Cable Address: MONBUNKA TOKYO

AGENCY FOR CULTURAL AFFAIRS (BUNKA-CHO)

3-2-2. Kasumigaseki, Chiyoda-ku, Tokyo 100, Japan

The Report also stresses the importance for the parties concerned of making efforts to reach an agreement among them on the problem of home taping. In this connection, there is a general agreement that the owners of rights concerned and the makers should continue negotiations, sitting around a "round table" on a non-governmental basis.

Hoping that this information would be of some use for you, and asking you, in my turn, to give us information on the progress in studies of the problem of home taping in your country,

Sincerely yours,

Y. Kimura

Yutaka KIMURA

Deputy Director

Copyright Division

Cultural Affairs Department

Senator MATHIAS. Ms. Sills.

STATEMENT OF BEVERLY SILLS, CHAIRPERSON, COALITION TO SAVE AMERICA'S MUSIC, AND GENERAL DIRECTOR, NEW YORK CITY OPERA

MS. SILLS. Thank you very much for allowing me to come.

I am the general director of the New York City Opera-I used to be Beverly Sills. I am here today as the chairperson—

Senator MATHIAS. I think there are a good many million Americans who are still sure that you are Beverly Sills, and very glad of

it.

MS. SILLS. Thank you.

I am here today as chairperson, or even chairman, of the Coalition to Save America's Music. It is a group that broadly represents the American music community, which includes artists, musicians, songwriters, publishers, unions, performing rights societies, record producers, and retail outlets. The membership which is set forth in my written statement as an attachment to it is made up of 21 organizations with over 2 million members. I stress that because they include great groups of people that normally do not lie down with one another harmoniously. But they have joined here today all in agreement, which I must say is quite unprecedented, because we agree on this one basic thing that there does indeed exist a grave threat in uncontrolled home taping. "Piracy" is a much more simple name for it.

I am sure we have all rejoiced in listening to recordings by Mr. Caruso, Rosa Ponselle, and Ezio Pinza. Imagine if those recordings had never been made. Well, I sit at the head of the New York City Opera, which is an almost totally American opera company, with a whole group of extraordinarily gifted young American artists. I made my career in that company. Therefore, I can safely predict that there might be a few other superstars coming out of my company. But if less and less recordings are made and more and more home taping is permitted in an uncontrolled fashion, then these young singers are not only deprived of the choice of what they would like to be recorded in, but they are deprived of a very muchneeded income.

I was lucky enough to document most of my roles, but what about these young singers coming along? Will their careers never be recorded or left to posterity because of this out-of-control problem? This may well be so because of the current economics of the recording industry. Release of recordings, particularly classical ones, is a very high-risk affair. Very few turn out commercially successful, and industry studies show that less than 10 percent of classical recordings break even. So that if record companies cannot earn profits even on the smaller percentage of records or tapes that do sell due to the pirating, then this entire segment of recording can whither away and die. I know this is so, because when I was recording, I was frequently told by EMI that my recordings were being paid for by the Beatles. Incredible as it seems, taping actually represents over 75 percent of all legitimate purchases, That is a very high percentage. And the reason people tape, according even

to the tapers themselves, is to avoid having to purchase a record or a prerecorded tape.

I would like to tell you a little story that happened to me not more than 2 weeks ago. I was approached by a gentleman who said that he had the most complete collection of everything I had ever done on television, including talk shows where I then sang an aria or two, including my complete operas, including everything I had done in the last 12 years-and he offered to sell me my collection. Can you imagine the outcry if we suddenly found that somebody had taken a whole bunch of new books and printed them cheaply and published them? Supposing we found that the number of new books had declined by one-third because of unauthorized copying, or that opera and concert performances had declined by one-third because of unauthorized admissions.

Now, I am not proposing that the freedom of consumers to tape music be denied. All I am proposing is fair compensation to the creators of that music. That is why we believe that amendment 1333 to S. 1758 is a reasonable solution to this problem, allowing some giving away and some taking back.

Some of my friends up here will examine in depth the severe economic impact record duplicating and taping have. But what really worries me is the corrosive effect on the very creative process itself. Record companies simply will be unwilling and unable to take risks on new artists, no matter how brilliantly these beckoning stars shine. A big thumb will be thrust down on creativity. I can see it already. The end result, of course, is detrimental to public interest. It is a denial of free choice and the beginning of cultural impoverishment.

The goal of our first amendment and copyright law is to encourage a maximum of diverse ideas and intellectual expression. Pirating has exactly the opposite effect.

Thank you.

Senator MATHIAS. Thank you very much, Miss Sills. I agree with you that is an astounding figure that 75 percent of all taping is off the market, privately done. So that would mean, I suppose, that 75 percent of all the tape libraries or home recording libraries are not coming through commercial sources, and this must have an enormous impact on the entire creative industry, the whole community of artists.

Ms. SILLS. I think it does.

Senator MATHIAS. Let me defer to the Senator from Kansas for a question.

Senator DOLE. The Senator from Kansas has no questions. I am trying to cover two meetings this morning, so I will listen awhile before I ask questions.

Senator MATHIAS. The Senator from Vermont.

Senator LEAHY. Thank you, Mr. Chairman.

I just read through Ms. Sills' testimony, and I was struck by the same points you made, and I find that I do not have questions. I am delighted you are here, Ms. Sills. Like so many of us, I have listened to you on many occasions, both here and in New York and am enthralled to hear you sing. This is the first time in person I have heard you speak, and I enjoyed that, too.

Thank you very much for being here.

Ms. SILLS. Thank you.

Senator MATHIAS. The Senator from Alabama.

Senator DENTON. I have no questions. I also am delighted to see Ms. Sills here.

Ms. SILLS. Thank you.

Senator MATHIAS. Senator Specter.

Senator SPECTER. Thank you, Mr. Chairman.

Ms. Sills, a concern that I have turns over the expectation of those who have performed way back in the past. And I can understand the concern about protecting the property rights of those who are performing today and those who have an expectation of recording their talents or those who are making movies, as we will talk about at a later time in the testimony this morning.

But a concern that I have turns on a cost to the consumers on those who have performed in the distant past, for example, on the making of "Gone With the Wind," a production in 1939. If there is a counterpart in your profession, do you think it is appropriate to set up a system where there will be royalties or revenues for those who performed so long ago that they had no expectation of having television revenues, for example, on reruns? My concern is to make some rational separation between those who are expecting it at the present time and have property interests that ought to be carried forward, as opposed to the other classes.

Ms. SILLS. Of course, that is a very difficult question. I cited earlier the recordings, let us say, of Caruso and Rosa Ponselle and Ezio Pinza, all of whom, I am sure, have estates that claim certain rights. I know, Mr. Toscanini, for instance, with the wealth he left behind, has living relatives. I am sure there is an estate which would like to and would hope to collect royalties.

I would hope that somebody on this panel is more qualified than I to make any legal ramifications of what I say, that perhaps some kind of limitation, let us say, a statute of limitations going back to a certain time period, and perhaps correcting what you are raising. I do not know whether legally, anything like that can be done. I do know that some protection must be afforded people for the creative work they do, and it is up to minds, like the people in this room, to come up with a fair and equitable manner in which the right of these people is protected, as well as the consumers' rights. I am certainly not sitting here, saying, let's go get the consumer; I am not after that at all. I am, in a sense, looking at my 200 young singers, who desperately need income, who have the right to choose what they would like to be heard in. They should have some control over their talents and some rewards for their talents, as well. At the moment, it is all too one-sided, and that is not happening. I have been, as I cited before, with this gentleman wanting to sell this entire collection to me--I do not feel victimized. My career is over, and I have made my place in history, and I have made a great deal of money in my career. I am looking to the future now for these youngsters. If the record industry dries up, then 10 or 15 years from now, nobody will ever know who they are or what they have done or what contribution they have made in beautifying our lives. And I would just like to see that those rights are protected and that the opportunities remain for these young artists to make documentations of their extraordinary talents.

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Senator SPECTER. I think most of us share the concern which you have just expressed about those who are recording today. If you use the example of Caruso, which you just referred to, I think that a principal concern of the law is to reward expectations. At the time that Caruso performed, I don't know what the state of the art was or whether there was a reasonable expectation that he might have. And if he had such an expectation, it might be appropriate to pass it on to his estate and his heirs, or it might not be. But there might well be some cutoff as to those who have performed in a day when the technology was not present for reproducing, just as the technology was not present for pirating reproductions, and that there may be an analog on the singing as there is to a movie like "Gone With the Wind", that the expectations who made "Gone With the Wind", I think, were not that there would be replays on television. They would have very long-term rights to those kinds of royalties. I am interested in your response, that you would think it appropriate to have a cutoff.

Ms. SILLS. I think it can be considered-there is a danger in saying to somebody who perhaps created something wonderful 25 years ago, "Well, you are only allowed so much compensation because 25 years ago, who knew that this would be such big success". That hardly gives any kind of incentive to creativity. I think a great many things we do-as an example, in my opera company, I do for "brownie points"-we get credit for doing esoteric works. And I think a lot of recordings are made with that same idea, to bring, perhaps, to a smaller number of people some very special kind of music. If that suddenly hits it big, I do not think it should be penalized in 25 years-perhaps, if there is a delay in the success of it-I do not think we should say, "Well, we did not expect that to happen at the time we made it; therefore, perhaps you are not entitled to so much." So we have to be very careful of that, too. I think something that is creative-Mr. Caruso, whether he expected that some day, the recording industry would grow to such proportions, I do not think is the point. The point is, he did make an extraordinary recording. We are enjoying his talents, and we are using his talents over and over again, and why not have some reward for his estate or family. Why deprive his estate or family of it because perhaps 40 years ago, we never thought that we never had such expectations. So there is a little double-edged sword there. Senator SPECTER. Well, your point on the brownie points is well taken. Mr. Caruso would still get brownie points for having the achievement. We are going to debate whether he ought to get any "greenie" points to have the financial compensation. I think I might part company with you on the issue of Caruso, but I am not sure. But the delineation that I think is important is that there be a proper recognition of those who are performing today so that the arts can be promoted and that there not be a taking of their property rights. And I would back up beyond today to those who had performed with an expectation that these reproductions would produce revenue for themselves or their estates. But I have a real question about those who had performed at a time before there were reproductions, so that they did not have that expectations, or certainly could not have anticipated the pirating. But I am very interested in your view.