Page:Copyright Law Revision (Senate Report No. 94-473).djvu/95



General background of the problem

No provision of the present law has attracted more heated denunciations and controversy than the so-called jukebox exemption of section 1(e). This paragraph, which has remained unchanged since its enactment in 1909, provides that—

The reproduction or rendition of a musical composition by or upon coin-operated machines shall not be deemed a public performance for profit unless a fee is charged for admission to the place where such reproduction or rendition occurs.

This blanket exemption has been widely and vigorously condemned as an anachronistic “historical accident” and in terms such as “unconscionable,” “indefensible,” “totally unjustified,” and “grossly discriminatory.”

Efforts to repeal the clause have been going on for more than 40 years, and between 1947 and 1965 there had been some 25 days of congressional hearings devoted to the subject. In August 1958 this committee reported S. 1870 of the 85th Congress to repeal the jukebox exemption and to provide that the reproduction of a copyrighted musical composition through the medium of a jukebox shall be deemed a public performance for profit.

The following summarizes the arguments against retaining the exemption:
 * 1. The exemption for coin-operated machines was added to the 1909 act at the last moment, and its consequences were completely unforeseen. The coin-operated music player of today is not comparable to the player pianos and “penny parlor” mechanisms in use in 1909, and the unanticipated effect of the provision, creating a blanket exemption for a large industry that is based on use of copyrighted material, represents the “core defect” in the present law.
 * 2. The exemption not only deprives copyright owners of revenue to which they are fairly entitled, but it also discriminates against all other commercial users who must pay in order to perform copyrighted music. In the past 30 years the jukebox industry has become strong and prosperous by taking a free ride on the hits created and developed by authors and publishers. Jukebox operators, alone in the entertainment field, continue to use others’ property for profit without payment.
 * 3. The exemption also creates serious international problems. It is obviously unfair for U.S. composers to be paid when their songs are used in jukeboxes abroad, but for foreign composers to be deprived of revenue from jukebox uses of their compositions in this country. The problem is particularly acute with respect to Canada. Jukebox royalties in foreign countries at the time of the hearings average between $40 and $50 per machine annually.
 * 4. It is difficult to find support for the argument that jukebox operators cannot afford to pay for use of the very property they must have in order to exist: copyrighted music. Revenues from jukebox performances gross approximately $500 million annually of which the copyright owners receive nothing.