-2 - Country Music Association (CMA), P.O. Box 22299, Nashville, TN 37202, (615) 244-2840 Membership, 6,000, including international representation. Trade association dedicated to promoting and preserving country music through such activity as the CMA Awards Show and the Country Music Foundation. - Gospel Music Association (GMA), P.O. Box 21201, Nashville, TN 37202, (615) 242-0303 Membership, 2,000, with international representation. Service organization whose purpose is to represent, promote and spread the word about gospel music, including presentation of the annual DOVE Awards. Music Publishers' Association of the United States (MPA), Nashville Music Association (NMA), 14 Music Circle East, Nashville, TN 37203, (615) 242-9662 -- Membership, 805 including 95 founding members. Trade association dedicated to represent all forms of music entertainment in Nashville. Nashville Songwriters Association International (NSAI), 25 Music Square West, Nashville, TN 37203, (615) 254-8903 -Membership, 2,000. Dedicated to the advancement of musical composition and the protection of member rights, it holds educational seminars and maintains a Hall of Fame. - National Academy of Popular Music (NAPM), 1 Times Square, New York, NY 10036, (212) 221-1252 Membership, 350. Maintains Songwriters Hall of Fame, museum and reference archives on popular music, and annually elects members to Hall of Fame. National Academy of Recording Arts & Sciences (NARAS), 4444 Riverside Drive, Suite 202, Burbank, CA 91505, (213) 843-8233 -- Membership, 5,000. Involved in creative process of sound recording. Members, including singers, musicians, songwriters, composers and engineers, vote for and present annual GRAMMY Awards. National Association of Recording Merchandisers (NARM), 1060 Kings Highway North, Cherry Hill, NJ 08034, (609) 795-5555 -- Membership, 500 retailers, rack-jobbers and independent distributors of sound recordings. Trade association founded in 1957 to protect the interests of the merchandising community and to promote the industry. Associate members include record companies and suppliers. (more) -3 - National Music Council (NMC), 250 W. 54th Street, Suite 300, New York, NY 10019, (212) 265-8132 - Membership, 1,500,000 in 61 national music organizations. Umbrella organization chartered by Congress to function as an information and coordination service for members that include composers, lyricists, musicians, singers, teachers, publishers, music licensing groups and recording companies. - National Music Publishers Association (NMPA), 110 E. 59th Street, New York, NY 10022, (212) 751-1930 Membership, 275 publishers. Trade association representing publishers of American music, including fields of popular, classical, sacred, educational, concert, gospel and country music, collects and administers royalties through the Harry Fox Agency. Recording Industry Association of America (RIAA), 888 7th Avenue, 9th Floor, New York, NY 10106, (212) 765-4330 Membership, 55 U.S. recording companies. Trade association founded in 1952 to work for the mutual interests and betterment of the industry. Activities include Anti-Piracy Intelligence Unit and certification of RIAA Gold/Platinum Records Award. SESAC Inc., 10 Columbus Circle, New York, NY 10019, (212) 586-3450 -- Affiliates, 1,500. Licenses and collects fees for use of works of its 1,000 songwriters and 500 publishers, and actively promotes its membership. Society of Professional Audio Recording Studios (SPARS), 1400 North Crescent Heights, Los Angeles, CA 90046 (213) 656-9467 -- Membership, 100 recording studios, major manufacturers, record companies and producers. Trade association dedicated to excellence through innovation, communication and education. -30 Addendum American Society of University Composers Senator MATHIAS. Our next witness will be the inimitable Jack Valenti, accompanied by a panel of Charlton Heston, Jay Eliasberg and James Leonard. Mr. Valenti, do you wish to lead off for this panel? STATEMENT OF A PANEL INCLUDING JACK VALENTI, PRESIDENT, MOTION PICTURE ASSOCIATION OF AMERICA, INC.; CHARLTON HESTON, ACTOR, DIRECTOR, PRODUCER, AND PRESIDENT OF THE SCREEN ACTORS' GUILD; JAY ELIASBERG, FORMER VICE PRESIDENT, RESEARCH, CBS BROADCAST GROUP; AND JAMES R. LEONARD, VICE PRESIDENT, ROBERT R. NATHAN ASSOCIATES, INC. Mr. VALENTI. Thank you, Mr. Chairman, I will. First, I would like to request the following documents be inserted in the record as part of my testimony. I am told that the committee prefers that I should make such request formally. These include a memorandum of constitutional law and copyright compensation prepared by Prof. Laurence Tribe of the Harvard Law School; the testimony of Donald Tatum, chief of the executive committee, Walt Disney Productions; the testimony of Judd Taylor, president of the Directors' Guild of America; the testimony of Jack Copeland, chairman of the copyright committee of the Training Media Distributors' Association; the testimony of Richard Orear, president of the National Association of Theatre Owners; and the testimony of Gene Allen, vice president, International Alliance of Theatrical Employees and Moving Picture Machine Operators of the United States and Canada. Senator MATHIAS. Without objection, those documents will be inIcluded in the record. Mr. VALENTI. Following me, Mr. Chairman, will be Mr. Charlton Heston, for 7 years, president of the Screen Actors' Guild-and I need not tell you that that is a way station on the way to a higher position in our land; Mr. Jay Eliasberg, former vice president and director of research at the CBS Broadcast Group, and Mr. James Leonard, vice president of the Robert R. Nathan Associates, Inc. With that introduction, Mr. Chairman, I will now apply my stopwatch to begin my 5 minutes. Senator MATHIAS. I will call your attention to the fact that you have the green light, and your time is now running. When it gets down the end, the yellow light will appear, and when the red light comes on, you are going to get the gavel. CONSTITUTION GUARANTEES COPYRIGHT PROTECTION Mr. VALENTI. The constitutional platform, gentlemen, on which this entire issue rests is simply this-that creative property is private property, like land or your home or your car, and no one should have the right to use that property without compensating the owner or getting the permission of the owner. That indeed was the essence of the Ninth Circuit Court's decision, which confirmed the sanctity of private property, and all else that will be said here today, Mr. Chairman, is irrelevant to that central, dominating 'Previously submitted by Sidney J. Sheinberg of MCA Inc. and can be found on page 78. issue that intellectual property, is private property and is entitled to the protection ordinarily given private property. AMERICAN FILM INDUSTRY IMPORTANT TO BALANCE OF TRADE I believe it the duty of the Congress to nourish and to protect a great national trade asset. The U.S. film and television industry brought back to this country last year almost $1 billion in surplus balance of trade. American film is the one U.S.-made product that the Japanese, whose skill in other fields is beyond all comparison in their conquest of world trade, are unable to duplicate, replace, or clone. If that asset is wasted through the unlicensed use of videocassette recorders in this country, then the Japanese will have succeeded in eroding our surplus balance of trade, though they themselves cannot make movies for an international audience. ALL USERS REQUIRED TO LICENSE FILM PRODUCT The lobbyists for the Japanese recorder manufacturers claim, "The VCR is the best friend the Hollywood producer ever had.' Well, with such friends, we will soon become an entertainment desert in this country. Now, why is this so? In the marketplace where film is licensed all who choose to use theatrical film and television programs must license those programs from the owners of those film properties. That is the way the marketplace operates today-theatres, pay cable, pay television, prerecorded cassettes, network television, local station television all license copyrighted works from the owners of those works. The VCR is the only unlicensed medium in the marketplace today-the only medium that does not have the permission of the owner of that property to use it-and yet, the VCR has one primary mission, and that is to tape copyrighted material, private property that belongs to others. MAJOR USE OF RECORDERS ELIMINATES COMMERCIALS Surveys in 1981 by Media Statistics, Inc. of Silver Spring, Md., show conclusively that 75 percent of VCR owners library tape for their permanent collections. Mr. Ladd, the Reporter of Copyright, alluded to that fact in testimony a few moments ago. Eighty-seven percent of VCR owners use fast-forward and visual search gadgetry on their machines to erase commercials. For example, the Sony Remote Betascan can zap out a 1-minute commercial in just 3 seconds. And I submit for the record, Mr. Chairman, a letter from the vice president and director of marketing of Frito-Lay, a multi-million-dollar buyer of advertising time, which says that Frito-Lay will not pay for viewer ratings that include home taping, or if they do pay, it will be at a greatly reduced rate. Mr. JACK VALENTI, Motion Picture Association, Washington, D.C. FRITO-LAY, INC., DEAR JACK: I am writing to confirm several comments that I have made orally in conversation with you. As I told you, the area of VCR media is relatively new, and Frito-Lay does not have any documented policy for this media form right now. My personal point of view is this: (1) VCR penetration of households will continue to grow; (2) VCR devices allow consumers to record program materials, but delete commercial messages; (3) Some method of measuring whether a "set-in-use" is hooked up to a VCR will have to be developed and used; (4) The burden of proof will be on the television networks to provide data on VCR usage; (5) Advertisers either will not pay for VCR-associated message delivery, or they will pay at a reduced rate, given the potential for deleting commercial messages. While I cannot commit Frito-Lay or PepsiCo on what may be hypothetical issues, I would anticipate that we would negotiate rate concessions on an "up-front" basis with networks once VCR penetration becomes significant (10% of households). Sincerely, JOHN M. CRANOR, Vice President, Marketing. ADVERTISER-SUPPORTED "FREE" TELEVISION WILL BE HARMED Advertisers will not pay, or they will pay less for commercial messages which never reach their intended audiences, which in turn will reduce revenues to the networks, which in turn will reduce revenues to the creative community as Ms. Sills pointed out, which in turn will reduce investment in new movies and new television programs. That is an axiom of the marketplace, and the public is the ultimate victim. HOME TAPING WILL NOT BE AFFECTED Let me emphasize, no one wants to prevent taping in the home. I think Senator DeConcini knows how I feel about that. I want very much to permit noncommercial taping in the home. But I say believe it must be linked to a license to use the product; the simple and sensible way to do that is a copyright royalty fee on the video machines and the blank tapes. To exempt home taping from copyright infringement without the copyright fee would be unconstitutional, as the legal memorandum from Lawrence Tribe, professor of constitutional law at Harvard Law School, clearly points out. It appears that such legislation would violate the "takings" clause of the fifth amendment. MUSIC INDUSTRY ALREADY SERIOUSLY HARMED BY TAPING The music industry, as you have heard and as you will hear later in this hearing, has been terribly wounded by millions and millions of unlicensed taping. That same contagion is going to be visited on the visual entertainment arena. When there are 20, 30, 40 million of these VCR's in the land, we will be invaded by millions of "tapeworms," eating away at the very heart and essence of the most precious asset the copyright owner has, his copyright. RECORDERS DO NOT CREATE ENTERTAINMENT Please, remember this, gentlemen. Japanese machines do not create entertainment. The American film industry does. The opposition lobbyists will tell you; "Well, the film production industry does not have to license its product to free television. Keep it off of free television, and get more money from pay cable. That is the way the marketplace operates," they say. This is fiscal and political 96-601 0-82-30 |