But it was the proposal of the National Association of Music Publishers. I think after the 212 cents they went forward with a major project in the Senate to try to change the base to a percentage, and they went forward with 8. That was their proposal.

Mr. Drinan. Thank you for yielding.

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