Copyright and Home Copying: Technology Challenges and The Law

Copyright and Home Copying: Technology
Challenges the Law

October 1989
NTIS order #PB90-151309
GPO stock #052-003-01169-7
Recommen ded Cit a t ion :
U.S. Congr ess, Office of Technology Assessment , Copyright and Home Copying:
Technology Challenges the Law, OTA-CIT-422 (Washingt on, DC: U.S. Gover nment
Pr int ing Office, Oct ober 1989).
Libr a r y of Congr ess Ca t a log Ca r d Number 89-600714
For sale by t he Super int endent of Document s
U.S. Gover nment Pr int ing Office, Washingt on, DC 20402-9325
(Or der for m can be found in t he back of t his r epor t )
For e wor d
Todays consumer elect r onics allow t he aver age cit izen t o make ver y good
copies of r ecor ded music, t elevision shows, movies, and ot her copyr ight ed wor ks
for pr ivat e use at home. Soon, as digit al r ecor ding equipment comes int o wide-
spr ead use, homemade copies will not just be ver y goodt hey can be per fect
r epr oduct ions of t he or iginals. Home copying is becoming much mor e common;
for inst ance, t he pr opor t ion of people who make home audiot apes has doubled
in t he last 10 year s. Copyr ight owner s ar e concer ned, and claim t hat home copy-
ing displaces sales and under mines t he economic viabilit y of t heir indust r ies. They
fear t hat t he abilit y t o make per fect copies will incr ease home copying even mor e.
This r epor t fir st examines home r ecor ding t echnologies. Thenfocusing
pr imar ily on audiot apingwe examine t he ambiguous legal st at us of home copy-
ing. Our r epor t consider s t he economic effect s t hat home audiot aping may have
on t he r ecor ding indust r y, cont r ast ed t o t he effect s t hat r est r ict ing home t aping
might have on consumer s. Finally, we ident ify a r ange of act ions t hat eit her Con-
gr ess or t he indust r y might pur sue.
Included in our r epor t ar e t he r esult s of a nat ional sur vey of home t aping and
copying behavior conduct ed for OTA in t he aut umn of 1988. In t his sur vey, 1,500
member s of t he public r esponded t o a r ange of quest ions about t heir own audio-
and video-t aping behavior s and t heir at t it udes t owar d var ious policy appr oaches
r elat ed t o home t aping. The Subcommit t ee on Cour t s, Int ellect ual Pr oper t y and
t he Administ r at ion of J ust ice of t he House Commit t ee on t he J udiciar y and t he
Subcommit t ee on Pat ent s, Copyr ight s and Tr ademar ks of t he Senat e Commit t ee
on t he J udiciar y init ially r equest ed t he r epor t . This r equest was joined by t he
Ranking Minor it y of t he House Commit t ee on t he J udiciar y. Int er est in t he st udy
was also expr essed in a let t er fr om t he Chair man of t he House Commit t ee on Ener -
gy and Commer ce and t he Chair man of t he Subcommit t ee on Commer ce, Con-
sumer Pr ot ect ion and Compet it iveness of t he House Commit t ee on Ener gy and
Commer ce.
OTA appr eciat es t he par t icipat ion of t he advisor y panel, sur vey wor king gr oup,
Feder al agency officials, and int er est ed cit izens wit hout whose help t his r epor t
would not have been possible. The r epor t it self, however , is t he sole r esponsibili-
t y of OTA, not of t hose who so ably assist ed us in t he assessment and it s cr it ical
r eview, or of t he congr essional commit t ees who r equest ed or endor sed t he under -
t aking of t he st udy.
Copyright and Home Copying Advisory Panel
Rober t W. Cr andall (Chair man)
Senior Fellow, Economic St udies Pr ogr am
The Br ookings Inst it ut e
J ason S. Ber man
Pr esident
Recor ding Indust r y Associat ion of Amer ica
Br enda Der vin
Chair man
Depar t ment of Communicat ions
Ohio St at e Univer sit y
David Fishman
Senior St aff Consult ant
Ar t hur D. Lit t le, Inc.
J ack Golodner
Dir ect or
Depar t ment of Pr ofessional Employees
AFL-CIO
Michael H. Hammer
Dir ect or
Communicat ions Policy Development
Time Incor por at ed
Glen H. Hopt man
Edit or -in-Chief, Opt ical Publishing
Smit hsonian Inst it ut ion
J udit h K. Lar sen
Dir ect or of Pr imar y Resear ch
Dat aquest
J udit h Licht enber g
Resear ch Scholar
Cent er for Philosophy and Public Policy
Univer sit y of Mar yland
William Livingst one
Cont r ibut ing Edit or
St er eo Review Magazine
Pet er Menell
Associat e Pr ofessor of Law
Geor get own Univer sit y Law Cent er
David Mouon
Chair man
Music Pr oduct ion and Engineer ing
Ber klee College of Music
Pet er Rot hbar t
Assist ant Pr ofessor of Elect r onic Music
It haca College School of Music
Gar y J . Shapir o
St aff Vice Pr esident
Gover nment and Legal Affair s
Consumer Elect r onics Gr oup
Elect r onic Indust r ies Associat ion
Mar k Silber geld
Dir ect or of Washingt on Office
Consumer s Union
Russell M. Solomon
Pr esident
MTS, Inc.
Pat r ick A. Weber
Dir ect or /R&D
MCA Recor ds
NOTE: OTA appr eciat es and is gr at eful for t he valuable assist ance and t hought ful cr it iques pr ovided by t he advi-
sor y panel member s. The panel does not , however , necessar ily appr ove, disappr ove, or endor se t his r epor t .
OTA assumes full r esponsibilit y for t he r epor t and t he accur acy of it s cont ent s.
iv
OTA Project StaffCopyright and Home Copying
J ohn Andelin, Assistant Director, OTA
S cience, Information, and Natural Resources Division
J ames W. Cur lin, Program Manager
Communication and Information Technologies Program
Fr ed W. Weingar t en, Program Manager
2
Communication and Information Technologies Program
Pr oj ect S t a f f
J oan D. Winst on, Project Director
3
Kar en G. Bandy, Analyst
Mar k Nadel, Analyst
Dar lene Wong, Research Analyst
Con gr essi on a l R esea r ch S er vi ce Con t r i bu t or
Douglas R. Weimer
Amer ican Law Division
Ad m i n i st r a t i ve S t a f f
Elizabet h Emanuel, Administrative Assistant
Kar olyn Swauger , S ecretary
J o Anne Pr ice, S ecret ary
1 As of 4/89
2 Senior Associat e as of 1/89
3As of 8/88
4 Pr oject Dir ect or 2/88-8/88, on leave 8/88-12/88
5 As of 3/89
v
Survey Working Group
Br enda Der vin Mar k Levy Rober t Schwar t z
Chair man Pr ofessor At t or ney
Depar t ment of Communicat ions College of J our nalism McDer mot t , Will & Emer y
Ohio St at e Univer sit y Univer sit y of Mar yland
Philip Wir t z
Mar t in Fishbein
Depar t ment of Psychology
Univer sit y of Illinois
J udit h Lar sen
Dir ect or of Pr imar y Resear ch
Dat aquest
Lewis Lipnick
Pr incipal
Your Silent Par t ner
St eve MacGr egor
Vice Pr esident
Diagnost ic Resear ch, Inc.
Associat e Pr ofessor
Depar t ment of Management
Science
Geor ge Washingt on Univer sit y
Robbin Ahr old
Br oadcast Music, Inc.
J oe Alen
Copyr ight Clear ance Cent er
David E. Alt schul
War ner Br os. Recor ds, Inc.
Wilhelmus Andr iessen
Conseil Eur opeen de lIndust r ie
de la Bande Magnet ique
Russ Bach
CEMA - Capit ol Recor ds
Lew Bachman
The Songwr it er s Guild
J ames Bar r et t
Bar r et t s Audio & Video
J ames A. Ber kovec
Univer sit y of Vir ginia
Paul Ber r y
Canadian Musical Repr oduct ion
Right s Agency Limit ed
Pet er Ber uk
Soft war e Publisher s Associat ion
St an Besen
Columbia Univer sit y
Mar v Bor nst ein
A&M Recor ds
Timot hy J . Br ennan
Geor ge Washingt on Univer sit y
Yvonne Bur ckhar dt
Int er nat ional Feder at ion
of Musicians
Rober t Cassler
Copyr ight Royalt y Tr ibunal
Reviewers and
Ralph E. Cousino
Capit ol Indust r ies
Michael Cover
Contributors
EMI, Inc.
Recor ding Indust r y Associat ion
of Amer ica, Inc.
Paula Cr anst on
SESAC, Inc.
J eff Cunar d
Debevoise & Plimpt on
Linda B. Cut ler
Eidak Cor p.
Donald P. Dulchinos
Nat ional Cable Television
Associat ion
J oe Finney
Nat ional Cent er for Healt h
St at ist ics
Ronald Fr eed
Music Publisher s Associat ion
of t he U.S.
Ray Gianchet t i
Nat ional Associat ion of
Recor ding Mer chandiser s
J ames L. Goldber g
Abr am, West er meier , Goldber g,
P.C.
Nat ional Associat ion of Ret ail
Dealer s of Amer ica
Michael Gr eene
Nat ional Academy of Recor ding
Ar t s and Sciences
J ill Gr isco
The Washingt on Post
Michael Gr ubbs
Tandy Elect r onics
Dan Hochver t
NYNEX
Br ad Kingsbur y
Pet er Nor t on Comput ing, Inc.
David E. Kr onemyer
Capit ol Recor ds, Inc.
St an Liebowit z
Depar t ment of Economics and
Business
Nor t h Car olina St at e Univer sit y
Sandr a Lockhar t
Car Audio Specialist s Associat ion
J ohn W. Lyons
Nat ional Inst it ut e of St andar ds
and Technology
Fr annie Mar t is
MTS, Inc.
J ames Massey
Nat ional Cent er for Healt h
St at ist ics
J ohn T. McGuir e
Scr een Act or s Guild
Al McPher son
War ner Br os, Recor ds, Inc.
Glor ia Messinger
Amer ican Societ y of Composer s,
Aut hor s, and Publisher s
Edwar d D. Mur phy
Har r y Fox Agency
Dave Newber g
Capit ol Recor ds
Ian Novos
Univer sit y of Sout her n
Califor nia
vi Continued on next pa ge
List of Reviewers and Other Contributors
(continued)
Kevin Odegar d
Nat ional Associat ion of
Songwr it er s
J oseph Oldham
Popular Mechanics
Edwin Out wat er
War ner Br os. Recor ds,
Mar ybet h Pet er s
Office of t he Regist r ar
U.S. Copyr ight Office
Skip Pizzi
Nat ional Public Radio
David Pushic
Inc.
Opt ical Disc Mast er ing
Helen Rena
Legal Depar t ment
Amer ican Feder at ion of
Musicians
Ir ene Robadey
Int er nat ional Secr et ar iat of Ar t s,
Communicat ions Media and
Ent er t ainment Tr ade Unions
FIET
Hilar y B. Rosen
Recor ding Indust r y Associat ion
of Amer ica, Inc.
Gar t h Saloner
Sloan School of Management
Massachuset t s Inst it ut e of
Technology
J ohn Boyle, Pr incipal Invest igat or
Schulman, Ronca, & Bucavalas,
Inc.
William J ohnson
Michael Kat z
Univer sit y of Califor nia at
Ber keley
Fr ed Manner ing
Univer sit y of Washingt on
Ian Novos
Univer sit y of Sout her n Califor nia
David Sappingt on
Bell Communicat ions Resear ch
Er ich Schulze
GEMA
Er ic Schwar t z
U.S. Copyr ight Office
St even Schwar t z
Music Dist r ibut ion Ser vice
Molly Seagr ave
Int er nat ional Cablecast ing
Technologies
Car l Shapir o
Woodr ow Wilson School
Pr incet on Univer sit y
Car y H. Sher man
Ar nold & Por t er
Rick Shoemaker
MCA Music
Gr egor y Sidak
Feder al Communicat ions
Commission
Cat hy Slesinger
NYNEX
Ken Small
Univer sit y of Califor nia
at Ir vine
David St ebbings
CBS Recor ds Technology
Gr oup
Contractors
Car l Shapir o
Pr incet on Univer sit y
Leigh Tr ipoli
Edit or
Refer ees for Econ omi c
J ames A. Ber kovec
St an Liebowit z
An a lyse s
Nor t h Car olina St at e Univer sit y
Gar t h Saloner
Massachuset t s Inst it ut e of
Technology
J effr ey M. Sydney
Polygr am Recor ds
Doug Talley
Digit al Radio Labor t or ies, Inc.
Ana Thor ne
Pet er Nor t on Comput ing
J ean Loup Tour nier
SACEM/SDRM
Kennet h Tr ain
Cambr idge Syst emat ic
Har old Vogel
Mer r ill Lynch Capit al
Mar ket s
Michael Waldman
Los Angeles
Howar d L. Wat t enber g
Mar shall Mor r is Wat t enber g
& Plat t
Geor ge David Weiss
The Songwr it er s Guild
Cliffor d Winst on
The Br ookings Inst it ut ion
Sanfor d Wolff
Amer ican Guild of Musical
Ar t ist s
David Sappingt on
Bell Communicat ions Resear ch
Ken Small
Univer sit y of Califor nia at Ir vine
Kennet h Tr ain
Cambr idge Syst emat ic, Inc.
Michael Waldman
Los Angeles
vii
Contents
Page
Chapt er l. Summar y, Issues and Opt ions . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Chapt er 2. Technological Change and Home Copying. . . . . . . . . . . . . . . . 37
Chapt er 3. Legal Aspect s of Copyr ight and Home Copying. . . . . . . . . . . 65
Cha pt er 4. An Over view of t he U.S. Recor d Indust r y. . . . . . . . . . . . . . . . 91
Cha pt er 5. Copyr ight Roya lt ies for Music a nd Sound Recor dings. .. ...103
Chapt er 6. The OTA Sur vey. . . . . . . . . . . . . . . . . . . . . . ...............139
Ch a pt er 7. Econ omi c P er s pect i ves on Home Copyi n g. . . . . . . . . . . . . . . . 169
Appendix A. Sur vey Development and Review. . . . . . . . . . . . . . . . . . . . . 211
Appendix B. Sur vey Quest ionnair e. . . . . . . . . . . . . . . . . . . . . . .........217
Appendix C. OTA Sur vey Tables. . . . . . . . . . . . . . . . . . . . . . ...........253
Appendix D. List of Cont r act or Repor t s. . . . . . . . . . . . . . . . . . . . . . . . ...293
vii;
Ch a p t e r 1
Su mma r y, I ssu es
a n d Op t i on s
CONTENTS
P a ge
SUMMARY q. qq $ s q q q . q. . .*** ***. .m. **** .0** **. . m*****************
Reasons for Concer n ..*o**. *.o * o * * . . * . * * . * **.*....* q .9**** q **** 3
Cont est ed Issues . . . q q . q . q q q q . . q q q q q q q q . q q q q .O . . . q q q q q q q q q q q q q q q q 5
Congr essional Role . . . . q .**..* . . . . . . . . q .9**.** q .9*.*.. q **9..** q * 14
POLICY CHOICES AND OPTIONS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Int r oduct ion . . * . * . . . . . *Oe Oo. Oo *oo. o. ** . . *o*** . o. . o. **. o*** *o*o
14
Fundament al Copyr ight Policy Quest ions . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Choices for Congr ess q .*. ***m *.** **** 9*. **** *.. **. *b * * * *9****.** 17
Policy Opt ions . . . . . . . . . * * * * . * * 9 * * * * * 9 * 0 . * . . * * * * * * * * . . * * 9 * * * e * e 20
CONSIDERATIONS FOR POLICY IMPLEMENTATION . . . . . . . . . . . . . . . 21
Dist inguishing Among Types of Home Copying . . . . . . . . . . . . . . . . . . . . . 21
Technological Copy Pr ot ect ions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Compulsor y Licenses . . . . * * . . * . * * . . . * . * . * * . * * . . . * . . * * * . *...**..* 26
Boxes
Page
1-A Quest ions Concer ning Ar t ist s Right s and Pr ivat e Use . . . . . . . . . . . . . . 17
l-B. Indust r y Agr eement s and Ant it r ust q * * * . . . . . . . . . . . . . . . . . . . . . . . . . 19
l-C. At t r ibut es and Uses of Home Copies q**. *9. ..** *9990 *****0999*.* 22
l-D. Par amet er s of Home Copying ..** .,** *.*. **. *m. .. **********0*0. 24
l-E. Indust r y Agr eement Concer ning DAT q * * . . . . . . . . * * . * . * * o * * o . . . . * 28
Ch a p t er 1
Su mma r y, I s s u e s a n d Op t i o n s
SUMMARY
R ea son s f or Con cer n
A 1988 OTA sur vey found t hat 4 in 10 of a
nat ionally r epr esent at ive sample of Amer i-
cans over t he age of t en had t aped r ecor ded
music in t he past year . The sur vey r esult s
showed t hat Amer icans t ape-r ecor d individ-
ual musical pieces over 1 billion t imes per
year . Much of t his home audiot aping was for
t he pur pose of copying music fr om r ecor ds or
compact discs t o audiocasset t es t o be played
in t he car or in por t able casset t e player s. OTA
found t hat t he publict hose who had t aped
and t hose who had not believe it is accept -
able t o copy r ecor ded music for ones own use
or t o give t o a fr iend as long as t he copies ar e
not sold.
But copyr ight owner s of music and sound
r ecor dings consider home audiot aping t o be a
pr oblem. They believe t hat t aping cut s int o
sales of pr er ecor ded music and r educes r oy-
alt y payment s t o songwr it er s, music publish-
er s, and per for ming ar t ist s. Recent advances
in audio-r ecor ding t echnology have made it
easier t o make high-qualit y home copies.
In 1986, J apanese and Eur opean manufac-
t ur er s announced t heir int ent ion t o mar ket
consumer -model digit al audiot ape (DAT) r e-
cor der s in t he Unit ed St at es. DAT t echnology
r epr esent s a significant advance over conven-
t ional, analog t ape r ecor der s. The sound qual-
it y of DAT r ecor dings is super ior , and DAT r e-
cor der s can pr oduce copy aft er copy wit h
vir t ually no degr adat ion in fidelit y. The de-
bat e concer ning DAT and it s impact on home
copying is one of a gr owing number of copy-
r ight issues ident ified in a 1986 OTA r epor t on
int ellect ual pr oper t y.
2
Since enact ment of t he Copyr ight Act of
1976, over 400 bills have been int r oduced in
Congr ess t o change t he copyr ight law; many
of t hese at t empt ed t o deal wit h a gr owing
r ange of copyr ight issues r elat ed t o t echnol-
ogy. For example, comput er soft war e, semi-
conduct or chips, pr ivat ely owned sat ellit e
dishes, online dat abases, and audio- and
video-casset t e r ecor der s, have all pr ompt ed a
var iet y of pr oposals t o deal wit h what copy-
r ight pr opr iet or s per ceive as not only pir acy of
t heir int ellect ual pr oper t y but an under min-
ing of t heir economic viabilit y.
Digital representations of music, video, and
ot her t ypes of infor mat ion and ent er t ainment
for home use cause copyr ight owner s t he most
concer n (see ch. 2). Alt hough some cur r ent
consumer -model analog audiot ape r ecor der s
can pr oduce ver y high-qualit y copies (espe-
cially fr om compact discs), t he qualit y of suc-
cessive gener at ions of copies degr ades r at her
quickly. But digit al r ecor der s, such as DAT
equipment or t he for t hcoming er asable/r ecor -
dable compact disc t echnology, enable t he
public t o make successive gener at ions of vir -
t ually per fect copies.
Music in digit al for m can be easily edit ed
and manipulat ed, and t he music can be copied
and st or ed on a number of differ ent media
t ape, comput er disk, compact disc, et c. Spe-
cia l, er r or -cor r ect ion cir cuit r y ca n ma ke
physical imper fect ions in t he r ecor ding, like
1
A
r oyalt y is a payment made t o a copyr ight holder or per for mer for t he use of his pr oper t y. Copyr ight in t he musical composit ion is
usually held by t he songwr it er s/composer and music publisher . Recor ding companies pay mechanical r oyalt ies t o copyr ight owner s
of musical composit ions based on t he number of r ecor dings sold. Copyr ight in t he sound r ecor ding is usually held by t he r ecor ding
company. Recor ding companies ear n r evenues fr om t he sale of a r ecor ding and pay r ecor ding ar t ist s t heir r oyalt ies fr om t hese r eve-
nues (see ch. 5 for a discussion of r oyalt ies for music and sound r ecor dings).
W.S. Conwess, C)mce of Technology Assessment , I n t el l ect u a l Pr oper t y R i gh t s i n a n Age of .El ect m n i cs a n d l n f o~u t i on , OTA-
CIT-302 (Melbour ne, FL: Kr eiger Publishing Co., Apr il 1986).
3
.
_ . . . ----
4 q Co p y r i g h t a n d H o m e Co p y i n g : T e c h n o l o g y Ch a l l e n g e s t h e L a w
Photo Credit: Optical Disc Mastering
Analog infor mat ion can be coded as a ser ies of ones and zer os.
dust or scr at ches, imper cept ible dur ing play-
back. Digit al r epr esent at ions offer advant ages
t o consumer s, but many copyr ight holder s ar e
concer ned t hat convenient , consumer -model
digit al r ecor der s will gr eat ly encour age home
copying, a nd ma ny r ecor ding compa nies,
songwr it er s, and music publisher s fear t hat
digit al audio copying will gr eat ly r educe sales
and r oyalt ies.
The pr imar y focus of t his st udy is home
audiot aping. In it , we examine t he nat ur e and
ext ent of home audiot aping and consider t he
impact s it may have on r ecor ding-indust r y
r evenues, cont r ast ed wit h consumer impact s
should home copying be r est r ict ed. We also
br iefly examine cur r ent home videot aping
pr act ices. This r epor t looks beyond near -t er m
pot ent ial impact s of DAT t o an int ellect ual
pr oper t y concept called private use, of which
home copying is one kind,
3
and t o t echnologi-
cal t r ends t hat will become t he basis for fu-
t ur e debat es over per sonal use of copyr ight ed
mat er ial.
3Examples of pr ivat e use include t ime-shift ing videot aping fr om t elevision, copying a magazine ar t icle, or making home
audiot apes fr om br oadcast or pr er ecor ded mat er ial. (See ch. 2 for a discussion of t echnological change and pr ivat e use and ch. 3 for a
legal discussion of home copying and ot her pr ivat e uses; see also ibid., pp. 193-201. )
..-.
Chapter 1Summary , Is s ues and Options .5
Con t est ed I ssu es
Lega l St a t u s of Home Cop yi n g
Goa ls of Cop yr i gh t Amer ican copyr ight is
sanct ioned by t he Const it ut ion as a for m of
pr ot ect ion for aut hor s against unaut hor ized
copying of or iginal wor ks of aut hor ship.
4
The copyr ight pr opr iet or is given t he exclu-
sive r ight t o use and t o aut hor ize var ious uses
of t he copyr ight ed wor k: r epr oduct ion, de-
r ivat ive use) dist r ibut ion, per for mance, and
display. Violat ion of any of t he copyr ight own-
er s r ight s may r esult in an infr ingement -of-
copyr ight act ion. The copyr ight owner s
r ight s in t he wor k ar e neit her absolut e nor un-
limit ed in scope, however . For inst ance, t he
dur at ion of copyr ight is limit ed (e.g., t he life
of t he aut hor plus an addit ional 50 year s, or 75
year s for a wor k made for hir e).
Copyr ight was developed for t he pr omot ion
of int ellect ual pur suit s and public knowledge,
pr imar ily for t he benefit of t he public at
lar ge.
5
Benefit s accr ue t o t he public fr om t he
cr eat ivit y of aut hor s, and t he limit ed monop-
oly gr ant ed aut hor s is a st imulant t o ensur e
t hat cr eat ivit y. Without a public benefit aris-
ing from the copyright system, the grant of a
monopoly would not rejustifiable. Thus, t her e
is a balance bet ween t he r ight s of copy-r ight
pr opr iet or s and t he r ight s of t he public. Ar gu-
ment s t hat equat e copyr ight wit h r oyalt y in-
come r un count er t o t his concept and appear
t o be inconsist ent wit h t he int ent of t he
Fr amer s of t he Const it ut ion.
Legal St at us of Home Cop yi n g a s P r i va t e
Use-I n this report, OTA defines home copy-
ing (of copyrighted materials) as an essen-
tially private, noncommercial activity, so that
home copies includes copies shared with or
given to friends, but not homemade copies that
are bought or sold. This definit ion is consis-
t ent wit h t he definit ion of pr ivat e use in t he
1986 OTA r epor t on int ellect ual pr oper t y.
6
Thus, home copies ar e used pr ivat ely wit hin
t he household (including per sonal vehicles)
and ar e not used for implicit or explicit com-
mer cial pur poses. Admission is not char ged
and user s ar e a household and it s nor mal cir -
cle of fr iends, r at her t han t he public. Home-
made copies t hat wer e subsequent ly used for
commer cial pur poses or public per for mances
would not be consider ed home copies. This
definition appears to be in line with public
opinion. Pr ivat e use is somet imes r efer r ed t o
colloquially as (per sonal use, pr ivat e copy-
ing, or home use. In t his r epor t , OTA uses
home copying t o r efer t o one for m of pr ivat e
use.
The pr oblem of pr ivat e use ar ises because
it s legal st at us is ambiguous. Current legisla-
tion and case law offer meager guidance as to
whether copyright proprietors rights extend
over private use.
7
While language in t he House
Repor t
8
accompanying t he 1971 Sound Re-
cor dings Amendment t o t he (for mer ) copy-
r ight law made it clear t hat Congr ess int ended
4
17 U. S. C., sees. 102, et seq. ( 1982)
5A fllndament a] ma] of Cr )pyr ight , is t o pr or not ,e t he public int er est and knowledge t he pr ogr ess of %ience ~d t he useful Ms.
(U.S. Const it ut ion, Ar t . I, sec. 8, cl. 8.) A dir ect ly r elat ed object ive is t he pr omot ion and t he disseminat ion Of knowledge t o t he public.
6The 1986 OTA r epor t defined pr zuut e u se as t he unaut hor ized, uncompensat ed, noncommer ci~, and noncompet it ive use of a copy-
r ight ed wor k by an individual who is a pur chaser or user of t hat , wor k.
Her e use includes copying and unaut hor ized does not
necessar ily mean illegal it means wit hout consent . Noncompet it ive means t hat t he fr uit s of pr ivat e use ar e not sold commer -
cially. (OTA-CIT-302, op. cit ., foot not e 2, p. 194. )
T~t hough u. s cou~s have t =n c~]~ on t . r esolve some as~ct s of home use of videocasset t e r ecor der s, t hese decisions have been
r elat ively nar r ow in scope and have applied t he fair -use doct r ine, absent ot her st at ut or y guidance. OTA consider s t hat in light of it s
ambiguous legal st at us, applying t he fair -use doct r ine t o pr ivat e use is pr emat ur e (see t he sect ion on fair use t hat follows).
8u,s, ConWess, House Comm it t = n t h
e
J udiciw, sound R
em
& Lngs: Repor t Acmmpanying S.646, ser ial No. 92-487, Sept ember
1971, p. 7.
6 . Copy right and Home Copy ing: Technology Challenges the Law
t o per mit home audiot aping for pr ivat e use,
t he absence of such language in t he 1976 law
allows alt er nat e opinions about congr essional
int ent (see ch. 3). The Recor ding Indust r y As-
sociat ion of Amer ica, Inc. (RI-M), for in-
st ance, consider s t hat t he 1971 amendment
was made ir r elevant by t he gener al over -
haul in t he Copyr ight Act of 1976.
10
The Elec-
t r onic Indust r ies Associat ion (EIA), on t he
ot her hand, consider s t hat t he 1976 legisla-
t ion did not hing t o negat e t he pr inciple t hat
home t aping fr om br oadcast s or pr er ecor ded
mat er ials was not an infr ingement [of copy-
r ight ].
11
Fa i r Use a n d Home Cop yi n g Some uses of
copyr ight ed wor ks, such ascer t ain copying for
t he pur poses of cr it icism, news r epor t ing, r e-
sear ch, t eaching, or scholar ship, ar e fair
uses,
)
not copyr ight infr ingement s. Fair use is
a defense t o a claim of copyr ight infr ingement
t hat is codified in t he 1976 Copyr ight Act and
int er pr et ed by t he cour t s. Cour t s det er mine
whet her an inst ance of copying is fair use by
t aking int o account t he pur pose and char act er
of t he copying, t he amount and ext ent of t he
wor k copied, t he nat ur e of t he or iginal wor k,
and t he effect of t he copying on t he pot ent ial
mar ket for or value of t he wor k. 12 Many con-
sider the doctrine of fair use to be the safety
valve of copyright law and sufficiently adapt-
able to deal with home copying and other con-
sequences of technological change.
Even t hough t he EIA (for example) main-
t ains t hat t he cur r ent legalit y of home copying
does not depend on t he doct r ine of fair use, it
consider s t he concept of fair use as adequat e
t o deal wit h home copying, so t hat addit ional
legislat ion making it s legal st at us mor e ex-
plicit is not needed.
13
The r ecor ding indust r y,
on t he ot her hand, consider s t hat home copy-
ing is an infr ingement under t he cur r ent law
and t hat , in t he face of massive sales dis-
placement and loss of r evenues, legislat ion
for addit ional enfor cement is needed t o make
copyr ight pr ot ect ion mor e t han an empt y
r ight .
14
General application of the fair-use doctrine
to home copying may be premature because
home copying is a private use and the legal
status of private use is ambiguous.
Absent ot her st at ut or y guidance, however ,
fair use has been applied t o legal cases involv-
ing home copying. Amer ican cour t s have ex-
amined home copying wit h videocasset t e r e-
cor der s (VCRs). In 1984, aft er a ser ies of
conflict ing lower cour t judgment s, t he Su-
pr eme Cour t det er mined t hat under cer t ain
cir cumst ances, t he t aping of a video wor k in
it s ent ir et y for wat ching lat er would be allow-
able under t he doct r ine of fair use. The scope
of t he Supr eme Cour t s holding was expr essly
limit ed t o home video r ecor ding of over -t he-
air , commer cial br oadcast ing for t ime-shift -
ing pur poses. The holding did not addr ess t he
t aping of cable or pay t elevision, or t he issue of
libr ar y building of r ecor ded pr ogr ams.
15
gu.s. ConWess, House Commit t = on t he J udiciar y, R epor t Accom pa n yi n g S .22, Ser ial No. 94-1476 Sept embr 1976.
10H. ~=n, ~ ]etter t. J . W
i n
s t
on)
oT~ May 2, 1989 (enc]osur e wit h comment s on dr t i Ch. 5, p. 2). WS member ship in-
cludes t he major U.S. r ecor ding companies.
1 IGar y J . Shapir o, EIA, let t er t o D. Weimer c/o OTA wit h comment s on dr afl ch. 5, Apr . 28, 1989, p. 3. EIAs member ship includes
consumer -elect r onics and blank-t ape manufact ur er s.
Iz(_+r it er ia t . & consifier ~ (b
y
t h
e
Coufis) i
n
det er mining whet her a c]~med infr ingement is act ud]y a fair use ar e given in SW.
107 of t he Copyr ight Act of 1976 (Tit le 17 U. S.C. ). The Act specifies ot her limit at ions on exclusive r ight s of copyr ight holder s.
%-h-y J . Shapir o, EIA, let t er t o D. Weimer wit h comment s on dr aft ch. 5, Apr . 28, 1989, pp. 1, 4-5.
14H ~sen, RIAA, ]etter t. J . Winst on) OTA, Ma y 2, 1989 (enclosur e wit h comment s on dr all ch. 8, pp. 1-2; enclosur e t it h comm
on dr & ch. 9, p. 1).
ISUnLuema/ ci~s~~~~, Inc. . SonyCoW. of ~e~m ) 480F. Supp. 429 (D. C!. cd. 1979), WUd, 659 F. 2d % (9t h Cir . 1981), mud, 464
Us. 417 ( 1984).
Chapter lSummary , Is s ues and Options . 7
Cop yr i gh t a n d New Tech n ologi es
New Tech n ologi es a n d t h e Goa ls of Cop y-
r i gh t --All U.S. copyr ight law, including t he
Copyr ight Act of 1976, pr oceeds on t he as-
sumpt ion t hat effect ive and efficient copying
is a lar ge-scale, publicly visible, commer cial
act ivit y, and t her efor e, t hat legal pr ohibit ions
against unaut hor ized copying ar e enfor ceable.
This assumpt ion, which was valid 20 year s
ago, is being ser iously challenged t oday be-
cause t echnology pr ovides consumer s wit h
t he capabilit ies t o be pr int er /publisher , on a
smaller , less-visible scale.
As defined in t his r epor t , pr ivat e use such
as home copying differ s fr om commer cial
pir acy in t hat t he copies ar e not sold commer -
cially. But copyr ight pr opr iet or s now ar gue
t hat t he aggr egat e economic effect of indi-
viduals pr ivat e use is equivalent t o commer -
cial pir acy. 16 They claim t hat pr ivat e uses, like
home audiot aping, depr ive copyr ight owner s
of r evenues, r educe incent ives t o cr eat e and
disseminat e new cr eat ive wor ks, and discour -
age newcomer s fr om ent er ing cr eat ive pr ofes-
sions. Repr esent at ives of t he r ecor ding indus-
t r y, for example, hold t hat home t aping of
pr er ecor ded or br oadcast music fr equent ly
displaces sales of r ecor ds, pr er ecor ded cas-
set t es, and CDs, and t her eby r educes t heir
r evenues. In t ur n, t hey ar gue, t his r educes t he
number and var iet y of wor ks t hey find pr ofit -
a ble t o pr oduce a nd dist r ibut e, so t ha t
st akeholder s including per for mer s, st udio
musicians, songwr it er s, and music publish-
er s ar e depr ived of ear nings. Mor eover ,
some claim t hat t he gr eat est har m fr om home
audiot aping falls on new ar t ist s and songwr it -
er s, and on t hose in less popular genr es (like
classical music), so t hat diver sit y is subst an-
t ially r educed. They also claim t hat home
copying r educes incent ives t o ent er or st ay in
cr eat ive fields like music or songwr it ing, and
limit s t he pool of new t alent .
17
Repr esent at ives of t he consumer -elect r on-
ics indust r y and advocat es of home audiot ap-
ing challenge t hese claims by asser t ing t hat
home t aping does not necessar ily under mine
t he Copyr ight Act s int ended balance bet ween
t he r ight s of pr opr iet or s and t he r ight s of t he
public. They ar gue t hat home t aping can
st imulat e sales of r ecor ded music by incr eas-
ing int er est in music gener ally and by br oad-
ening t he mar ket for r ecor ded music. Mor e-
over , t hey cont end t hat t he linkages bet ween
indust r y r evenues/r oyalt ies and cr eat ive in-
cent ives ar e complex, and t hat r est r ict ing
home t aping would not necessar ily r esult in
mor e employment in t he ar t s or mor e var iet y
and widespr ead disseminat ion of cr eat ive
wor ks. 18
New Tech n ologi es a n d t h e Bou n d a r i es of
Cop yr i gh t -Ne w uses of technology can ex-
ploit persistent ambiguities in existing laws.
S ometimes this can have the effect of lawmak-
ing. This may be happening t o copyr ight . The
r ecor ding indust r y consider s t hat legal ambi-
guit ies and t he incr easing ease of making cop-
ies have been exploit ed t o t he point wher e con-
sumer s believe t hat t hey have a r ight t o
t ape. On t he ot her hand, t echnological copy
pr ot ect ions, if adopt ed by r ecor ding compa-
nies and/or r ecor der manufact ur er s, will ef-
fect ively t ake away t his r ight . Fr om t he
publics viewpoint , t his would be equivalent
t o a change in t he law.
The pr ivat e use of copyr ight ed wor ks r aises
quest ions about t he degr ee of pr ot ect ion copy-
r ight pr opr iet or s should be gr ant ed, mecha-
nisms t o enfor ce t hat pr ot ect ion, and t he way
160 TA.CIT-302, op. cit ., foot not e 2, p. 194.
17For an elabor at ion of t hese views, see: HomeAudio Recor dingAct , Hear ings Befor e t he Commit t ee on t he J udiciar y, U S. Sen-
at e, and it s Subcommit t ee on Pat ent s, Copyr ight s and Tr ademar ks, 99t h Cong., lst , 2nd sess., Hear ings on S. 1739, Oct . 30, 1985, Mar .
25 and Aug. 4, 1986.
18For ~ e]a~]r at ion of t hese views, see Hear ings on S. 1739, Op. cit ., foot not e 17.
in which t he degr ee of pr ot ect ion should de-
pend on t echnological change.
19
Congr ess is
being asked t o define an appr opr iat e bound-
ar y bet ween pr opr iet or s r ight s and t hose of
user s.
Copyr ight issues r aised by home audio- or
videot aping ar e par t of br oader quest ions
about t he gener al st at us of home copying and
ot her pr ivat e uses. Th e qu est i on r ema i n s
wh et h er t h e over a ll object i ves of cop yr i gh t
a r e best ser ved by gr a n t i n g cop yr i gh t p r o-
p r i et or s exclu si ve r i gh t s over h ome cop yi n g,
i n clu d i n g t h e r i gh t t o be comp en sa t ed for
a n d /or t o p r even t h ome cop yi n g.
Up t o now, t he cour t s have made explicit ,
limit ed, niche-or ient ed det er minat ions about
cases involving home copying and ot her pr i-
vat e uses. Since t her e is no ot her specific
st at ut or y guidance, cour t s have made t heir
det er minat ions accor ding t o t he doct r ine of
fair use (see above). Leaving t hese det er mina-
t ions t o t he cour t s, as specific cases ar ise, has
a llowed Congr ess t o a void pr ema t ur e or
shor t -lived copyr ight legislat ion, and has
helped maint ain flexibilit y in t he face of
changing t echnologies. Cur r ent t echnological
and business t r ends, however , may make an
explicit congr essional definit ion of t he legal
st at us of home copying mor e desir able in or -
der t o r educe legal and mar ket uncer t aint ies
and t o pr event de fact o changes t o copyr ight
law t hr ough t echnology.
These t r ends ar e:
q The movement t o digital representations
of music, video, and ot her t ypes of ent er -
t ainment and infor mat ion available t o
consumer s. Wit h t hese come new r ecor d-
ing t echnologies for home use, and mor e
power ful means for home user s t o int er -
act wit h and manipulat e wor ks, as well
as t o make der ivat ive wor ks.
The erosion of niche boundaries used t o
cat egor ize copyr ight able wor ks accor d-
ing t o t heir cont ent (e.g., audio, video,
comput er soft war e) or physical for mat
(e.g., audiot ape, videot ape, comput er
disk).
The emer gence of new delivery infra-
structures t o br ing music, video, and
ot her for ms of infor mat ion and ent er -
t ainment int o t he home (e.g., fiber opt ic
cable, pay-per -view and int er act ive cable
ser vices).
The effor t s of some copyr ight pr opr ie-
t or s (e.g., in sound r ecor dings and mo-
t ion pict ur es) t o develop and implement
technological means for copy-protection.
These will likely r equir e congr essional
appr oval for r easons of ant it r ust exemp-
t ion and/or legal enfor cement .
Ext ent of Home Copying and I t s Economic
Effect s
P r evi ou s Emp i r i ca l An a lyses a n d Di sa gr ee-
men t s Much of t he debat e on home copying
has focused on sur veys and economic analyses
t o suppor t or r ebut copyr ight pr opr iet or s
claims of economic har m.
20
For example, r e-
cor ding companies and RIAA have sponsor ed
sever al such st udies over t he past dozen year s
IYkchnologicaI changes can expand t he scope and power of pr ivat e uses, offer ing new capabilit ies for individuals t o r epr oduce copy-
r ight ed mat er ial at home, manipulat e it t o make der ivat ive wor ks, and/or fur t her disseminat e it . At t he same t ime, new t echnologies
can be used t o cont r ol pr ivat e uses for example, r est r ict ing copying and, t her eby, pr ivat e disseminat ion and t he making of der ivat ive
wor ks.
See also OTA-CIT-302, op. cit ., foot not e 2, ch. 7.
~Economic hum is one of t he four cr it er ia used by t he cour t s t o det er mine if an al]eged infr ingement of copyr ight is ft ir use. AS
discussed above, applicat ion of t he fair -use cr it er ia maybe pr emat ur e because cur r ent legislat ion is ambiguous as t o whet her copy-
r ight pr opr iet or s r ight s ext end t o pr ivat e use like home copying. Never t heless, har m is r elevant t o t he debat e because in consider ing
whet her pr opr iet or s r ight s should ext end t o pr ivat e use, Congr ess may wish t o t ake t he economic consequences of pr ivat e uses int o
account .
Chapter 1Summary , Is s ues and Options . 9
Photo Credit: Dave Maley, Ithaca College
Elect r oacoust ic music st udio
(see t able 6-1 for a summar y of t hese). Alan RIAA did not t ake int o account t he benefit s of
Gr eenspan pr esent ed t he r esult s of t he most home t aping for consumer s, or t he st imula-
r ecent , by t he consult ing fir m Townsend & t ive effect s of home t aping on sales of r ecor d-
Gr eenspan, in 1985 t est imony. The t est imony
ings. But HRRC did not offer quant it at ive es-
included an est imat e of r ecor ding-indust r y
t imat es of t heir own t o count er RIAA claims.
r evenue losses due t o home t aping (see ch. 7
for det ails). These findings wer e r ebut t ed by
Some of t he ot her unr esolved cont ent ions
t he elect r onics indust r y and Home Recor ding
fr om pr evious RIAA and HRRC sur veys and
Right s Coalit ion (HRRC), who ar gued t hat
economic analyses have st emmed fr om t heir
Townsend & Gr eenspans est imat es over -
under lying assumpt ions, as well as fr om t he
st at ed t he amount of t aping being done and
sur vey designs. We conclude t hat t he ear lier
t he ext ent t o which home t aping displaces st udies wer e insufficient a s a ba sis for
sales. Mor eover , t hey ar gued, t he st udies for policymaking, mainly because t he met hod-
Photo Credit Optical Disc Mastering
Infor mat ion is r ecor ded on a CD as a ser ies of t iny pit s.
ologies and dat a for t he sur veys used in t he
st udies wer e not published in t heir ent ir et y,
pr event ing independent analysis or ver ifica-
t ion. Ther e wer e ot her met hodological fact or s
t hat limit ed t he usefulness of t he ear lier st ud-
ies, and a new OTA sur vey was designed t o ad-
dr ess t hese fact or s.
21
One a r ea of cont inuing disa gr eement
among indust r y st akeholder s is whet her only
t he alleged effect s of home t aping (or a t aping
ban) on r ecor ding-indust r y r evenues should
be consider ed for policy for mulat ion, as op-
posed t o also consider ing effect s on consum-
er s benefit s or blank-t ape r evenues.
22
A cor ol-
lar y t o t his disagr eement is whet her alleged
lost revenues or lost profits and royalties r e-
sult ing fr om home copying should be t he ba-
sis for est imat ing claims of economic har m.
Esp eci a lly gi ven t h e a mbi gu ou s lega l st a t u s
of h ome cop yi n g, OTA con si d er s i t a p p r op r i -
a t e t o exa mi n e effect s on con su mer s, a s well
a s on i n d u st r y. The Recor ding Indust r y Asso-
ciat ion of Amer ica, Inc. posit ion is t hat home
audiot aping of copyr ight ed music violat es
cur r ent copyr ight law, and t hat t he only r ele-
vant issue is t hat t he indust r y is ent it led t o ab-
solut e pr ot ect ion of it s music. Ther efor e,
RIAA consider s t hat only t he effect on r ecor d-
ing-indust r y r evenues, r eflect ed in sales dis-
placement , is r elevant .
23
Advocat es of home
r ecor ding like t he Home Recor ding Right s
Coalit ion and Elect r onic Indust r ies Associa-
t ion consider t hat (noncommer cial) home
t aping is legit imat e under t he cur r ent law.
HRRC believes t hat t he effect of copying or
copyr ight policies on consumer benefit s is
also r elevant . Fur t her mor e, HRRC ar gues
t hat only t he impact of t aping on indust r y
pr ofit s and r oyalt y payment s t o per for ming
ar t ist s and cr eat or s of wor ks should be consid-
er ed not gr oss r evenues t o r ecor ding compa-
nies because pr ofit s and r oyalt ies ar e t he in-
cent ives t hat det er mine t he supply of new
wor ks.
24
The differ ence in r elat ive magnit udes (gr oss
r evenues ver sus pr ofit s and r oyalt ies) is sub-
st ant ial. In his 1985 t est imony on behalf of
plThe sumey dat a obt ained for W and HRRC wer e based on differ ent unit s of analysis (t apes V. t apings) S0 t hat t he st udies
dispar at e findings could not be r econciled. The st udies did not explor e t he effect s of home copying, or of pr oposals t o r est r ict or elimi-
nat e it , on societ ys net economic welfar e. The st udies focus on act ive t aper s, as opposed t o t he gener al populat ion, did not per mit
analysis for t he populat ion at lar ge, or fully consider whet her t aper s and nont aper s had differ ent per cept ions as t o t he fair ness of
home-t aping pr act ices and alt er nat ive policies t o r est r ict t aping. Finally, t he RIAA st udies est imat ed lost indust r y r evenues, not lost
pr ofit s and r oyalt ies (over st at ing har m), and did not fully t ake pr ice and demand effkct s int o account .
The OTA sur vey addr essed t he fir st t hr ee of t hese point s. However , absent indust r y dat a wit h which t o est imat e pr ice-cost mar g-
ins, t he OTA analyses wer e also for ced t o assume t hat pr ices r emained const ant in t he shor t t er m and t o focus on t he effect s oft aping
on r evenues (r at her t han pr ofit s and r oyalt ies), which t ends t o over st at e indust r y effkct s. See ch. 6 and ch. 7 for mor e det ails.
zzThe net effmt on s~iet ys ~onomic We]fme can be appr oximat ed as t he sum of t he effect s on r ecor ding-indust r y r evenues, blank-
t ape indust r y r evenues, and consumer s benefit s.
23H. ~sen, R
ecor
di
ng
Industw As~iation of Amer ica, Inc., let t er t o OTA, May 2, 1989 (enclosur e wit h comment s on dr t i ch. 8, pp.
1-2).
NGw J . Shapir o, ~~~ S. Schwt iz, and St even R. Br enner , Home Recor ding Right s Coalit ion, r ner nommlur n t o OTA wit h COm-
ment s on economic issues, May 1, 1989, pp. 7-10.
. .
Chapter lS ummary, Issues and Options .11
RIAA (see ch. 7), Gr eenspan est imat ed t hat 40
per cent of alleged lost r evenues r epr esent ed
compensable losses t o copyr ight owner s
and cr eat or s (including t he r ecor ding compa-
nies). Consider ing t he r ecor ding-indust r y
r ule-of-t humb t hat r oyalt y payment s t o per -
for ming ar t ist s and copyr ight owner s ar e
about 20 per cent of t he wholesale pr ice of a r e-
cor ding, an est imat e of 40 per cent (of r eve-
nues) for pr ofit s and r oyalt ies seems high.
The OTA Su r vey on Cu r r en t Home Cop yi n g
P r a ct i ces a n d Mot i va t i on s Many of t he ar -
gument s for and against t he pr oposed legisla-
t ive solut ions t o t he per ceived pr oblem of
home t aping hinge on empir ical st udies spon-
sor ed by fir ms and indust r y gr oups wit h a fi-
nancial st ake in t he out come. These include
sever al sur veys of home audiot aping behav-
ior s and at t it udes. Congr essional concer ns
about t he t imeliness, bias, and cr edibilit y of
t hese sur veys led OTA t o engage a cont r act or
t o under t ake a new sur vey. OTA used an open
development pr ocess t o design a sur vey t hat
would be useful t o Congr ess yet would pr ovide
dat a for ot her s t o assess t he economics of
home audiot aping as well. The quest ionnair e
and r esult ing sur vey dat a ar e available t o t he
public t hr ough t he Nat ional Technical Infor -
mat ion Ser vice. Her e ar e t he highlight s of t he
sur vey findings:
Audiotaping Four in t en of a nat ionally r ep-
r esent at ive sample of per sons aged 10 and
over have t aped r ecor ded music (eit her fr om a
br oadcast or fr om a r ecor d, pr er ecor ded cas-
set t e, or compact disc) in t he past year . This
finding is similar t o a 1982 sur vey, but lar ger
t han 10 year s ago, when sur veys found t hat 21
t o 22 per cent of t he populat ion had t aped in
t he pr eceding year . Music t aper s, in gener al,
seem t o have a gr eat er int er est in music and
pur chase mor e pr er ecor ded music t han peo-
ple who dont t ape. The major it y of nont aper s
do not list en t o r ecor ded music. See t able 6-2
for year ly music pur chases and t apings est i-
mat ed fr om OTA sur vey r esult s. )
Pr er ecor ded audiocasset t es ar e t he most
fr equent ly pur chased music for mat . How-
ever , t he sur vey finds t hat t aper s mor e fr e-
quent ly copy fr om r ecor ds t han fr om t apes.
People who pur chase a pr er ecor ded it em wit h
t he int ent ion of t aping it (as did about one-
sevent h of t he sample) ar e far mor e likely t o
pur chase a r ecor d or CD t han a pr er ecor ded
audiocasset t e. Many people seem t o copy for
t he pur pose of place-shift ing, t hat is, copy-
ing music fr om r ecor ds and CDs t o casset t es
t hat ar e used in aut omobile and por t able cas-
set t e decks.
The sur vey finds t hat a lar ge major it y of
people who copied fr om pr er ecor ded music in
t heir last t aping session copied t heir own r e-
cor ding for t heir own use. They usually copied
wit h t he int ent ion of keeping t he t ape per ma-
nent ly. About one-fift h made copies for a
fr iend or copied a bor r owed it em.
25
Few copies
wer e made fr om homemade t apes.
People who t aped fr om r adio br oadcast s
wer e less likely t o copy full albums t han t hose
who copy r ecor ds, casset t es, or CDs. In about
half of t he most r ecent t apings of pr er ecor ded
it ems, whole albums wer e t aped.
Sur vey dat a suggest t hat home t aping dis-
placed some sales of pr er ecor ded pr oduct s.
But t hey also suggest a st imulat ive effect on
sales. That is, home copying helps adver t ise
songs and per for mer s. In addit ion, a signifi-
cant number of pur chaser s bought pr er ecor d-
ed pr oduct s wit h t he int ent ion of copying
t hem.
25 The OTA sumey ~]i[] not K,nd much evidence of ext ensive or int ensive copying net wor ks or widespr ead member ship in music
swap clubs.) Of t he 1,501 individuals sur veyed, 261 r epor t ed bor r owing audio r ecor dings fr om per sons out side t heir household. Of
t hese, about t hr ee-four t hs bor r owed fr om only t hr ee or fewer per sons, and bor r owed t o copy r ar ely or a few t imes a year . Only 16
r espondent s r epor t ed belonging t o a music swap club.
12 q Copy right and Home Copy ing: Technology Challenges the Law
Ta ping of noncopyr ight ed ma t er ia l oc-
cu r r ed mor e fr equ en t ly t h a n t a pin g of
pr er ecor ded music. Per haps t hr ee-four t hs of
t aping incident s wer e for somet hing ot her
t han music. Tapes of noncopyr ight ed mat e-
r ial var y widely in t ype, lengt h, and last ing
value, wit h some, like answer ing machine
messages, being r eused oft en.
The sur vey finds t hat availabilit y of dual-
casset t e and high-sped dubbing capabilit y
had lit t le t o do wit h t he number of homemade
t apes. People wit h many homemade t apes, or
wit h few, or even none, seemed t o own equip-
ment wit h t hese capabilit ies in r oughly simi-
lar pr opor t ions. Thus, for analog r ecor ding at
least , dual- or fast -dubbing t echnology did not
seem t o be dr iving copying behavior .
Contrasts Between Audiotaping and Vide-
otaping Videocasset t e r ecor dings, unlike t heir
audio count er par t s, wer e lar gely made for
t empor ar y use. Most videot aping fit s t he defi-
nit ion of t ime-shift ing out lined in t he Su-
pr eme Cour t s 1984 S ony decision (see above).
A few specific t ypes of pr ogr ams-including
concer t s and educat ional shows wer e copied
for per manent use.
The sur vey finds t hat , while t elevision t ap-
ing was common among VCR owner s, copying
ot her videot apes was less common. Of t he
t apes copied, only a minor it y belonged t o t he
copier . Some or iginals wer e r ent ed fr om video
st or es, but t he bulk wer e obt ained fr om
fr iends. Thus, t her e appear s t o be a modest
level of exchange of videot apes among fr iends
for t he pur pose of copying.
26
While t he sur vey found a somewhat higher
incidence of video copying among music t a-
per s t han among nont aper s, t her e was no
st r ong connect ion bet ween video- a n d
audiot aping behavior . The sur vey finds t hat
home video and home audio copying wer e
done by differ ent people, for differ ent r easons.
Public Opinions About Home Copying Most
member s of t he public wer e unfamiliar wit h
copyr ight law and it s applicat ion t o home t ap-
ing. Never t heless, t hey had opinions on t he
nor ms of accept able behavior in home t aping.
In gener al, t he publicbot h t aper s and non-
t aper s believe t hat it is accept able t o copy a
pr er ecor ded it em for ones own use or t o give
t o a fr iend. The only copying t hat was univer -
sally consider ed unaccept able by t aper s and
nont aper s was copying a t ape in or der t o sell
i t .
2 7
Most member s of t he public had no not ion
whet her home copying was fair t o t he r ecor d-
ing indust r y, t o per for mer s, or t o t he con-
sumer . They did, however , st r ongly oppose all
t he t est ed suggest ions for changes in t he sys-
t em t hat would impose user fees or limit t ap-
ing t hr ough t echnological fixes.
OTAs Econ omi c Analysis-OTA commis-
sioned t hr ee independent economic analyses.
The analysis by Michael Kat z developed a
t heor et ical fr amewor k for analyzing t he eco-
nomic effect s of home copying. It shows t hat
t he effect s of pr ivat e use, including home
copying, on economic efficiency and on socie-
t ys economic welfar e ar e complex and am-
biguous. The effect s of pr ivat e use depend
cr it ically on t he assumpt ions about demand
for or iginals and copies and t he effect s of
copying on t he long-t er m supply of new
wor ks. Choosing among assumpt ions about
under lying fact or s is a subject ive pr ocess.
Some of t he most cr ucial fact or s ar e ver y diffi-
cult t o measur e and sever al alt er nat ive as-
sumpt ions may be equally plausible for ex-
ample, t he ext ent t o which consumer s would
zeof t h
e
&j sumey r espondent s who r epor t ed ever bor r owing a videot ape, t he major it y r epor t ed t hat t hey r ar ely or never bor r owed
t o copy. Of t hose who did, vir t ually all r epor t ed doing so only a few t imes a year .
zTBut t he Younwst r es~ndent s (ages 10-14) wer e almost neut r al on t his issue t he unaccept abilit y of se]]ing home copies in-
cr eased wit h age.
Chapter lSummary , Is s ues and Options q 1 3
incr ease pur chases of pr er ecor ded music, ab-
sent home t aping. Thus, t he same sur vey in-
for mat ion can suppor t widely differ ent est i-
mat es, yet t his t ype of uncer t aint y is unlikely
t o be r educed by mor e dat a.
William J ohnson used t he OTA sur vey t o
examine some of t he fact or s t hat influence
home audiot aping and pur chasing or iginals.
J ohnson found t hat individual choice bet ween
copying and buying or iginals is det er mined in
par t by t he per sons value of t ime: a per son
who values his t ime highly t ends t o copy less
and buy mor e. J ohnson also found t hat in-
come incr eases t he demand for bot h copies
and pur chases and t hat copying is mor e con-
cent r at ed among t he young. He was unable,
however , t o det ect st at ist ically significant es-
t imat es of t he ext ent t hat copies subst it ut e for
or iginals.
Fr ed Manner ing used sur vey dat a on t he
consumer s choice of for mat for list ening t o
music t o est imat e economet r ic models of con-
sumer s choice bet ween pur chasing r ecor ded
music and t aping it . He used t hese est imat es
t o det er mine t he change in consumer s eco-
nomic welfar e (based on t heir valuat ion of
homemade t apes) in r esponse t o a hypot het i-
cal ban on home audiot aping. In addit ion, he
est imat ed hypot het ical changes in r ecor ding-
indust r y r evenues (under var ious assump-
t ions about t he degr ee t o which home t apes
displace and/or st imulat e sales of r ecor ded
music) and hypot het ical changes in blank-
t ape r evenues (assuming fewer blank t apes
wer e sold absent copying). While t he scenar io
of a ban is ext r eme, it allows t he change in r e-
cor ding-indust r y r evenues wit hout home t ap-
ing t o be est imat ed in a manner compar able
t o Townsend & Gr eenspans (see ch. 7), along
wit h effect s on blank-t ape indust r y r evenues
and consumer s. The net effect on indust r y
r evenues is t he sum of t he est imat ed changes
in r ecor ding-indust r y and blank-t ape r eve-
nues. The net effect on societ ys economic wel-
far e was appr oximat ed by adding t he indust r y
and consumer effect s.
Chapt er 7 discusses Manner ings analysis in
det ail, and pr esent s est imat es of t he hypo-
t het ical effect s of a ban on home t aping t hat
t he same set of sur vey and ot her dat a can be
shown t o suppor t .
28
These examples pr o-
duce a br oad r ange var ying by a fact or of
30of hypot het ical r ecor ding-indust r y r eve-
nue cha nges a bsent home a udiot a ping.
29
These var iat ions do not , however , alt er t he
qualit at ive r esult , which indicat es a consis-
t ent loss in consumer s economic welfar e and
in societ ys net economic welfar e.
The est imat ed loss in consumer s economic
welfar e r eflect s t he value consumer s place on
home t aping. It is a monet ar y valuat ion of
consumer s loss in sat isfact ion, without any
loss in actual income, aft er a t aping ban. Ab-
sent t aping, not all home t apes would be r e-
placed by pur chases. (Ot her applicat ions of
t his t ype of analysis include est imat ing t he
monet ar y value of consumer s dissat isfact ion
fr om incr eased air line t r avel t ime and t he
monet ar y value of incr eased sat isfact ion fr om
r educing t he t ime bet ween air line depar -
t ur es.
30
)
M* t ables 7-11 and 7-12.
~he var iat ions24 examples in all, shown in t ables 7-11 and 7-12 differ accor ding t o: whet her bot h pr er ecor ded and br oadcast
music t aping or only t aping fr om pr er ecor ded sour ces is banned, whet her an at t empt is made t o cor r ect for business use of blank t apes,
how much Salesdisplacing mat er ial is assumed t o be on each t ape, how t he OTA sur vey quest ions on displacement ar e int er pr et ed
and/or discount ed t o pr oduce a sales displacement r at e, and whet her t he abilit y t o make home t apes is assumed t o st i mu lat e some
pur chases of pr er wor ded music.
%keven Mor r ison and Cliffor d Winst on, Econ om i c Ef f ect s of Ai r l i n e Der -egu /u t z on (Washingt on, DC: The Br ookings Inst it ut ion,
19$6).
Alt hough home t aping may r educe t he r e-
cor ding indust r ys r evenues, Manner ings
analysis suggest s t hat in t he short term a ban
on audiot aping would r educe blank-t ape r eve-
nues, be mor e har mful t o consumer s t han
beneficial t o t he r ecor ding indust r y, and r e-
sult in a loss of benefit s t o societ y in t he bil-
lions of dollar s. The longer-term consequences
of a ban ar e less clear , and would depend on
how r ecor ding-indust r y pr ofit s wer e invest ed,
on how incr eased r evenues would affect t he
cr eat ion of new wor ks, on how r ecor ding com-
panies chose t o pr ice r ecor dings, on what new
t echnologies wer e int r oduced, and on how
consumer s
)
t ast es changed.
31
I n t h e lon g t er m,
t h e n et effect s on soci et ys econ omi c welfa r e
mi gh t be p osi t i ve or n ega t i ve.
Even if policy for mulat ion is based on
shor t -t er m economic consider at ions, net ef-
fect s should be consider ed along wit h effect s
on individual indust r ies and consumer s.
Based on t h e OTA su r vey d a t a , Ma n n er i n gs
r esu lt s sh ow t h er e i s n o si n gle est i ma t e of t h e
d olla r va lu es ga i n ed or lost a s t h e r esu lt of a
t a p i n g ba n .
32
A ban would have dist r ibut ional
effect s among indust r ies (i.e., r ecor ding- ver -
sus blank-t ape) and consumer s, but t hese
effect s dont balance. Inst ead, because con-
sumer benefit s fr om home t aping appear t o
be so lar ge, a ban would r esult in a lar ge net
loss of benefit s t o societ y. These net effect s
should be consider ed in policy for mulat ion. It
is pot ent ially misleading t o base policy on an
est imat e of only one of sever al har ms or bene-
fit s.
Con gr essi on a l R ol e
Congr ess faces a complex set of choices r e-
ga r din g h ome copyin g. Th e qu es t ion of
whet her t he public int er est is bet t er ser ved by
ext ending copyr ight pr opr iet or s r ight s t o pr i-
vat e use (t hus allowing t hem t o pr event or de-
mand payment for pr ivat e uses, such as home
copying) is fundament al in making t hese
choices. The next sect ion of t his chapt er dis-
cusses t he dimensions of t he policy choices
facing Congr ess, and pr esent s opt ions t o im-
plement t hem. For t he mor e specific opt ions,
t he focus is on home audio copying. The final
sect ion discusses implement at ion consider a-
t ions.
POLICY CHOICES AND
OPTIONS
I n t r od u ct i on
Some choices facing Congr ess offer br oad
alt er nat ives for act ion, cut t ing acr oss bounda-
r ies of indust r y and t echnology, and offer ing
t he oppor t unit y t o est ablish policies for t he
next decade and beyond. Ot her alt er nat ives
ar e mor e nar r owly defined wit hin a par t icular
indust r y or t echnology, such as home audio
copying or home use of DAT r ecor der s. While
mor e nar r owly defined policies may be mor e
easily for mulat ed, t heir usefulness may be
shor t er -lived, as t echnology cr eat es ot her
pr oblems.
Pr eviously, t he st at e of t echnology made an
explicit det er minat ion about t he ext ent of
copyr ight pr opr iet or s r ight s over pr ivat e use
less cr ucial t han t oday. Ther e was less pr ivat e
use and enfor cement against pr ivat e copying
was difficult . Now, t echnological changes
have lower ed t he cost and incr eased t he scope
of pr ivat e copying; at t he same t ime, t echno-
logical changes make it possible t o impose
high bar r ier s t o unaut hor ized pr ivat e copy-
ing.
al~=sslng t he ]Ong.t er m eflWt s of finmci~ incent ives on cr eat ivit y and out put would be ext r emely difiicult ~d would r e@e full
disclosur e of pr opr iet ar y indust r y dat a.
32
Depending on select ions among r easonable assumpt ions, following a t aping ban r ecor ding-indust r y r evenues might not change
much or might incr ease by sever al t ens of per cent . Blank-t ape r evenues would decline subst ant ially. See ch. 7 and t ables 7-11 and 7-12.
Chapter lSummary , Is s ues and Options q 1 5
Technological change will cont inue t o er ode
niche boundar ies based on t he cont ent or for -
mat of copyr ight ed wor ks and t her e ar e spill-
over effect s bet ween indust r ies.
33
Even quit e
specific opt ions for dealing wit h home copying
must be select ed wit hin t he br oader legal con-
t ext of pr ivat e use.
The fir st choice Congr ess faces is whet her
t o addr ess home copying issues at all at t his
t ime. If it does not act now, or avoids pr ema-
t ur e legislat ion t hat might soon become obso-
let e, t hen home audiot aping issues will likely
be r esolved wit h some delay and in a piece-
meal fashion by int er -indust r y accommoda-
t ions and/or t he cour t s. As a consequence, t he
under lying issues of pr ivat e use will likely
r esur face in ot her ar eas like home videot ap-
ing, elect r onic infor mat ion, and comput er
soft war e and r esult in legal uncer t aint ies t hat
will fur t her complicat e indust r y decisionmak-
ing. Mor eover , indust r y agr eement s may st ill
r equir e congr essional act ion t o r at ify t he
agr eement for pur poses of enfor cement or r e-
lief fr om ant it r ust . A ser ies of piecemeal ac-
commodat ions would incr ement ally define
t he boundar ies of t he copyr ight law.
If Congr ess chooses t o act now, t hen it must
choose whet her t o addr ess home copying in a
compr ehensive or limit ed fashion. Compr e-
hensive policies may be mor e long-lived, but
may t ake longer and be mor e difficult t o for -
mulat e. Limit ed policies might be developed
mor e quickly but would not r esolve par allel is-
sues in ot her ar eas. Meanwhile, home-copying
cont r over sies in t hese ot her ar eas might r e-
sult in t echnological solut ions t hat would
have t he effect of changing t he copyr ight law
t o ext end copyr ight pr opr iet or s r ight s int o
pr ivat e use. Mor eover , polices developed by
Congr ess for a specific ar ea might be ar gued
as pr ecedent s in anot her .
Wh et h er Con gr ess a p p r oa ch t o h ome cop y-
i n g i s br oa d or n a r r ow, a t h i r d set of ch oi ces
a p p li es for ea ch (or a n y) a r ea of h ome-cop y-
i n g: wh et h er t o a llow i t , fost er i t , or r est r i ct
i t . To allow) home copying would mean st at -
ing explicit ly t hat pr opr iet or s r ight s do not
ext end int o pr ivat e use. To fost er home
copying would mean not only allowing it ,
but also limit ing ant icopying measur es, in-
cluding agr eement s t o implement t echnologi-
cal copy pr ot ect ions. To r est r ict home copy-
in g wou ld mea n st a t ing explicit ly t ha t
pr opr iet or s r ight s ext end t o pr ivat e use
t hat home copying is copyr ight infr ingement .
Rest r ict ing home copying could also include
pr ovisions for legal enfor cement of copying
bans, mandat or y use of t echnological copy
pr ot ect ion, and/or compulsor y licenses and
fees for home copying.
I n t er i m, n a r r owl y foc u s e d l e gi s l a t i on
mi gh t r eli eve some of t h e p r essi n g i ssu es i n
t h e n ea r t er m, t h u s p r ovi d i n g t i me t o for mu -
la t e comp r eh en si ve solu t i on s. I f t h i s st r a t egy
i s ch osen , t h e p r efer r ed i n t er i m p oli cy op -
t i on s (p en d i n g comp r eh en si ve r esolu t i on )
mi gh t be d i ffer en t fr om t h ose p r efer r ed i f
on ly t h e n ea r -t er m vi ew i s con si d er ed . Some
i n t er i m mea su r es a r e mor e d i ffi cu lt or cost ly
t o u n d o t h a n ot h er s. For example, an int er im
home-copying r oyalt y fee could event ually be
r escinded, but t her e would be some iner t ia,
and r ecipient s may have come t o view it as an
ent it lement (e.g., as individuals have viewed
subsidized local t elephone ser vice or as con-
sumer s view t heir r ight t o make home cop-
ies). Some t echnological means for copy-pr o-
t ect ion ma y be embedded in t he wor ks
t hemselves (e.g., t he Copycode not ching); if
changes in t he law subsequent ly held t hat t he
For example, DAT can be used for comput er dat a st or age as well as audiot aping. Some indust r y obser ver s consider t hat t he cont r o-
ver sy over DAT audiot aping has afTect ed development of DAT comput er per ipher als.
pr ivat e copying did not infr inge copyr ight ,
t hen it might be difficult or cost ly t o undo t he
pr ot ect ion (e.g., consumer s who had pur -
chased player s wit h scanner chips would have
t o bypass t hem).
Advisor y panel member s fr om t he cr eat ive
and per for ming ar t s communit ies consider
home copying (which in t heir view r educes in-
come t o per for mer s and cr eat or s) t o be par -
t icular ly unfair t o t heir gr oups because, com-
par ed t o r ecor ding companies, t hey t end t o be
under funded. They see digit al copying as t he
lat est in a ser ies of t echnologies t hat has pr o-
gr essively t aken away wor k fr om per for mer s
and musicians and has incr eased t he need for
subsidies t o maint ain t he ar t s. Opinions dif-
fered among members of OTAs advisory panel
on the relative importance of home copying to
the problem of encouraging the arts. But sev-
eral panel members felt that the overall issue of
financial support for the arts deserves atten-
tion. This, however, is beyond the scope of this
study.
Fu n d a m en t a l Copyr i gh t Pol i cy
Qu est i on s
Under lying t he choices facing Congr ess ar e
fundament al policy quest ions and value judg-
ment s. For emost among t hese is t he issue of
whet her copyr ight holder s r ight s should be
ext ended t o pr ivat e use. Audiot aping has
been widespr ead for year s. Copyr ight holder s
like r ecor ding companies have been unable t o
pr event home copying unilat er ally and have
not been able t o secur e legislat ion explicit ly
est ablishing t heir r ight s over home copying
and/or home-copying r oyalt ies. Technological
changes now make it possible for copyr ight
pr opr iet or s t o r est r ict unaut hor ized copying.
However , for audio copying, implement ing
t echnological copy pr ot ect ions would r equir e
agr eement s bet ween t he r ecor ding indust r y
and audio-equipment manufact ur er s and/or
legislat ion.
34
The int ent of U.S. copyr ight law is t o ser ve
t he public int er est by joint ly pr omot ing wide-
spr ead disseminat ion of int ellect ual pr oper t y
while pr oviding sufficient incent ives for t he
cr eat ion and dist r ibut ion of new wor ks. New
t echnologies can assist in bot h goals.
New t ech n ologi es a r e a ble t o ext en d t h e
t r a d i t i on a l bou n d s of cop yr i gh t t o i n clu d e
p r i va t e u se. Th e ma jor qu est i on fa ci n g Con -
gr ess i s wh et h er ext en d i n g cop yr i gh t p r op r i e-
t or s r i gh t s t o p r i va t e u se i s n ecessa r y t o ser ve
t h e p u bli c i n t er est .
35
Ot her quest ions concer n t he r ight s of t he
ar t ist or cr eat or ver sus t he r ight s of t he con-
sumer t o modify t he ar t ist ic wor ks. In t he
Unit ed St at es, t he cr eat ive ar t ist has t r adi-
t ionally had no pr ot ect ion or cont r ol over his
wor k once it is sold (see ch. 3). The pur chaser
has been fr ee t o use, modify, or mut ilat e t he
wor k.
36
Unt il now, t her e has been a clear dis-
t inct ion bet ween mass-pr oduced ent er t ain-
ment pr oduct s and ar t ist ic wor ks t hat ar e
unique or pr oduced in limit ed number s. New
t echnologies may pr ovide consumer s wit h t he
a4For example, micr opr messor s em~dded in r ecor der s could r ecognize copy-pr ot ect ion codes in t he soflwar e, ~ong wit h ot her
codes t hat ident ify t he specific wor k.
MOTA is ~at efu] t . D. Mou]t on for his comment s in t his r egar d. Not ing t he r apid t r ansfor mat ion of cr eat ive wor ks int o t he digit al
r ealm, and t he consequent ial impr ovement s in (lower -cost ) st or age, t r ansmission, and r epr oduct ion, Moult on consider s t hat a copy-
r ight law for fut ur e decades will have t o addr ess t he issue of compensat ion due copyr ight holder s whose wor ks ar e not t ied t o or fixed
in physical media. Towar d t his end, Moult on suggest s a br oad appr oach focusing on document ing and compensat ing t he t r ansfer and
use of such int ellect ual pr oper t y. (David Moult on, Ber klee College of Music, per sonal communicat ion, Aug. 5, 1988. )
se~me r =ent cont r over sies concer ning ar t ist s r ight s have involved mot ion pict ur es (colonizat ion and t ime compr ession) and fine
ar t s (paint ing sculpt ur es), Anot her involves t he r ight s of composer s pr ot ect ion against mat er ial alt er at ion for wor ks used for
mot ion pict ur e soundt r acks and wr it er s whose exist ing wor ks ar e lat er incor por at ed int o mot ion pict ur es (Bill Holland, U.S.
Pushes Mor al Right s for Composer s, Bilbomd, Apr . 1, 1989, p. 4.).
Chapter 1Summary , Issues and Options .17
means t o modify unique or limit ed-pr oduc-
t ion wor ks and t o cr eat e der ivat ive wor ks. The
ext ent t o which t his becomes possible de-
pends as much on t he legal st at us of t hese uses
as on t he st at e of t echnology. Thus, congr es-
sional consider at ion of home-copying poli-
cies may r equir e some at t ent ion t o quest ions
about t he br oader concept of ar t ist s r ight s
and copyr ight (see box 1-A).
Ch oi ces f or Con gr ess
The fir st decision t hat Congr ess faces is
whet her t o addr ess home-copying issues at all
at t his t ime. This is a r eal choice t o act now
or not . Eit her choice has it s mer it s. Congr ess
might choose t o r ely on t he cour t s t o r esolve
home-copying cases accor ding t o exist ing law.
Wait ing would allow t he effect s of new digit al
copying t echnologies t o become mor e evident ,
so t hat any event ual copyr ight legislat ion
could be based on r eal exper ience, r at her t han
on assumpt ions or pr oject ions fr om analog-
copying exper iences. If t he choice is not t o act
now i.e., t he choice is t o maint ain t he st at us
quo or t o avoid pr emat ur e legislat ion t hen
t he issues r aised by t he home audiot aping
cont r over sy will likely be slowly addr essed in
a piecemeal fashion by t he cour t s,
37
by t hr eat s
of lawsuit s,
38
and/or by pr ivat e ar r angement s
Box l -A Qu est i on s Con cer n i n g Ar t i st s R i gh t s a n d Pr i va t e Use
In some Eur opean count r ies a major goal of copyr ight laws is t o pr ot ect t he connect ion bet ween t he ar t ist and
his wor k t hr ough ar t ist s r ight s or mor al r ight s r ecognizing t he aut hor s cr eat ion of t he wor k and/or pr ohibit ing
t he change, mut ilat ion, or alt er at ion of ar t ist s wor ks. Ar t ist s r ight s wer e fir st r ecognized by t he Ber ne Conven-
t ion in 1928. In adher ing t o t he Ber ne Convent ion in 1989 t he Unit ed St at es specifically did not agr ee t o t he
pr ovisions for mor al/ar t ist s r ight s (see ch. 3).
. Should t he Eur opean t r adit ion of mor al r ight s be adopt ed in t he Unit ed St at es so t hat ar t ist s have con-
t inuing or per manent r ight s t o t he int egr it y of a wor k? Or , ar e t he cr eat ive, economic, and legal differ -
ences gr eat enough t hat a differ ent appr oach for dealing wit h ar t ist s r ight s is desir able?
q If ar t ist s r ight s ar e granted in t he Unit ed St at es, should t hese r ight s end at t he home, or should t hey
encompass pr ivat e domest ic uses? Should pur chaser s be able t o do what ever t hey want wit h t he wor k
wit hin t he home including modifying, enhancing, or dest r oying it ?
. If a pur chaser cust omizes a wor k t o meet his or her needs (e.g., cut s a paint ing down t o fit in t he home or
copies only favorite songs fr om an album t o make a cust om audiot ape), should t he Gover nment st ep int o
what may be a pur ely per sonal occur r ence? Wher e ar e t he boundar ies?
. If ar t ist s r ight s ar e gr ant ed in t he Unit ed St at es, can t hey be enfor ced? How, when, and by whom? What
will he t he effect on t he mar ket valuat ion of wor ks? What ar e t he pr ivacy and Fir st Amendment implica-
t ions of enfor cement over home uses?
. If ar t ist s r ight s ar e gr ant ed in t he Unit ed St at es, should t hey only addr ess financial loss, or should emo-
t ional dist r ess or a lessening of t he ar t ist s cr eat ive r eput at ion be included? Who would det er mine t he
ext ent of t hese har ms, and how? Ar guably, sit uat ions could exist wher e modificat ion of a wor k could en-
hance it aest het ically or mat er ially. Should such modificat ions const it ut e har m?
SOURCE: OTA
37 The 1984 supr eme Colifi dalslon ~~ut home videot aping is an examp]e. Alt hough t he Supr eme COUr t and Ot her cour t s have
pr ovided some guidance in h~]me-copying sit uat ions, many yuest ions and issues r emain unr esolved; t he Supr eme Cour t has pr evi-
ously infer r ed t hat Congr ess may wish t o examine such issues (see ch. 3).
38This t yp of t hr eat has ~n at ]east p~ial]y r espnsl~le for t h
e
(]e]ay~ int r oduct ion of consumer DAT machines t o t he U.S.
mar ket now 2 year s or mor e.
18 . Copy right and Home Copy ing: Technology Challenges the LAw
bet ween t he har dwar e and soft war e indust r ies
t hemselves.
39
But cour t decisions will not put home-copy-
ing issues t o r est . Issues t hat sur faced for
home audiot aping have alr eady begun t o
r esur face in ot her ar eas, like home video,
comput er soft war e, and ot her for ms of elec-
t r onic infor mat ion and ent er t ainment .
40
Ab-
sent congr essional act ion, t hese new cont r o-
ver sies might also be dealt wit hin a piecemeal
fashion, wit h indust r y or t he cour t s incr emen-
t ally delineat ing t he boundar ies of copyr ight
law. Because of ant it r ust consider at ions, Gov-
er nment involvement might st ill be sought t o
r at ify or enfor ce int r a- or int er indust r y agr ee-
ment s (see box l-B). Over t he long t er m, t his
pat t er n of t hr eat ened lit igat ion and/or r e-
quest s for special legislat ion will become cum-
ber some and cost ly t o societ y. The t echnologi-
cal t r ends discussed in t he next chapt er will
t end t o incr ease t he number , fr equency, and
complexit y of quest ions about home copying
and pr ivat e use. Fur t her er osion of niche
boundar ies can under mine piecemeal solu-
t ions. Mor eover , some copyr ight pr opr iet or s
consider t hat nonact ion could disast r ously r e-
duce economic r et ur ns fr om int ellect ual pr op-
er t y. The r ecor ding indust r y consider s t hat ,
If t he r ight s of copyr ight owner s ar e not ade-
quat ely pr ot ect ed, t he cont inued viabilit y of
our indust r y cannot be maint ained.
41
Mar ket uncer t aint ies, der iving fr om legal
uncer t aint ies,
42
have delayed or complicat ed
t he int r oduct ion of new consumer elect r onics
har dwar e and new audio for mat s (for exam-
ple, DAT and now, er asable/r ecor dable com-
pact discs), and have made mar ket solut ions
doubt ful. Ther e ar e ot her difficult ies wit h
mar ket solut ions:
43
because it is difficult t o
dist inguish bet ween copier s and noncopier s,dd
a pay at t he sour ce appr oach for copying
t hr ough t he pr icing of r ecor dings would likely
incr ease pr ices for t aper s and nont aper s alike,
wit h t he possibilit y of r educing demand for
or iginals or encour aging mor e copying. Offer -
ing copyable and copy-pr ot ect ed ver sions of
pr er ecor ded wor ks, or bundling pr oduct s
(e.g., packaging a CD and casset t e t oget her at
a discount ed pr ice) have been consider ed im-
pr act ical. However , if home copying was ex-
plicit ly declar ed not t o be an infr inging use,
t hen manufact ur er s and r et ailer s might find
it mor e advant ageous t o change pr icing or
pr oduct lines.
Similar ly, uncer t aint ies st emming fr om t he
ambiguous st at us of home copying may also
delay t he int r oduct ion of new pr oduct s and
t echnologies in ot her ar eas, per haps affect ing
t he pr ospect s for t elecommunicat ions sys-
t ems, such as fiber -opt ic cable or new media
like high-definit ion t elevision (HDTV).
45
The
effect s of t hese uncer t aint ies and delays ar e
not limit ed t o har dwar e. Incent ives t o cr eat e
ogIn e~]y Ig89, t he consumer elect r onics and r ecor d indust r ies r epor t edly began negot iat ing agr eement s r egar ding DAT machines;
t he discussions r epor t edly cent er ed on t echnical met hods t o pr event home t aping and/or fees on DAT machines or t apes. (Shig Fujit a,
Har dwar e Fir ms, Labels Closer t o Accor d on DAT, Bi l l boc+ Apr . 1, 1989, p. 1; TVDi gest , vol . 29, No. 12, Mar . 20, 1989, p. 16. )
AOFor emp]e, t her e is now a movement by t he Mot ion Pict ur e Associat ion of Amer ica (NIPW) for t mhnologicd copy-pr ot ect ion
for mot ion pict ur es deliver ed via pay cable and pay-per -view (PPV) ser vices (see ch. 2).
41 H. ~Wn, RIAA, let t er t o J . Winst on, OTA, May 2, 1989, P. 2.
q For exmp]e, a fir m t hat consider s home copying illegal is mor e likely t o seek t o pr event home copying, or t o be compen~t ed for
it , t han t o change pr icing policies t o r eflect t he added value of or iginals as a pot ent ial sour ce of copies.
43
See ch. 7.
44The prev~ence of home Copfing Vwies according t. the typ of mat er i~. For ex~p]e, most of t he OTA sur vey r espondent s had
audio r ecor ding equipment , and about half r epor t ed making home copies fr om pr er ecor ded mat er ial. By cont r ast , only about one-fift h
of t he VCR owner s had ever copied a pr er ecor ded videot ape.
4Whese new infr ast r uct ur es ar e examined in U.S. Congr ess, OffIce of Technology Assessment , Cr it ical Con n ect i on s: Commu n i ca -
t i on f or t h e Fu t u r e, OTA-CIT-4W (Washingt on, DC: U.S. Gover nment Pr int ing Office, for t hcoming)
Chapter 1Summary , Is s ues and Options q 1 9
Box 1--B I n d u st r y Agr eem en t s a n d An t i t r u st
Businesses t hat desir e t o join t oget her as an indust r y t o pr ot ect t heir economic int er est s have t wo sour ces of
pot ent ial pr ot ect ion fr om t he ant it r ust laws. Fir st , t hey may dir ect t heir act ions t owar d legislat ive or execut ive
bodies and gain pr ot ect ion under t he Noer r -Penningt on doct r ine. Since t he Noer r -Penningt on doct r ine applies
only t o gover nment pet it ion, however , Congr ess or a designat ed agency would st ill have t o appr ove indust r y
agr eement s t hat r equir e ant it r ust exempt ion. Second, t hey may r equest a pr ior review of t heir int ended act ions
by t he Ant it r ust Division of t he Depar t ment of J ust ice under 28 CFR sect ion 50.6. The Ant it r ust Division claims
not t o be const r ained by it s business r eviews, however . Also, a lar ge pr opor t ion of ant it r ust cases ar e br ought by
pr ivat e plaint iffs, and it is not clear how much pr ivat e lit igat ion is det er r ed by business r eviews.
The Noer r -P e nningt on doct r ine, init ially for mulat ed in a 1961 r ailr oad case (Eas tern R.R. Pr esi d en t Con f .
v. Noer r Mot or Fr ei gh t , I n c., 365 U.S. 127 ( 1961)), holds t hat joint effor t s by businesses t o influence legislat ive or
execut ive act ion r epr esent political act ion (pr ot ect ed by t he Fir st Amendment ), which Congr ess did not int end t o
r egulat e t hr ough t he ant it r ust laws. As t he U.S. Supr eme Cour t obser ved, t he ver y concept of r epr esent at ion
depends upon t he abilit y of t he people t o make t heir wishes known (ibid. at 37), and so effor t s t o influence
public officials, r egar dless of int ent or pur pose...do not violat e t he ant it r ust laws, even t hough i n t en d ed t o elimi-
na t e compet it ion. (United Mine Work ers v. Pennington, 381 U.S. 657,670 (1965))
Alt hough t he Depar t ment of J ust ice is not aut hor ized t o give advisor y opinions t o pr ivat e par t ies, for sever al
decades t he Ant it r ust Division has been willing (under cer t ain cir cumst ances) t o r eview pr oposed business con-
duct and st at e it s enfor cement int ent ions. A r equest for business r eview must be made in wr it ing t o t he Assist ant
At t or ney Gener al (Ant it r ust Division); t he r equest ing par t ies ar e under an affir mat ive obligat ion t o make full
and t r ue disclosur e wit h r espect t o t he business conduct for which t he r eview is r equest ed. Aft er t he r eview, t he
Division may: (i) st at e it s enfor cement int ent ion, (ii) decline t o pass on t he r equest , or (iii) t ake such ot her posi-
t ion or act ion as it consider s appr opr iat e. The Division r emains fr ee t o br ing what ever act ion or pr oceeding it
subsequent ly det er mines t hat t he public int er est r equir es. The r equest , r eply, and ot her suppor t ing infor mat ion
ar e gener ally placed in a public file, unless a fir m can make a case for wit hholding it fr om t he public. To dat e t he
Depar t ment has never br ought a cr iminal act ion wher e t her e has been t r ue and full disclosur e at t he t ime of
pr esent ing t he r equest . (Excer pt ed fr om 28 CFR, sect ion 50.6, )
Accor ding t o t he Ant it r ust Division, at t he t ime of publicat ion, t her e was no public infor mat ion as t o whet her
t he r ecor ding indust r y had submit t ed a r equest for a business r eview.
SOURCE: OTA
1 T. Br ennan, The Geor ge Washingt on Univer sit y, per sonal communicat ion, Apr . 24, 1989.
and pr oduce new t ypes of wor ks can also be af- seamless) t r ansit ion is unlikely.
46
Who bear s
fect ed, alt hough t hese effect s cannot be est i- t h es e cos t s a n d h ow t h ey a r e di s t r i bu t ed
ma t ed wit h pr ecision. The linka ges a r e ex-
among t he har dwar e indust r ies, t he soft war e
t r emely complex, and t he effect s of changing
indust r ies, consumer s, and t he gener al public
financial incent ives on t he supply of cr eat ive
depend on t he policies chosen.
47
Ch oos i n g a n
wor ks ar e ver y long-t er m.
a p p r op r i a t e ba la n ce of h a r ms a n d ben efi t s
fr om u ses of n ew t ech n ologi es i s a p oli t i ca l
What ever policy measur es ar e select ed, t he decision, not a t echnical one, in which t he
t r a nsit ion will ha ve a djust ment cost s; a public has a st ake.
d6Ther e me ~ver ~ ~sslb]e adj ust ment 5. C)ne c[)u]d ~ chmges in t he cur r ent levels and/or dist r ibut ion of indust r y cost s, r evenues,
and r oyalt ies. Anot her could be est ablishing mechanisms and inst it ut ions t o enfor ce pr ohibit ions on copying andh)r t o collect and
dist r ibut e new licensing fees. St ill anot her could be changes in t ,he wa
y
one or mor e indust r ies do business evolving t o new pr oduct s,
new t echnologies, new mar ket s.
47 The ~r r ent home-copying de~t es have been lar gely dist , r ibut ional in nat ur e, so it is not sur pr ising t hat Wlicies t o r esolve t hem
have dist r ihut .ional consequences.
Pol i cy Opt i on s
Op t i on 1: Take no act ion on home copying
at t his t ime.
Congr ess could avoid pr emat ur e r emedies
t hat might be shor t -lived, and wait unt il t he
impact s of digit al t echnologies ar e assessed.
The dr awback is t hat t he ambiguous legal
st at us of home copying might hinder cr eat iv-
it y and delay t he int r oduct ion of new con-
sumer t echnologies. Mor eover , t he home
audiot aping issue, and similar cont r over sies
in videot aping and comput er soft war e, might
lead t o piecemeal solut ions by t he cour t s or
t he indust r ies involved. The r esult s of such ac-
commodat ions might be difficult t o undo if
t hey should pr ove ineffect ive.
Op t i on 2: Deal wit h home copying in a
br oad cont ext . Consider t he gener al pr oblems
associat ed wit h copyr ight ed wor ks and t ech-
nological t r ends. Det er mine whet her t he pub-
lic int er est war r ant s allowing, fost er ing, or
r est r ict ing home copying gener ally, or specifi-
cally for cer t ain t ypes of wor ks.
By t aking t his act ion, Congr ess could est ab-
lish a r elat ively st able legal envir onment and
eliminat e some mar ket uncer t aint ies. This
may t ake sever al year s t o achieve. In t he
meant ime, mar ket and legal uncer t aint ies
would cont inue, and might lead t o indust r y
act ions such as volunt ar y t echnological
copy-pr ot ect ion. Such measur es would, in ef-
fect , ext end t he r ight s of copyr ight pr opr ie-
t or s int o pr ivat e use befor e Congr ess had de-
t er mined whet her it was in t he public int er est
t o do SO.
Op t i on 3A: Allow home audio copying.
Op t i on 3B: Allow analog home audio copy-
ing
Opt ion 3c: Allow digit al home audio copy-
ing
These opt ions would end at least some of
t he legal uncer t aint ies of home audio copying
and would fr ee fir ms t o make decisions about
pr ices and pr oduct lines in a mor e cer t ain at -
mospher e. Copyr ight pr opr iet or s, such as r e-
cor ding companies and music publisher s,
would be fr ee t o copy-pr ot ect t heir wor ks, but
clever consumer s could cir cumvent t hese
measur es. Int r a- or int er indust r y agr eement s
would be subject t o t he ant it r ust laws, but
might be accor ded special exempt ions.
Analog and digit al copying could be t r eat ed
separ at ely. Home analog copying is well es-
t ablished, and might be mor e dificult t o pr o-
hibit , r est r ict , or license t han home digit al
copying, which is not yet widespr ead in t he
Unit ed St at es. Because of it s speed and high
qualit y, digit al copying is t hought t o pr esent
t he gr eat er legal and mar ket challenge.
Opt ion 4A: Fost er home audio copying.
opt ion 4B: Fost er analog home audio copy-
ing
Opt ion 4c: Fost er digit al home audio copy-
ing
Legal uncer t aint ies would be r educed. Un-
der t hese opt ions, indust r y agr eement s t o im-
plement copy-pr ot ect ion t echnologies would
likely not wit hst and ant it r ust r eview.
Opt ion 5A: Ext end copyr ight holder s r ight s
int o pr ivat e use and pr ohibit home audio
copying by r equir ing t he use of copy-pr ot ec-
t ion t echnologies in r ecor der s and soft war e.
Opt ion 5B: Ext end copyr ight holder s
r ight s int o pr ivat e use and pr ohibit analog
home audio copying by r equir ing t he use of
copy-pr ot ect ion t echnologies in r ecor der s and
soft war e.
Op t i on 5c : Ext en d copyr igh t h older s
r ight s int o pr ivat e use and pr ohibit digit al
home audio copying by r equir ing t he use of
copy-pr ot ect ion t echnologies in r ecor der s and
soft war e.
These opt ions would incr ease t he pr ices of
har dwar e, because addit ional feat ur es (e.g.,
pr ot ect ion cir cuit r y and logic) would be r e-
Chapter 1Summary , Is s ues and Options q 2 1
quir ed. The effect s on over all demands for
har dwar e and soft war e ar e uncer t ain.
Opt ion 6A: Ext end copy-r ight holder s r ight s
int o pr ivat e use and est ablish a compulsor y li-
cense for home audio copying.
Opt ion 6B: Ext end copyr ight holder s
r ight s int o pr ivat e use and est ablish a compul-
sor y license for analog home audio copying.
Opt ion 6C: Ext end copyr ight holder s
r ight s int o pr ivat e use and est ablish a compul-
sor y license for digit al home audio copying.
Congr ess would have t o est ablish means
and cr it er ia for administ er ing and dist r ibut -
ing t he r oyalt ies, and det er mine whet her t hey
should be applied t o sales of r ecor der s, r ecor d-
ing media, or bot h.
Opt ion 7A: Ext end copyr ight holder s r ight s
int o pr ivat e use but est ablish a fr ee compul-
sor y license for home audio copying.
Op t i on 7B: E xt en d
r ight s int o pr ivat e use
compulsor y license for
copying.
Opt ion 7c: Ext en d
r ight s int o pr ivat e use
compulsor y license for
copying.
copyr ight holder s
but est ablish a fr ee
analog home audio
copyr ight holder s
but est ablish a fr ee
digit al home audio
This opt ion would br oaden t he scope of
copyr ight but would r et ain flexibilit y in r e-
st r ict ing copying or est ablishing r oyalt ies. Ob-
ser ved usage pat t er ns for t he new digit al copy-
ing t echnologies could be used as a basis for
policy, inst ead of for cing policy-maker s t o act
on assumpt ions about consumer t ast es and
behavior s.
Opt ion 8: Select fr om t he above, wit h differ -
ent t r eat ment for analog and digit al copying,
or specific t ypes of copying (e.g., mult igener a-
t iona1 copies).
Combinat ions could allow cur r ent behav-
ior s t o cont inue but could t ailor uses of new
t echnologies or pr oduct s (e.g., combining Op-
t ions 3C and 4B, or 5C and 7B, et c.).
CONSIDERATIONS FOR
POLICY IMPLEMENTATION
Di st i n gu i sh i n g Am on g T ypes of
Hom e Copyi n g
In consider ing whet her t o allow, fost er , or
r est r ict home copying, or t o t ake no act ion at
t his t ime, Congr ess must define what home
copying is.
48
Fur t her mor e, Congr ess might
wish t o set policies t hat make special pr ovi-
sions for par t icular t ypes of home copying.
St at ut or y definit ions of home copying could
be dr aft ed br oadly or nar r owly and seg-
ment ed int o cat egor ies of t ype and use.
For example, home copies may be made
fr om pur chased, r ent ed, or bor r owed or igi-
nals, or fr om br oadcast or pay-per -view mat e-
r ial. They may be made for per sonal use or for
a fr iend or r elat ive. Copies may be made for
one-t ime use or as addit ions t o a home-r e-
cor ding libr ar y.@
The benefit s consumer s der ive fr om home
copying and t he impact of home copying on
r evenues ear ned by copyr ight holder s depend
on t he nat ur e of t he copy and how it is used
(see box 1-C). Home copies ar e oft en mor e
flexible t han or iginals. They can be int er -
r upt ed, r est ar t ed, and manipulat ed; t he pr o-
gr amming can be cust omized for per sonal
48 For ~mp]e, the new British copyr ight ]aw defined t ime-shift ing and cable pr ogr amming) when declar ing t hat t ime-shift ing
of br oadcast or cable pr ogr ams was not an infr ingement .
49Note that these attributes me not inten(~~ t.& niche. sF1fic for examp]e, one cr it er ion is not whet her t he commer cial sour ce
mat er ial is audio or video but whet her or not it is pr iced for a single use or unlimit ed uses.
Box l -CAt t r i bu t es a n d Uses of Hom e Cop i es
At t r i b u t e s
The s ource of t he copyr ight ed mat er ial used t o make a home copy could be one or sever al pur chased, r ent ed,
or bor r owed har d copy or iginals (e.g., r ecor ds or commer cial videocasset t es), or or iginal mat er ial deliver ed t o
t he home by br oadcast st at ions (r adio, t elevision) or cable/sat ellit e syst em oper at or s (basic, pr emium, or pay-per -
view ser vices). The or iginal mat er ial might be int egr at ed wit h adver t ising (e.g., commer cial br oadcast t elevision
or basic cable), deliver ed wit h sur r ounding adver t ising (e.g., r adio, public t elevision, pr eviews at t he beginning
or end of a commer cial videocasset t e), or deliver ed wit hout adver t ising (e.g., pr emium cable channels).
Home copies may be made in t he ident ical format as t he or iginal, or in for mat s t hat differ in t er ms of t he
physical configur at ion (e.g., r ecor d/t ape/CD), and t he for ms in which t he or iginal and copy st or e t he wor k (e.g.,
analog or digit al). For example, a DAT r ecor der could make a digit al copy of a pr er ecor ded DAT casset t e, or it
could make a digit al copy of t he analog mat er ial on a r ecor d (by sampling t he analog signal). For mat -shift ing
(par t icular ly fr om r ecor ds t o t apes, and fr om digit al compact discs t o analog t apes) is cur r ent ly impor t ant for
home audiot aping. The OTA sur vey found t hat only about a t hir d of home audiot apes made by r espondent s
using pr er ecor ded sour ces wer e copied fr om pr er ecor ded casset t es. The bulk of home audiot apes of t his t ype
wer e copied fr om r ecor ds and CDs, pr esumably for por t able or car use. Mor eover , an or iginal maybe t he sour ce of
mor e t han one copy, alt hough t he r esult s need not be ident ical (e.g., a song may be copied ont o t wo differ ent
select ion t apes).
uses
The uses made of or iginals or home copies var y accor ding t o t hr ee dimensions: t he fr equency of use, t he
manner of use, and t he ident it y of t he user . Looking fir st at frequency of us e, w e s ee t hat an or iginal maybe
offer ed in t he mar ket place for a single use (e.g., a pay-per -view movie or spor t s event ), mult iple uses wit hin a
fr eed t ime per iod (e.g., a r ent ed videocasset t e t ape), or unlimit ed uses (e.g., a pur chased videocasset t e t ape). A
pur chased (t angible) or iginal or a home copy ar e pot ent ially available for unlimit ed uses. In pr act ice, however ,
some t ypes of home copies ar e made t o be used only t empor ar ily e.g., a t ime-shift ed t elevision ser ial or spor t s
event while ot her s ar e int ended for r epeat ed uses e.g., a homemade select ion t ape of favor it e songs, or a
homemade copy of a pr er ecor ded videocasset t e t ape.
The manner of us e of an or iginal or copy may be unint er r upt ed (e.g., or iginal br oadcast mat er ial or pay-per -
view movies/concer t s), or int er r upt ible and/or manipulable (e.g., a pur chased or iginal or homemade audio- or
videot ape t hat can be st opped and st ar t ed again aft er a r efr eshment br eak, r ewound t o cat ch a missed det ail, or
zipped past commer cials).
The i d en t i t y of t h e u ser of t he or iginal and home-made copy maybe t he same or differ ent . An owner of an
or iginal may use it t o make copies for himself or ot her s, he may r ent an or iginal t o copy, or he may bor r ow an
or iginal fr om anot her household member , or a r elat ive or acquaint ance.
SOURCE: OTA
t ast e. To t he ext ent t hat consumer s value t his t ur e t he added value for ot her r easons, or t hey
flexibilit y, t hey will pr efer copies t o or iginals. may pr efer t o sell mult iple ident ical or iginals
Or iginals t hen become mor e valuable as a (e.g., r ecor d and t ape) t han incr ease r et ail
sour ce of copies. Copyr ight pr opr iet or s may pr ices t o r ecover consumer s valuat ion of cop-
be unwilling or unable t o adjust pr ices t o ac- ies (for changing fr om r ecor d t o t ape, cust om
count for copying, t hey may be unable t o cap- pr ogr amming, et c.).
50
~OBy cont r ast , t he t r end t owar d ~y-~r -t r ~~ct ion video r ent als (see ch. 2) r eflect s in par t t he desir e of copyr ight pr opr iet or s t o
shar e in each r ent al t r ansact ion, as opposed t o set t ing a st andar d pr ice not based on usage.
Chapter lSummary , Is s ues and Options .23
For or iginal mat er ials t hat ar e suppor t ed
by adver t ising (like br oadcast or cable pr o-
gr amming), home copying ost ensibly r educes
t he value of adver t ising as well. For example,
commer cials may not be copied, or if copied,
may be zipped t hr ough.
51
For wor ks t hat
ar e ent it led t o per for mance r oyalt ies, because
t he major it y of per for mer s payment s come
fr om fees for reus e est ablished in collect ive-
bar gaining ar r angement s, some per for ming-
ar t ist and musician gr oups believe t hat t heir
income is r educed if home copying cut s down
on r epeat br oadcast per for mances.
52
Det ailed cat egor ies of home copying could
be est ablished (box 1-D),
53
but t he number en-
t it led t o special t r eat ment t hr ough public pol-
icy ar e fewer . It is pr obably pr act ical t o iden-
t ify only four t ypes of home copying t hat
might mer it special policy t r eat ment :
Copies made fr om commer cial mat er ial
t hat is pr iced accor ding t o t he expect ed
fr equency of usage e.g., r ent ed or igi-
nals or mat er ial deliver ed t o t he home on
a fee-per -use basis
54
Mult iple copies made fr om t he same
or iginal
Mult igener at ional copies (copies of cop-
ies)
Digit al copies
Tech n ol ogi ca l Copy Pr ot ect i on s
I mp li ca t i on s of Allowi n g, Fost er i n g, or Re-
st r i ct i n g Home Cop yi n g
Congr ess could fost er or r est r ict home
copying by pr ohibit ing or encour aging t ech-
nologies designed t o cont r ol it . Technological
r est r ict ions could be built int o r ecor ding
har dwar e, soft war e, and/or elect r onically
t r ansmit t ed mat er ial. If Congr ess chose t o
cont inue t he st at us quo of allowing home
copying, t hen copyr ight holder s could possi-
bly act on t heir own t o pr event unaut hor ized
copying t hr ough t echnological means.
To restrict home copying, Congr ess might
choose t o pr ohibit t he domest ic sale or impor -
t at ion of r ecor ding equipment t hat did not in-
clude a device or cir cuit t o pr event unaut hor -
ized copying (e.g., by r ecognizing special codes
embedded in soft war e or t r ansmissions). The
Commission of t he Eur opean Communit ies
1988 Gr een Paper favor ed t his appr oach t or e-
Slwhi]e many newer t e]evislon set s come ~t h r emot e cont r o] feat ur es, and some cable ser vices offer r emot e cont r ol channel selec-
t ion, for many households it was t he VCR t hat fir st br ought r emot e cont r ol int o t he home. One aspect of r emet e cont ,r ol/VCR use t hat
at t r act ed at t ent ion dur ing t he Sony case was t he pot ent ial t o not r ecor d or t o fast -for war d t ime-shift ed mat er ial past cor n mer cials.
Now, wit h r emot e-cont r ols, consumer s not only zip t hr ough commer cials dur ing playback, t hey zap fr om one channel t o anot her
dur ing commer cials while wat ching TV. As a r esult , par t icular ly wit h t he expanded offer ings on cable, consumer s (par t icular ly t hose
under age 35) ar e gr azing: flipping t hr ough channels out of bor edom or t o see what else is on. (Pet er Ainslie, Confr ont ing Nat ion of
Gr azer s, Ch a n n el s, Sept ember 1988, pp. 54-62. Ch a n n el s commissioned a nat ional sur vey of TV viewing habit s. )
A r ecent sur vey found t hat at least 66 million households have r emot e cont r ols and t hat , on aver age, viewer s wit h r emot e cont r ols or
cable usually wat ch t wice as many differ ent channels as t hose wit hout , and t hose wit h VCRs Wat ch mor e channels t han t hose wit h-
out . (Dat a fr om Commer cial Analyst s Co. and Fr ank Magid Assoc. r epor t ed in Mu l t i ch a n n el News, Oct . 31, 1988, p. 53. )
WOTA st fi int emiews wit h r epr esent at ives of per for ming ar t ist s and musicians, J u1. 13, lg~.
~aFor exmp]e, one cat eWW mi gh t con si st Ofcop i es of br oadcast mat er ial kept wit hin t he household for a sin#e manipulable use.
Anot her cat egor y might consist of copies cont aining por t ions of sever al owned r ecor dings, kept wit hin t he household and made t o
pr ovide t he mat er ial in a differ ent st or age medium for unlimit ed uses.
azThe ]at t er Wou]d inc]ude ~y-Pr -fiew offer ings. Not e, however , t hat pay-per -view is differ ent fr om dir ect elect r onic deliver y M
discussed in ch. 2. Or iginal mat er ial pur chased via dir ect elect r onic deliver y would be t r eat ed like any ot her pur chased or i gi n ~.
Alt er nat ively, pr ices for t hese ser vices could be r aised t o t ake copying int o account , or copyable and copy-pr ot ect ed ver sions could be
offer ed at differ ent pr ices.
Box 1-DPa r a m et er s of Hom e Copyi n g
Th e sou r ce of t h e ma t er i a l cop i ed :
q Tangible sour ces
Pr er ecor ded mat er ial owned wit hin
t he household
Pr er ecor ded mat er ial bor r owed fr om
out side t he household
Pr er ecor ded mat er ial t hat has been
commer cially r ent ed
. Int angible sour ces
Fr ee br oadcast mat er ial
Mat er ial deliver ed via basic cable
ser vice (e.g., br oadcast st at ions)
Mat er ial deliver ed via pr emium cable
subscr ipt ion ser vices
Mat er ial deliver ed via deliver y-on
-demand wit h per -t r ansact ion
payment
(e.g., pay-per -view)
Th e d i sp osi t i on a n d u se of t h e cop y:
q Kept wit hin t he household
. Given t o ot her s out side t he household
q Loaned t o ot her s out side t he household
Th e for ma t of t h e cop y a n d or i gi n a l:
q Sa me or differ ent st or a ge medium
(for mat shift ing)
. Mult iple (pa r t ia l) copies fr om t he sa me
or igina l
. Mu l t i pl e i den t i ca l copi es
. Mu l t i gen er a t i on a l copi es (cl on i n g
copies of copies)
. Ana log or digit a l or igina l
. Ana log or digit a l copy
Qu a n t i t y a n d qu a li t y of u se:
q Single unint er r upt ed use
. Single int er r upt ible use
. Si n gl e ma n i pu l a bl e u s e
. Mu l t i pl e u n i n t er r u pt ed
uses for a fixed t ime per iod
. Mu l t i pl e i n t er r u pt i bl e/ma n i pu l a bl e
uses for a fr eed t ime per iod
. Un l i mi t ed i n t er r u pt i bl e/ma n i pu l a bl e
uses
SOURCE: OTA
st r ict digit al copying of digit al sound r ecor d-
ings.
55
While har dwar e manufact ur er s and
consumer s might complain t hat such a law
would be a cost ly bur den, it would not be t he
fir st t ime t hat Congr ess had implement ed a
t echnica l r equir ement for domest ic con-
sumer -elect r onics sales. In 1962, Congr ess
passed t he All Channels Receiver Act ,
56
which aut hor ized t he Feder al Communica-
t ions Commission (FCC) t o pr ohibit t elevi-
sion r eceiver manufact ur er s fr om selling set s
t hat did not r eceive UHF br oadcast st at ions.
In t hat case, t he int ent was t o fost er UHF
br oa dca st ing.
In pur suit of t his policy, Congr ess could be
expect ed t o per mit pr oducer s of copyr ight ed
mat er ial (e.g., r ecor ding companies) t o embed
copy-pr ot ect ion codes in t he soft war e t hey
pr oduced (like comput er soft war e is some-
t imes pr ot ect ed), and per haps even t o r equir e
t hat br oadcast er s who played copy-pr ot ect ed
mat er ial (e.g., r adio st at ions) include any an-
t icopying codes in t heir t r ansmissions inst ead
of r emoving t hem befor e t r ansmission.
To foster home copying, Congr ess might
pr ohibit t he sale of r ecor ding equipment t hat
is engineer ed t o hinder home copying or ot her
copying deemed fair use, since such designs
would be consider ed r est r aint s of t r ade. Simi-
lar ly, Congr ess might pr ohibit user s of t he
publicly owned br oa dca st spect r um fr om
br oadcast ing ant icopy codes t hat would pr e-
vent t ime-shift ing playing at a lat er t ime.
Such legislat ion would be just ifiable on t he
same basis as t he Copyr ight Act s fir st -sale
doct r ine limit ing copyr ight pr opr iet or s
r ight s (see ch. 3). Finally, Congr ess might even
pr ohibit soft war e pr oducer s (e.g., r ecor ding
companies) fr om embedding copy-pr ot ect ion
codes in t heir pr oduct s, t hough t his would
pr obably be unnecessar y in t he absence of
sensing devices in r ecor der s.
s~om m l s~i on of t h
e
Eur owm Communit ies, Gr een PaPr on Copyr ight and t he Chailenge of Technology : Copyr i gh t I ssu es Requ i r -
i n g I m m ed i a t e At t en t i on , COM(88) 172 find, (Bns*ls, Belgium: J une 7, lg~), P. 136.
~fib]ic ]aw ~7-529, SW.. 1 (76 St at . 150, codified at 47 Uw 303(s)).
Chapter lSummary , Is s ues and Options .25
If Congr ess chose not t o act at t his t ime, or
chose t o allow home copying, t hen copyr ight
holder s, such as t he r ecor ding companies,
could act on t heir own t o fr ust r at e unaut hor -
ized home copying. Any act ions t hey t ook t o
lobby Congr ess, t he execut ive br anch, or t he
Copyr ight Office t o pr omulgat e pr ot ect ive
r egulat ions would seem t o fall under t he
Noer r -Pen n in gt on doct r in e, a n d wou ld
t her eby pr ot ect t hem against ant it r ust pr ose-
cut ion. If t he copyr ight holder s sought t o
t hr eat en har dwar e manufact ur er s t o pr event
t hem fr om mar ket ing r ecor der s t hat did not
adequat ely inhibit home copying, however ,
t hey would face a high r isk of ant it r ust law-
suit s.
If Congr ess wer e unwilling t o r equir e r e-
cor der s t o have ant icopying devices, one way
for copyr ight holder s t o possibly avoid ant i-
t r ust act ion would be t o submit a let t er t o t he
Ant it r ust Division of t he Depar t ment of J us-
t ice explaining t he economic just ificat ions for
t he pr oposed act ion and r equest ing a business
r eview. If t he Depar t ment of J ust ice concur s
t hat t he benefit s of t his pr ot ect ion out weighs
it s cost s (including r est r ict ions on fair -use
copying) t hen t hey would be pr ot ect ed against
Gover nment -init iat ed ant it r ust lawsuit s. Pr i-
vat e ant it r ust act ions could st ill be init iat ed
but t he defer ence gener ally given t o such Gov-
er nment act ions in r ule-of-r eason cases (as
t his would be) would likely discour age pr ivat e
plaint iffs.
Special indust r y exempt ions fr om t he ant i-
t r ust laws ar e r ar e and fr owned upon by t he
Depar t ment of J ust ice, and t he success of an
applicat ion for exempt ion in such cir cum-
st ances is doubt ful. Alt hough (for inst ance)
t he soft -dr ink indust r y was able t o secur e a
specia l exempt ion for it s t er r it or ia l ex-
clusivit y agr eement s,
57
it would seem unlikely
t hat Congr ess would gr ant such an exemp-
t ion, if it wer e not willing t o r equir e r ecor ding
equipment t o cont ain ant icopying devices.
Con su mer Resi st a n ce
Tech n ologi ca l cop y p r ot ect i on wou ld li k ely
fa ce r esi st a n ce fr om some con su mer s, p a r -
t i cu la r ly i n t h e ca se of h ome a u d i ot a p i n g.
58
Alt hough t he OTA sur vey found t he public
unsur e about t he fair ness of home copying t o
t he copyr ight owner s, t hey clear ly opposed
any r est r ict ions on copying. The major it y con-
sider ed changes such as copy pr ot ect ions or
fees t o be unfair (see ch. 6). Ther efor e, unless
t her e wer e legal pr ohibit ions on doing so
and per haps even if t her e wer e consumer s
might be inclined t o cir cumvent t hem if possi-
ble, or even t o pur chase devices t o cir cumvent
t he pr ot ect ion. Unless pr ohibit ed and policed,
gr ay mar ket s would likely emer ge for r e-
cor der s wit hout copy-pr ot ect ion or for modi-
fied machines.
59
P r ovi si on s for Fa i r -Use Cop yi n g
An y cop y-p r ot e ct i on t e ch n ol ogy wou l d
h a ve t o a ccommod a t e fa i r -u se cop yi n g (u n -
less t h e con cep t of fa i r u se wa s n a r r owed ) a n d
a llow cop yi n g of a wor k on ce i t s cop yr i gh t
h a d exp i r ed a n d i t wa s i n t h e p u bli c d oma i n .
60
Special classes of r ecor der s, soft war e, and/or
blank media might be r equir ed for cer t ain
~T~b]lc ~w 96-308, codified at 15 USC 3501.
~In t he case of comput er sofiwar e, COp
y
pr ot ect ion has almost disappear ed because of consumer r esist ice and pr efer ence for
unpr ot ect ed soft war e; pr ot ect ed soft war e was diflicult or impossible t o back up for ar chival pur poses or use wit h a har d disk.
s~ince 1~, t her e has &n an act ive gr ay mar ket for DAT r ecor der s.
eOFor emple, a music st udent might want t o copy a par t icular piano passage as pkiyd by t hr ee differ ent Pianist s t o St UdY
differ ences in t echnique and expr ession. Many individuals who ar e not fl~ll-t ime st udent s or pr ofessional musicians, composer s, or
songwr it er s ar e act ively int er est ed and involved in t he st udy and/or cr eat ion of music.
Some believe t hat t he pr ospect of pr ivat e use in an er a of digit al t echnologies is so disast r ous t hat t he doct r ine of fair use it self
should be r epealed. (Er ic Fleischmann, The Impact of Digit al Technology cm Copyr ight Law, J ou r n a l of t h e Pa t en t Of i S oci et y, vol.
70, J anuar y 1988, pp. 5-26. )
26 q Copy right and Home Copy ing: Technology Challenges the LaW
Recen t Develop men t s: SCMS
As t his r epor t was being published, an
agr eement bet ween t he r ecor ding indust r y
and consumer -elect r onics manufact ur er s was
announced. The par t ies agr eed t o seek legisla-
t ion r equir ing a new DAT for mat t o cont r ol
mult igener at ional digit al copying on DAT r e-
cor der s (see det ails in box l-E). This t echno-
logical copy pr ot ect ion, called Ser ial Copy
Management Syst em (SCMS), would r est r ict
mult igener a t iona l c op y i n g of digit al
audiot apes copied fr om analog sour ces or
copyr ight ed digit al sour ces. However , fir st -
gener at ion, dir ect digit al-t o-digit al DAT cop-
ies of CDs or ot her digit al sour ces would not
be r est r ict ed.
Com pu l sor y Li cen ses
An alt er nat ive t o pr ohibit ing home copying
ent ir ely would be t o gr ant some t ype of com-
pulsory license t o home copier s, wit h or wit h-
out use of copy-pr ot ect ion t echnologies. A li-
censing syst em would also allow r ecipr ocal
ar r angement s wit h ot her count r ies for t he
payment of home-copying r oyalt ies.
One opt ion would be t o at t ach a fee t o r e-
cor der s. Alt er nat ively, a compulsor y-license-
wit h-r oyalt y could be combined wit h copy-
pr ot ect ion devices in r ecor der s, t o a llow
met er ed copying.
61
Anot her opt ion would
be t o at t ach a r oyalt y fee t o blank st or age me-
dia. The opt ion of a t empor ar ily fr ee compul-
sor y license would pr eser ve some flexibilit y
61 C)ne pr om~ appr mch t o t his would be t o se]] debit car ds, car r yinga pr eset value, which could b used t o over r ide copy-pr ot ect
codes. The car d would be inser t ed int o t he r ecor der , which would use a micr opr ocessor t o debit t he car d for t he fee and r ecor d t he
ident it y of t he mat er ial copied on t he car d or in t he r ecor der s memor y. If t he empt y car ds wer e r et ur ned, t he r ecor d of mat er ial
copied could be used t o dist r ibut e fees t o t he copyr ight owner s. (OTA st aITint er views wit h r ecor ding-indust r y engineer s, December
1988. )
For a descr ipt ion of magnet ic-st r ipe or micr ochip smar t car ds and t heir uses in debit syst ems, see: U.S. Congr ess, O!lice ofTech-
nology Assessment , Elect r onic Deliver y of Public Assist ance Benefit s: Technolo~ Opt ions and Policy Issues, OTA-BP-CIT-47
(Washingt on, DC: U.S. Gover nment Pr int ing OffIce, Apr il 19S8).
Chapter 1S ummary, Is s ues and Options .27

while est ablishing t he legal pr inciple of copy-
r ight pr opr iet or s r ight s over pr ivat e uses.
If t he licensing appr oach wer e t o be pur -
sued, Congr ess would have t o choose:
wher e t he r oyalt y fees would be levied
on t he blank r ecor ding media, on r ecor d-
er s, or bot h;
how t he r oyalt y fees would be set by
whom and accor ding t o what st andar ds;
and
how and by whom t he r evenues would be
dist r ibut ed.
Ther e ar e a r ange of opinions on all of t hese
issues. Sever al ot her count r ies have est ab-
lished home-copying r oyalt y syst ems, and
Nor way and Sweden have each est ablished a
pr ivat e-copying t ax inst ead of a r oyalt y sys-
t em. In evaluat ing t he appr opr iat eness of
t hese syst ems for t he Unit ed St at es, polit ical,
legal, social, and mar ket differ ences need t o be
t aken int o account (see ch. 5). Fur t her mor e,
some har dwar e and media might have mult i-
ple uses e.g., DAT for audiot aping or com-
put er dat a st or age. This r equir es t hat even
nar r ow opt ions (e.g., a fee on media) must
be consider ed in a br oader t echnical cont ext .
Levying t he Fees
F e e on Re cor d i n g Me d i a Th i s a p -
pr oach has been followed in sever al count r ies,
including Aust r ia, Fr ance, Finland, West Ger -
many, Iceland, Por t ugal, and Hungar y; West
Ger many and Iceland also impose fees on r e-
cor ding equipment . None of t he r oya lt y
schemes on r ecor ding media has been in place
for mor e t han a decade. Fees on t he blank me-
dia ar e based eit her on a per cent age of playing
t ime, a per cent age of t he pr ice, or per unit .
Pr oceeds ar e dist r ibut ed among t he aut hor s,
per for mer s, and pr oducer s of copyr ight ed r e-
cor dings, based on dist r ibut ion schemes de-
veloped by t he individual count r ies (see t able
5-1).
62
Pr oponent s of t his appr oach consider t hat a
fee on r ecor ding media is a mor e pr ecise meas-
ur e of how much copying is act ually being
done t han a fee on t he sale of t he r ecor ding
equipment . However , because media can be
used for pur poses ot her t han unaut hor ized
copying, it is not an exact measur e. Some pr o-
posals have consider ed making dist inct ions
bet ween differ ent t ypes of r ecor ding media,
such as t apes used for noncopyr ight ed mat e-
r ial and t hose used for t aping copyr ight ed
music. A meaningful dist inct ion by pr esumed
use can be difficult t o dr aw, however , since an
audiot ape meant t o be used for lect ur es, dict a-
t ion, et c. could just as well be used t o copy
copyr ight ed music. Dist inct ions based on dif-
fer ent fact or s such as capacit y, pr ice, or qual-
it y have been suggest ed. OTA consider s t hat
t he likely blur r ing of niche boundar ies will
make it incr easingly difficult t o dist inguish
bet ween t he var ious r ecor ding media avail-
able for example, t he same medium might
be used t o st or e copied music or comput er
dat a. Congr ess will have t o be car eful in cr aft -
ing legislat ion t o avoid being over ly specific in
using t er ms like t ape or (blank) t hat cr eat e
loopholes in t he law,
63
especially in light of
new st or age t echnologies.
64
mpr [X~s fr om b]~k+udiot ape ]evies in 1987 r ~@fr om at )out $3.2 mi]]ion in Finland t o $15.3 mi]]lOn in West @r many. Figur es
fr om 1988 indicat e t hat r evenue fr om Fr ances blank-t ape levy amount ed t o $16.3 million.
63 For inst ance one way t . avoid t h
e
f= might ~ t . se]] t apes t hat wer e not comp]et e]y blank but wer e int ended t o be r ecor ded over ,
64 fit ur e innovat ions might ent it )]e Consllmer s t . make copies on comput er disks, opt ica] discs, micr ochips, et c.
Box I -EI n d u st r y Agr eem en t Con cer n i n g DAT
On J uly 28, 1989, r epr esent at ives of t he int er nat ional r ecor ding indust r y and sever al consumer elect r onics
manufact ur er s announced t he out come of a ser ies of wor king gr oup meet ings t o negot iat e joint r ecommenda-
t ions on t echnological means t o limit DAT copying. A Memor andum of Under st anding (MOU) was signed in
At hens, Gr eece in J une 1989, and subsequent ly r at ified by t he par t icipat ing par t ies. Accor ding t o a backgr ound
paper pr epar ed by t he RIAA and EIA,
The sole pur pose of t he Memor andum is t o agr ee on joint r ecommendat ions t o gover nment al aut hor i-
t ies t he U.S. gover nment , t he Eur opean Commission, t he Gover nment of J apan, and ot her gover nmen-
t al bodies as t o a for mat for DAT t hat accommodat es public policy concer ns of consumer s, ar t ist s, and
indust r y, The only r espect in which t his Memor andum has any for ce or validit y is t he obligat ion t o sup-
por t t he agr eed r ecommendat ions t o gover nment s, and t o plan fur t her meet ings addr essing possible fu-
t ur e r ecommendat ions t o gover nment s. The Memor andum and t he discussions leading t o it do not ad-
dr ess, and have not addr essed, any pr ivat e business conduct or decisions.
The r ecommended for mat for DAT is based on a ver sion of t he Philips Solo-Copy met hod for limit ing ser ial
(mult igener at ional) copying (see ch. 2 for a descr ipt ion of t echnical alt er nat ives for r est r ict ing copying). The
for mat , now called Ser ial Copy Management Syst em (SCMS), would allow DAT r ecor der s t o be used for dir ect
digit al-t o-digit al copying, but would r est r ict making digit al-t o-digit al copies of t he copies. As pr oposed for DAT,
SCMS would not affect home t apingo n convent ional analog r ecor der s. However , only one addit ional gener at ion
of copies of DAT t apes copied fr om analog input s could be made.
In addit ion t o t he Int er nat ional Feder at ion of t he Phonogr aphic Indust r y (IFPI) and RIAA, 15 Eur opean and
J apanese consumer elect r onics companies par t icipat ed in t he wor king gr oup t hat developed t he MOU: Fujit su
Gener al Cor p., Gr undig, Hit achi Lt d., Mat sushit a Elect r ic Indust r ial Co. Lt d., Mit subishi Elect r ic Cor p., NEC
Home Elect r onics Lt d., Philips Int er nat ional B. V., Pioneer Elect r onic Cor p., Sanyo Elect r ic Co. Lt d., Shar p
Cor p., Sony Cor p., TDK Inc., Thompson Consumer Elect r onics, Toshiba Cor p., and Vict or Company of J apan
Lt d. EIA was not a par t icipat ing par t y t o t he MOU, but was r epr esent ed in At hens as an obser ver , and subse-
quent ly endor sed t he Unit ed St at es legislat ive goals r ecommended in t he MOU. SCMS st andar ds will be pr o-
posed t o t he Int er nat ional Elect r ot echnical Commission.
Accor ding t o EIA and RIAA, t he object ive of t he agr eement in t he MOU is gover nment implement at ion of
t he r ecommendat ions -i.e., mandat ing implement at ion of an SCMS st andar d wor ldwide. In t he Unit ed
St at es, t he EIA and RIAA have (as of August 1989) agr eed t o ask Congr ess t o consider legislat ion implement ing
t he r ecommendat ions and t o wor k joint ly t o suppor t it s passage. Absent legislat ion, t he par t ies ar e not bound t o
implement SCMS.
Ser i a l Cop y Ma n a gemen t Syst em (SCMS)
SCMS cont r ols ser ial digit al copying on DAT r ecor der s copying second, t hir d, and successive gener a-
t ions of DAT t apes fr om a fir st -gener at ion DAT copy. Accor ding t o an EIA/RIAA backgr ound paper , SCMS will
allow any or iginal pr er ecor ded wor k (e.g., a r ecor d, t ape, or CD) t o be copied indefinit ely ont o differ ent blank
DAT t apes. However , SCMS will limit t he number of digit al-t o-digit al copies t hat can be made fr om t he copies,
unless t he sour ce mat er ial is bot h digit al and unpr ot ect ed.
As pr oposed, t he SCMS st andar d for DAT would be implement ed wit h a special chip (r epor t edly under devel-
opment ). Wit h SCMS, t he DAT sampling r at e would he t he same as t he CD r at e, allowing dir ect digit al copying of
CDs. Alt hough ear lier consumer -model DAT r ecor der s might be r et r ofit t ed wit h t he SCMS chip once it became
available, t he ear lier models oper at e wit h a differ ent sampling r at e and do not per mit dir ect digit al copying of
CDs.
The SCMS chip would be pr ogr ammed t o r ead copyr ight coding infor mat ion alr eady in t he digit al subcode
channels of digit al r ecor dings and br oadcast s. These channels ar e separ at e fr om t he music channels and include
cat egor y codes indicat ing what t ype of digit al device is being used as t he sour ce (e.g., a CD player , whose out put
is pr ot ect ed, or a micr ophone wit h an int er nal analog-t o-digit al conver t er , whose out put is not pr ot ect ed) and
copyr ight flags indicat ing whet her or not t he mat er ial is mar ked for copyr ight pr ot ect ion. DAT r ecor der s wit h
SCMS chips would use t he combinat ion of t he cat egor y code and t he copyr ight flag t o det er mine whet her copying
Continued on next page
Chapter ISummary , Is s ues and Options q 2 9
would be per mit t ed. If so, t he DAT r ecor der would wr it e appr opr iat e copy-pr ot ect ion codes int o t he digit al sub-
code channels of t he DAT t ape being r ecor ded. For example, if t he sour ce mat er ials cat egor y code indicat ed a
d i gi t a l sou r ce (e.g., CD) and if it wer e mar ked for copyr ight pr ot ect ion, a code of 1,0 would be wr it t en ont o t he
DAT copy as it was being made. Then, if a DAT r ecor der det ect ed t he 1,0 code on digit al mat er ial, t he r ecor d
funct ion would not oper at e. By cont r ast , if sour ce mat er ial wer e being copied fr om a digit al micr ophone and wer e
not copy pr ot ect ed, t he DAT r ecor der would wr it e a code of 0,0 on t he copied t ape, and fut ur e ser ial copying
would not be limit ed.
SCMS also limit s t he number of gener at ions of copies t hat can be made of sour ce mat er ial ent er ing t he a n a -
l og i n p u t s of a DAT r ecor der . Cur r ent t echnology does not per mit ident ificat ion of copyr ight ed mat er ial in t he
analog domain. Ther efor e, mat er ial (including analog casset t es, LPs, or r adio br oadcast s) r ecor ded via t he ana-
log input s would be mar ked wit h a copy-pr ot ect ion code of 1,1 in t he DAT copys digit al subcode channel. One
mor e gener at ion of digit al-t o-digit al copies could be made fr om t his t ape; t he second-gener at ion copy would be
mar ked wit h a 1,0 code and could not be copied on a DAT r ecor der .
Ot h er Home-Cop yi n g I ssu es
The agr eement t o seek legislat ion mandat ing t he SCMS st andar d for DAT leaves open t he quest ion of r oyal-
t ies (e.g., on blank t ape and/or r ecor der s) for home copying. Accor ding t o an RIAA pr ess r elease, t he MOU st at es
t hat t he t hr ee Eur opean signat or ies acknowledge t hat t hey accept t he pr inciple of r oyalt ies and will not oppose
effor t s by t he r ecor ding indust r y t o secur e legislat ion implement ing r oyalt ies for pr ivat e copying. The J apanese
signat or ies acknowledge t hat t he r ecor ding indust r y places ext r eme impor t ance on r oyalt ies for copying t hat is
per mit t ed t o cont inue following t he adopt ion of any t echnical st andar ds. All par t ies t o t he MOU agr eed t hat t he
adopt ion of t echnical st andar ds should not be r elied upon as a basis for suppor t ing or opposing r oyalt ies.
RIAA has announced t hat , alt hough it cont inues t o st r ongly suppor t r oyalt ies t o compensat e for t he DAT
copying per mit t ed by SCMS, it will not pur sue r oyalt ies in t he 101st Congr ess. RIAA has st at ed t hat it does int end
t o pur sue r oyalt ies subsequent t o legislat ion r equir ing SC! MS.
The signat or ies t o t he MOU have commit t ed t o discuss sever al ot her copying-r elat ed issues, including r ecor -
dable and er asable compact discs (CD-R and CD-E) and development and implement at ion of SCMS in t he analog
doma in.
SOURCES: RIAA, DAT Agr eement Reached (pr ess r elease), J uly 28, 1989; RIAA and EIA, Agr eement on Recommenda-
t ions t o Gover nment as t o DAT and The Ser ial Copy Management Syst em (SCMS): How It Wor ks (back-
gr ound paper s), J uly 1989, TV Di gest , vol . 29, No. 36, Sept . 4, 1989.
If a home-copying r oyalt y wer e at t ached t o opt ing t o r ecor d music on t apes of infer ior
blank media, t he consequences for home
copying ar e unclear . Possible out comes could
include: no change in t he amount of home t ap-
ing t aking place; a decline in sales of blank me-
dia, wit h consumer s buying fewer t apes, but
r eusing t hem mor e oft en or becoming mor e
select ive in what t hey t ape;
65
consumer s buy-
ing pr er ecor ded mat er ial wit h t he int ent ion of
making mor e t han one copy t o t r ade wit h
fr iends, t her eby spr eading t he cost s; and/or in
t he case of exempt ions for cer t ain t ypes of
t apes (i.e., t apes of lower qualit y), consumer s
qualit y r at her t han t o pur chase higher -qual-
it y t ape subject t o t he fee.
F ee on Recor d i n g Equ i p men t The r at ion-
ale for t his appr oach is t hat a fee placed on t he
sale of t he r ecor ding equipment r eflect s t he
owner ship of copying equipment . However ,
t his would not r eflect t he number of copies ac-
t ually made. Unless cat egor ies of har dwar e
(or pur chaser s) wer e exempt ed, all pur chaser s
of r ecor ding equipment would pay t he fees, r e-
gar dless of whet her t he equipment was used
35 For exmple, many consumer s list en t o t heir r ecent pur chases for about a mont h and t hen llbr ar y t hem.
30 . Copy right and Home Copy ing: Technology Challenges the LaW
t o r ecor d copyr ight music. This might be
consider ed unfair by t hose who seldom or
never use t heir r ecor der s t o copy pr er ecor ded
music.
For t his t ype of r oyalt y syst em, equipment
would have t o be classified accor ding t o use,
whet her as player s or r ecor der s. It would also
be necessar y t o dist inguish bet ween r ecor der s
used for copying copyr ight ed mat er ial, such
as music, and t hose used for r ecor ding non-
copyr ight ed mat er ials, such as lect ur es and
dict at ion.
66
For all-in-one syst ems, in which
all t he component s ar e sold t oget her as one
pr oduct , it would be necessar y t o decide
whet her t he r oyalt y fee would be levied on t he
whole syst em or only on t he r ecor der .
67
If a home-copying r oyalt y wer e levied on r e-
cor ding equipment , sever al consequences for
home copying ar e possible, including: no
change in t he amount of home copying; an
over all decline in har dwar e sales; or a lag in
t he sales of new r ecor der s, wit h consumer s
opt ing t o r et ain t heir old r ecor der s r at her
t han pur chase a new one subject t o t he levy.
Fee on Bot h Media and Recor ding Equip-
ment This appr oach has been adopt ed by
such count r ies as Iceland and West Ger many.
Some pr oponent s ar gue t hat a fee on bot h t he
har dwar e and t he r ecor ding media is mor e ap-
pr opr iat e, since bot h t he har dwar e and t he r e-
cor ding media ar e necessar y for copying. They
also ar gue t hat a mor e equit able r et ur n t o t he
affect ed par t ies is ensur ed since bot h t he
manufact ur er s of t he r ecor ding media and
har dwar e will have t o shar e in t he payment s
t o t he r ight s owner s. The levy would likely be
passed on t o consumer s in t he for m of higher
pr ices.
A r oyalt y on media and equipment may give
t he impr ession t hat consumer s ar e being dou-
ble-char ged. Such per cept ions might mot i-
vat e consumer s t o buy only limit ed quant it ies
of r ecor der s capable of making home copies,
and t o pur chase player s (as opposed t o player /
r ecor der s) for t he car , t r avel, et c.
Set t i n g t h e F ees
Amou n t -A t heor et ical appr oach t o det er -
mining t he amount of a fee t o place on t he r e-
cor ding equipment and/or t ape would be t o at -
t empt t o det er mine a compr ehensive est imat e
of t he over all net financial impact of home
t aping on copyr ight holder s. Any est imat e of
t his sor t , however , depends on assumpt ions,
and differ ent assumpt ions can yield a br oad
r ange of plausible (and somet imes implausi-
ble) est imat es.
Thr ee pr act ical appr oaches used abr oad for
r oyalt ies on media ar e:
1.
2.
3.
a flat fee, r egar dless of pr ice or capac-
it y;
68
as a per cent age of t he pr ice; and
based on t he capacit y (playing t ime) of
t h e r e cor d i n g me d i u m.
69 -
In most count r ies wher e a r oyalt y on r ecor d-
ing media has been est ablished., it is based on
playing t ime, alt hough t he capacit y of new
media will var y depending on t he t ype of ma-
t er ial being st or ed (e.g., compact -disc st or age
of audio or full-mot ion video).
BeThis dist inct ion might be mor e di~cu]t t han it appear s, since a r ecor der t ypically used for r ecor ding noncopyr ight ed mat er ials
can also be used t o copy music.
6~anufact ur er s might ~so t hink abut de]et ingt he r ecor ding feat ur e fr om d-in-one syst ems if t he fee wer e ~sed on t he cost of
t he ent ir e syst em.
68~me have ~riticiz~ this approach on the Wounds that the roy~ty cm a tape of infer ior W&dit y will be t he same as t hat on one of
super ior yualit y and t he lat t er is mor e likely t o be used t o t ape r ecor ded music.
r 3~me ~]ieve t hat t he lat t er is most appr opr iat e, since playing t ime is t he best measur e of how much home ~ping is ~ingdone.
Royalt y fees on har dwar e could be based on
a flat fee or as a per cent age of t he pr ice of t he
r ecor ding equipment . A flat fee might be sim-
pler t o administ er t han one based on pr ice.
However , some ar gue a flat fee would be inap-
pr opr iat e because t he r oyalt y on an inexpen-
sive r ecor der would be t he same as t hat on one
wit h mor e feat ur es, and t he r oyalt y will be r e-
duced if it is pegged t o t he pr ice of less-expen-
sive r ecor der s.
Special fees might be adopt ed for dual-cas-
set t e and dubbing machines t hat make t ape-
t o-t ape copies. If a r oyalt y sur char ge is placed
on t his t ype of equipment , t he r esult maybe a
decr ease in t he sale of dual-casset t e r ecor der s,
as well as decr eased sales of pr er ecor ded ca s -
set t es. Home t aper s might opt t o buy mor e
CDs and r ecor ds and t ape fr om t hem.
I n ci den ce a n d Exempt ions Congr ess
would have t o decide whet her home-copying
levies would be collect ed fr om manufact ur er s
or consumer s. If t he levies wer e collect ed fr om
manufact ur er s, t hey will likely be passed on t o
consumer s t hr ough higher pr ices. If t he
manufact ur er wer e r esponsible for t he fee, de-
cisions will have t o be made as t o whet her r e-
t ailer s will have t o special or der exempt t apes/
equipment , and as t o how r oya lt y-exempt
consumer s will be able t o r ecover t he r oyalt y.
Unless t her e ar e pr ovisions for exempt con-
sumer s t o special-or der t apes and/or equip-
ment , ever yone would be subject t o incr eased
pr ices at t he point -of-sale.
If t he consumer wer e r esponsible for t he
payment of fees, it would be necessar y t o de-
cide how individuals will pr ove t hat t hey ar e
eligible t o r eceive an exempt ion. Would t hey
also have t o pr ove t hat t hey will not use t a pes/
equipment t o copy copyr ight ed music? If so,
how would t hey go about pr oving it ? What
would happen if a cust omer want s t o bu y
t apes in bulk, and doesnt yet know whet her
Photo Credit: Courtesy of Gene Bachero and the Casuals
Home musicians make pr act ice t apes
he will use t hem t o t ape lect ur es or music?
Would t hat individual be able t o pur cha se
r oyalt y-exempt t apes/equipment at t he r et ail
st or e, or will he have t o fill out a for m t o ob-
t ain a r ebat e? Eit her met hod would involve
mor e wor k for bot h t he r et ailer and t he cus-
t omer . The t ask of having t o fill out addit ional
for ms and/or pr ovide pr oof of exempt ion
might det er some individuals fr om seeking r e-
imbur sement .
It has been suggest ed t hat exempt ions be is-
sued t o pr ofessional user s, t o h a n dica pped
per sons,
70
on expor t s, on equipment or t a pe
found t o be unsuit able for t he home t aping
of music on t he basis of t echnical cr it er ia
such as r epr oduct ion qualit y (i.e., business
di ct a t i on ma ch i n es a n d mi cr o ca s s et t e
t a p e s ) ,
71
a nd on ma chines t ha t a r e not de-
signed t o copy (i.e., micr ophone-only r ecor d-
er s and playback-only devices). If exempt ions
wer e given t o pr ofessionals, t his t er m would
have t o be defined t o indicat e who qualified
for exempt i on h ome mu s i ci a n s , for exa m-
ple, ma y a lso use consumer -model r ecor der s
dur ing pr a ct ice sessions or t o wor k on new
701f exempt ions ar e ma(]e for hmdicapped per sons, would t hey be issued t o or ganizat ions r epr esent ing t hem, or t o indit iduds?
71 ~me r ~or der s, a]t hough not most suit able for r ecor ding copyr ight ed music, ar e nonet heless capable of doing SO.
32 q Copyright and Home Copying: Technology Challenges the Law
ma t er ia l. Addit iona lly, specia l pr ovisions for
fa ir -use copying, such a s pa r t ia l exempt ions
fr om t he r oyalt y, would need t o be consider ed.
Ad mi n i st er i n g a n d Di st r i bu t i n g
Home-Cop yi n g Roya lt i es
As discussed above, home-copying r oyalt ies
could depend on t he t ype of copyr ight ed wor k
being copied (e.g., r ecor ded music, t elevision
br oa dca st s, et c.) a nd/or t he ident it y of t he
copier (e.g., t he handicapped, st udent s, mem-
ber s of t he gener al public, et c.). The r oyalt y
fee might even be set ar bit r ar ily low for some
or all classes of user s.
72
The quest ion of how
t he r oya lt y scheme should be a dminist er ed
and how r oyalt y r evenues should be dist r ib-
ut ed would have t o be addr essed.
Cha pt er 5 discusses pr oposa ls for t he a d-
minist r at ion and dist r ibut ion of audio home-
copying r oyalt ies, including t he pr ovision pr o-
pos ed i n t h e Home Au di o Recor di n g Act
int r oduced in t he 99t h Congr ess. For t his dis-
cussion, we pr oceed on t he a ssumpt ion t ha t
r oyalt ies for home copying should be claimed
t hr ough efficient cent r alized collect ion/dist r i-
but ion societ ies, r a t her t ha n by individua l
copyr i gh t h ol der s ma k i n g cl a i ms a ga i n s t
ma nufa ct ur er s, impor t er s, r et a iler s, or con-
su mer s.
Ad mi n i st r a t i on Administ r at ion of a home
audio copying r oyalt y might be assigned t o an
alr eady-exist ing or ganizat ion, such as AS-
CAP, BMI, SESAC or t he Har r y Fox Agency.
73
Ot her t ypes of copying-r ight s or ganizat ions,
like t he Copyr ight Clear ance Cent er , which
collect s and dist r ibut es phot ocopying r oyal-
t ies, might also be consider ed.
74
ASCAP, SESAC, and BMI ar e per for ming-
r ight s societ ies, so using t his model would
pr esume t ha t pa t t er ns of copying a nd per -
for mance (namely, r adio air play) ar e similar .
Th e Ha r r y Fox Agen cy col l ect s mech a n i ca l
r oyalt ies (based on sales), so t hat using it s da-
t abase as a basis for dist r ibut ion would pr e-
sume t hat pat t er ns of copying and pur chasing
ar e similar and t he best -selling wor ks ar e t he
most copied. Bot h models (copying is associ-
at ed wit h air play, copying is associat ed wit h
sales) ar e ar guable; it may be t hat t he less
popula r or less a ccessible wor ks a r e copied
mor e, for convenience or beca use consumer s
do not value t hem highly enough t o be willing
t o pay t he r et ail pr ice.
75
One pot ent ia l a dva n-
t age t o using an exist ing societ ys st r uct ur e is
t hat t he administ r at ive expenses would t end
t o be lower , compar ed t o st ar t ing an ent ir ely
new or ganizat ion. The st r uct ur es of t hese par -
t icular or ganizat ions, however , ar e such t hat
r ecor ding companies and per for mer s (who ar e
not composer s or songwr it er s) would have lit -
t le say in t heir management .
Anot her possibilit y might be t o expand t he
r esponsibilit ies of t he Copyr ight Royalt y Tr i-
bunal (CRT) t o include det er mining and dis-
t r i bu t i n g h ome-copyi n g r oya l t i es , bu t t h i s
would r equir e a ddit iona l st a ff a nd funding.
Under t he compulsor y licensing pr ovisions of
t he Copyr ight Act of 1976, t he CRT (an inde-
pendent agency in t he legislat ive br anch) is
cur r ent ly r esponsible for det er mining and dis-
t r i bu t i n g r oya l t i es fr om ca bl e r et r a n s mi s -
sion a nd public per for ma nces on jukeboxes,
a n d for det er mi n i n g t h e r oya l t y r a t es for
ph on or ecor ds a n d s ome pu bl i c br oa dca s t
t r ansmissions. But cable r et r ansmissions ar e
r el a t i vel y ea s y t o mon i t or , compa r ed wi t h
home copying.
T~his Wou]d & somewhat ~aIOwUS t o t he healt h car e except ion pr oposed dur ing t he IOOt h Congr ess t o per mit t he unaut hor -
ized but noncommer cial per for mance of audiovisual wor ks for pat ient s in healt h car e facilit ies. See U.S. Congr ess, Congr essional
Resear ch Ser vice, Videocasset t e Recor der s: Legal Analysis of Home Use) Douglas Reid Weimer , J an. 10, 1989, p. 13.
Ta~ Ch. 5 for a de~r ipt ion of t hese or ganizat ions.
TZJ . men, Copyr ight C]ear ance Cent er , per sonal communicat ion, Apr . 28, 1989.
TsThe st udy!s ad~~v we] member s wer e of divided OpiniOn on t his.

A new pr ivat e or public or ganizat ion could
be est ablished. By st ar t ing fr esh, all t he bene-
ficiar ies could be given voice in t he or ganiza-
t ions management . Ther e ar e t wo disadvan-
t ages t o t his appr oach: 1) st ar t up cost s would
be higher ; and 2) it would t ake t ime t o set up
t he or ganizat ion and it s pr ocedur es. It might
t ake some t ime befor e st ar t up cost s wer e met
and t he bulk of r oyalt ies wer e act ually dist r ib-
ut ed. Mor eover , set t ing up a new or ganizat ion
is not easy or t r ouble-fr ee.
Whichever gener a l a ppr oa ch (a ugment ing
a n exist ing a dminist r a t ive infr a st r uct ur e or
es t a bl i s h i n g a n ew on e) wer e ch os en , t h e
sour ce of oper at ional funding would have t o
be det er mined whet her it was int ended t o be
self-suppor t ing (via over head char ges on col-
lect ed r oyalt ies) or suppor t ed by appr opr iat ed
funds.
Di st r i b u t i on Dist r ibut ion of audio home-
copying r oyalt ies r aises some quest ions:
Should the proceeds go as directly as pos s ible
to the pers ons and legal entities w hos e rights
are being us ed and w hos e interes ts (it has been
determined,) are being harmed by home copy -
ing? If so, t hen r oyalt y r evenues would be dis-
t r ibut ed in some fashion among est ablished
r ecor ding companies, songwr it er s and com-
poser s, music publisher s, singer s, musicians,
st udio per sonnel, et c.
76
But if Congr ess consid-
er s t hat a major r eason t o gr ant r ight s over
pr ivat e use is because of t he har m t o new t al-
ent (st r uggling ar t ist s or composer s, new act s)
and/or less popular genr es, t hen special at t en-
t ion may be war r ant ed for t hese classes of po-
t ent ial beneficiar ies.
Should the dis tribution be bas ed on s ales , per-
formances , both, neither? Basing t he dist r ibu-
t ion on sales or air play maybe inexact . Mor e
impor t ant ly, Congr ess might consider t hat ex-
t r a incent ives (via t hese r oyalt ies) ar e mor e
desir able for st r uggling or new t alent , or for
genr es like classical music. This would, how-
ever , pr omot e wor ks by new t alent at t he ex-
pense of t he est ablished, or subsidize less
popular mat er ial at t he expense of mat er ial
wit h a lar ger mar ket .
Ot her count r ies wit h home-copying r oya l-
t ies have followed a number of appr oaches t o
t he a bove,
77
and if Congr ess wer e t o est ablish
a r oyalt y scheme for home copying, it might
choose t o r eser ve at least some por t ion of t he
pr oceeds t o n u r t u r e n ew t a l en t or cer t a i n
t ypes of wor ks or per for mances, like classical
or new music. If, for inst ance, t he effect of
home audio copying t hat concer ned Congr ess
t he most was t hat it diminished mar ket incen-
t ives for pr oducing t he wor k of new a r t ist s,
t hen some home-copying r oya lt ies could be
t a r get ed t o pr ovide fina ncia l incent ives for
pr oduct ions or per for ma nces t ha t would not
ot h er wi s e be a t t empt ed.
78
Th e Mu s i c P er -
for mer s Tr ust Fund, for example, is a fund set
mFor ~xmp]e) t . pr ovide incent ives t o mist s t o cont inue t o develop new mat er iid, it might be desir able t o give a Por t ion of t he
r oyalt y dir ect ly t o t he per for ming ar t ist , r at her t han give a lar ger por t ion t o t he r ecor d company t o allocat e accor ding t o cont r act ual
pr ovisions. On t he ot her hand, givinga lar ger shar e t o t he r ecor d company might give it mor e incent ives t o r ecor d new act s and mat e-
r ial.
77& Ch. 5. In Fr ance, for examp]e, pr weeds fr om t he audiot ape t ax ar e divided unequally among aut hor s, Per for mer s and pr oduc-
er s. In Belgium, t he pr oceeds fr om a pr oposed levy on blank t ape would be split , wit h half going t o ar t ist s, aut hor s and r ecor ding
companies, and t he ot her going t o suppor t ar t ist s and cu It ur al inst it ut ions in Belgium t hr ee language communit ies. In Iceland, pr o-
ceeds fr om t he levy on blank audiot apes ar e allocat ed t o per for ming ar t ist s and pr oducer s, composer s and wr it er s, t he per for mer s
shar e is deposit ed int o a fund t o be used for t he pr omot ion of t he pr ofession, par t icular ly for music schools. In Sweden, t ape t ax r eve-
nues ar e t ur ned over t o t he gover nment , which uses t wo-t hir ds for unspecified pur poses; of t he r emainder , most is put int o a cult ur al
fund, wit h a small por t ion divided among t he aut hor , per for mer , and pr oducer . In West Ger many, r oyalt ies ar e collect ed on blank t ape
and on r ecor der s. Revenues ar e dist r ibut ed among t he var ious collect ion societ ies for music aut hor s, per for mer s, and pr oducer s, and
lyr ic aut hor s, which t hen dist r ibut e r oyalt ies t o t heir member s,
78~t hough t op r ~or ding mist s, Cor n ~ser s, and songwr it er s might object t hat t his would depr ive t hem of t heir due, t her e would
seem t o be at least some just ificat ion for such an act ion. The r ecor ding indust r y alr eady r elies on t he lar ge pr ofit s fr om t heir most
successful r eleases t o subsidize new r eleases, since t he t ar get ed monies would be used t o finance new r eleases, at least some would
flow back t o t he r ecor ding companies anyway,
34 q Copyright and Home Copy ing: Technology Challenges the Law
up t o fost er and encour age t he use of live mu- lic concer t s, or any ot her t ype of public per -
sic. For ever y r ecor ding sold, t he r ecor ding for mance wher e no admission fee is char ged.
company cont r ibut es t o a fund t o be used for The funds a r e a lloca t ed a mong individua ls
t he cont inuat ion of live public per for mances, who par t icipat e in t he per for mances.
such as per for mances in nur sing homes, pub-
Ch a p t er 2
Tech n ologi ca l Ch a n ge
a n d Home Cop yi n g
CONTENTS
Page
INTRODUCTION q . . * . . . . . . * * * * . . . . . . . . . . . . * * . * . . m . . . . . . . . . . . m * . * 37
DIGITAL REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
EROSION OF NICHE BOUNDARIES .*9* **** ..** *e. *.. * * o * *****...* 47
DIRECT ELECTRONIC DELIVERY . . . . . . . . . . . . . . 9 . . . . . . . . . . . . . . . . . . 50
TECHNOLOGICAL COPY PROTECTION . . . . . 0 . . 0 . . . . . . . . . . . . . . . . . . . 52
Audio Recor dings . . . *. ****9 9 *. . **. **. ****. . . *. . ***. **. . **. . ****
56
Ser ial Copy Management Syst em . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
CBS Copycode Syst em . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Video Recor dings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Summar y .**. **** ..*. ..m*. **. *.*. ... **** *9e*. ***. .*. ... .. **n. 61
Page
2-A DAT: How It Wor ks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2-B. Analog Casset t e: How It Wor ks.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2-C. Digit al Audio Tape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2-D. How Compact Discs Wor k . . * . . * * * * * * * * * * * . . * * . * * . * * . * ******..* 45
2-E. How Compact Discs Ar e Made . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2-F. Ot her Digit al For mat s Using CD Technology . . . . . . . . . . . . . . . . . . . . . 48
2-G. New Infr ast r uct ur es and Ser vices .. a . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
2-H. Tr ansact ion-Based Dist r ibut ion Syst ems . . . . . . . . . . . . . . . . . . . . . . . . . 54
2-I. Syst ems t o Copy Pr ot ect Sound Recor dings . . . . . . . . . . . . . . . . . . . . . . 59
Ch a p t er 2
Tech n ologi ca l Ch a n ge a n d Home Cop yi n g
INTRODUCTION
Copyr ight law defines t he boundar ies be-
tween permissible and prohibited uses of copy-
r ight ed wor ks. These boundar ies ar e based on
copyr ight s int ellect ua l pr oper t y ba r ga i n ,
1
t emper ed by t he feasibilit y and efficiency of
enfor cement . Technology, dr iven by t he social
and economic object ives of it s user s, defines
t he fr ont ier s of possible uses and feasible en-
for cement . Technological changes t hat sub-
st ant ially alt er t he nat ur e and ext ent of possi-
ble uses, or t he fea sibilit y of enfor cing
pr ohibit ions against cer t ain uses, give r ise t o
t ensions bet ween user s and copyr ight pr opr ie-
t or s.
Technological change as it r elat es t o copy-
r ight pr esent s a major challenge t o gover n-
ment policymaker s, who must cont inually
seek t o define and maint ain t he appr opr iat e
r elat ionship among policy, t he laws imple-
ment ing it , and t he consequences of t echno-
logical change. While t echnology and t he law
ar e fundament ally int er r elat ed, new uses of
t echnology should not , in t hemselves, have
t he for ce of law.
New uses of technology can, however, exploit
persistent ambiguities in existing laws, and by
making possible or prohibiting selected ac-
tions, they can have the effect of lawmaking.
This may be happening for copyr ight . Ther e-
cor ding indust r y consider s t hat t he gr owt h in
and cur r ent pr evalence of home audiot aping
have cr eat ed a sit uat ion in which per sist ent
ambiguit ies in t he law have been exploit ed t o
t he point t hat consumer s believe t hat t hey
have a r ight t o t ape.
2
On t he ot her hand, any
indust r y agr eement s r esult ing in t echnologi-
cal copy pr ot ect ions implement ed in t he
wor ks t hemselves and/or in r ecor ding devices
would r edefine possible uses and would ef-
fect ively shift t he boundar y t owar d t he pr o-
hibit ed. Fr om t he publics viewpoint , t he r e-
sult would be equivalent t o a change in t he
copy-r ight law. Mor eover , alt hough home
copying would be t he int ended t ar get for t hese
copy pr ot ect ions, t hey could pot ent ially limit
t he doct r ine of fair uses
The debat e over home audiot aping, which
pr ompt ed Congr ess t o r equest t his st udy, is a
sit uat ion in which t echnological change has
st r ained ambiguit ies in t he cur r ent law t o t he
point wher e copyr ight pr opr iet or s have pet i-
t ioned for legislat ive r elief fr om t he pr oject ed
consequences of new copying t echnologies. In
t his inst ance, new consumer pr oduct s would
enable user s t o make digit al copies of copy-
r ight ed r ecor dings in t heir homes, at a t ime
when digit a l r ecor dings (i.e., compa ct discs)
wer e becoming incr ea singly impor t a nt t o r e-
cor d compa n i es pr ofi t s . Mu l t i gen er a t i on a l
digit a l copies (i.e., cl on es ) cou l d be pr o-
duced wit h no loss of qualit y. In suppor t of
The bar gain is a balancing of social object ives: encour aging t he pr oduct ion and disseminat ion of diver se new wor ks (by pr oviding
economic incent ives for cr eat or s via a limit ed monopoly) and encour aging widespr ead access t o and ut ilizat ion of wor ks. See Zn t el i ec-
t u a l Pr oper t y Ri gh t s i n a n Age of El ect r on i cs a n d I n f or m a t i on , OT A-CI T -302 (Melbour ne, FL: Kr eiger Publishing Co., Apr il 1986),
especially ch. 2 and ch. 7, for mor e on t he int elkt ual pr oper t y bar gain bet ween cr eat or s and t he public, and how it is changing in an er a
of elect r onic infor mat ion.
~his point was r aised in RIAA comment son a dr aft of t his r epor t . (H. Rosen, U, let t er t oJ . Winst on, OIA, May 2, 1989. Encb-
sur e wit h comment s on cir afl ch. 9, p. 1.)
s~t hollgh Copypr ot =t ion t echnologies would not necessar ily pr event all copying under t he dt ir ine of f~r u% speci~ Pr ovisions
and except ions would have t o be wor ked out t o allow fair -use copying. Even so, t r ansact ional or hassle cost s for individuals wou l d be
higher , per haps discour aging some fair use.
4Anot her example is t he debat e over videocasset t e r ecor der s and home videot aping, which is being r eopened by t he Mot ion Pict ur e
Associat ion of Amer ica (MPAA). The MP&l is calling for t echnological means t o pr event home r ecor ding of movies shown on pay
cable, or deliver ed by pr emium sat ellit e or pay-per -view ser vices. (J ack Valent i (Pr esident /MPAA), Viewpoint s, Tel evi si on /Ra d i o
Age, Feb. 6, 1989, p. 91.)
37
pr oposed legislat ion t o int r oduce home-t ap-
ing r oyalt ies or r est r ict home copying,
5
t he Re-
cor ding Indust r y Associat ion of Amer ica, Inc.
(RIAA) has ar gued t hat t he t echnological
change fr om analog t o digit al r ecor ding will
gr eat ly incr ease home copying, so as t o ser i-
ously t hr eat en t he indust r ys economic viabil-
it y. Consider ing t hat sound r ecor dings have
hist or ically had inadequat e copyr ight pr ot ec-
t ion, compar ed wit h ot her t ypes of wor ks,
6
copyr ight pr opr iet or s (for bot h t he music and
t he sound r ecor dings) have called for Con-
gr ess t o enfor ce what t hey consider t o be t he
exist ing boundar ies of copyr ight .
7
The legal st at us of home audiot aping and
ot her t ypes of pr ivat e use is ambiguous, how-
ever (see ch. 3). Alt hough t he st at us of some
specific pr ivat e uses has been det er mined
judicially, cur r ent legislat ion does not pr ovide
explicit guidance as t o whet her copyr ight pr o-
pr iet or s r ight s ext end t o noncommer cial pr i-
vat e uses. Many believe t hat t hey do not . Ot h-
er s consider t hat home audiot aping, at least ,
is noninfr inging under t he doct r ine of fair use.
Fr om eit her of t hese per spect ives, pr oposals
t o ext end pr opr iet or s r ight s can be r egar ded
as a call for Congr ess t o st r ike a new int ellec-
t ual pr oper t y bar gain, in which unr est r ict ed
and/or uncompensat ed home copying of audio
mat er ials is deemed not (or no longer ) t o be in
t he public int er est .
At t he same t ime, some copyr ight pr opr ie-
t or s ar e pur suing unilat er al and/or cooper a-
t ive indust r y measur es t o implement t echno-
logica l mea ns for copy pr ot ect ion. Such
pr ot ect ive measur es would shr ink t he fr ont ier
of possible uses of wor ks, which would in ef-
fect shift t he boundar y of per missible uses
including some fair uses as defined in t he 1976
Copyr ight Law.
8
The 1986 OTA r epor t , Intellectual Property
Rights in an Age of Electronics and Informa-
t ion,
9
br oadly examined t he impact s of new
t echnologies on t he enfor cement of int ellec-
t ual pr oper t y r ight s, including t he r ight t o
cont r ol r epr oduct ion of copyr ight ed wor ks,
t he r ight t o cont r ol publicat ion and per for m-
ance of wor ks, and t he r ight t o cont r ol t he
making of der ivat ive wor ks. That r epor t
found t hat t echnological changes offer oppor -
t unit ies for social and pr ivat e gain at t he same
t ime t hat t hey challenge t he cur r ent business
and legal envir onment s.
10
For example, t ech-
nologies t hat lower t he cost and t ime r equir ed
t o copy, t r ansfer , or manipulat e infor mat ion
and int ellect ual pr oper t y can make wor ks
mor e accessible, make t hem mor e valuable t o
s*, for exmp]e, t he Home Audio Recor ding Act , S. 1739, 99t h Cong.; or H.R. 1384 ~d S.508 in t he loot h Cong.
eThis ~evint was pr esent ~ by C. Sher man (Ar nold and Por t er , r epr esent ing t he RML4) at t he st udys final advisor y we] meet -
ing on Apr . 24, 1989. Sher man also consider ed t he dist inct ions in OTAS analysis of elect r onic-deliver y -ver sus-per for mance (see
below) t o be per ilous ones t hat pr opr iet or s of ot her t ypes of wor ks did not have t o deal wit h.
7&cor dingt o t he RJ AA, ... t he music indust r y has consist ent ly maint ained t hat home copying is i]]egal under cur r ent copyr ight law
and has simply sought legislat ion t o make copyr ight pr ot ect ion mor e t han an empt y r ight . (H. Rosen, RLAA, let t er t o J . Winst on,
OTA, May 2, 1989. Enclosur e wit h comment s on dr aft ch. 9, p. 1.)
6For emp]e, ~pfingbr ief excer pt s fr om one or mor e t echnologically copy-pr ot ect ed r =or dings, for t he Pur poses of t eaching or
cr it icism, would be pr oblemat ic.
The r ecor ding indust r y does not consider t hat t echnological copy pr ot ect ion would eliminat e copying per mit t ed under t he doct r ine
of fair use and t akes t he posit ion t hat legit imat e fair uses should be pr eser ved and t hat exempt ions should and could be wor ked out .
(H. Rosen, R.VW, let t er t o J . Winst on, OTA, May 2, 1989. Enclosur e wit h comment s on dr aft ch. 9, p. 12. )
gOTA_CIT-302, op. cit ., foot not e 1.
I OAt t his st udys find advisow pane] meet ing on Apr . 24, 1989, some panel member s r eemphasized t he challenges t hat new t ech-
nologies pr esent for t he cur r ent copyr ight syst em, which t hey consider ed t o be near ing obsolescence, but daunt ingly complex t o over -
haul.
For a mor e complet e discussion of t echnological changes and t he enfor cement of int ellect ual pr oper t y r ight s, including impact s on
pr int , music, video, and ot her media, see OTA-CIT-302, op. cit ., foot not e 1, pp. 97-123.
Chapter 2Technological Change and Hom e Copy ing q 3 9
consumer s, and make using t hem mor e con-
venient . These t echnologies can also make en-
for cing int ellect ual pr oper t y r ight s mor e diff-
cult , and ma y l ower r i gh t s h ol der s
expect at ions of economic r et ur ns. If so, t his
might r educe cr eat or s financial incent ives t o
pr oduce new wor ks. Fur t her mor e, t he 1986
r epor t not ed t hat enfor cement of int ellect ual
pr oper t y r ight s will pot ent ially be mor e int r u-
sive, as copying, t r ansfer r ing, and manipulat -
ing wor ks become pr ivat e act ivit ies in t he
home.
The Copyright and Home Copying st udy
focuses on one t ype of int ellect ual pr oper t y
pr ot ect ion copyr ight and one venue t he
home. The st udys empir ical wor k examines
t he home use and/or t aping of copyr ight ed
audio mat er ials and, t o a lesser ext ent , video
mat er ials. The copyr ight issues r aised by
home audio- or videot aping ar e enmeshed
wit h br oader quest ions about t he gener al
st at us of pr ivat e use, including home copy-
ing. Because t he cur r ent copyr ight law gives
lit t le guidance on pr ivat e use, especially
whet her pr ivat e use is an infr ingement of
copyr ight , t he quest ion r emains whet her t he
over all object ives of copyr ight ar e best ser ved
by gr ant ing copyr ight pr opr iet or s exclusive
r ight s over home copying, including t he
r ight s t o be compensat ed for and/or t o pr e-
vent it .
Up t o now, t he cour t s have applied t he doc-
t r ine of fair use, absent ot her st at ut or y guid-
ance, t o make explicit but limit ed and niche-
or ient ed det er minat ions about home copying
and ot her pr ivat e uses of specific cat egor ies of
copy-r ight ed wor ks. Leaving t hese det er mina-
t ions t o t he cour t s, as specific cases ar ise, has
a llowed Congr ess t o a void pr ema t ur e or
shor t -lived copyr ight legislat ion, and has
helped maint ain flexibilit y in t he face of
changing t echnologies.
Th e con flu en ce of cu r r en t t ech n ologi ca l
a n d bu si n ess t r en d s, however , may make an
explicit congr essional definit ion of t he legal
st at us of home copying mor e desir able t o r e-
duce legal and mar ket uncer t aint ies and t o
pr event de fact o changes t o t he copyr ight law.
These t r ends ar e:
The movement t o digital representations
of music, video, and ot her t ypes of ent er -
t ainment and infor mat ion available t o
consumer s. Wit h t hese come new digit al
r ecor ding t echnologies for home use, and
mor e power ful means for home user s t o
int er act wit h and manipulat e digit al
wor ks, as well as t o make der ivat ive
wor ks.
The erosion of niche boundaries used t o
cat egor ize copyr ight able wor ks accor d-
ing t o t heir cont ent (e.g., audio, video,
comput er soft war e) or physical for mat
(e.g., audiot ape, videot ape, comput er
disc).
The emer gence of new delivery infra-
structures t o br ing music, video, and
ot her for ms of infor mat ion and ent er -
t ainment int o t he home (e.g., fiber opt ic
cable, pay-per -view, and int er act ive ca-
ble ser vices).
The effor t s of some copyr ight pr opr ie-
t or s (e.g., in sound r ecor dings and mo-
t ion pict ur es) t o develop and implement
technical means for copy protection.
Some indust r y st akeholder s do not con-
sider t hat t he ambiguous legal st at us of home
copying r epr esent s a pr oblem r equir ing any
a ddit iona l legisla t ion t o dea l wit h home
audiot aping. In par t , t his posit ion r eflect s t he
view t hat t he doct r ine of fair use is sufficient ly
adapt able t o addr ess home audiot aping, at
least , and t hat Congr ess int ended for t he
cour t s t o use t his safet y valve in dealing
wit h home copying.
11
1 IGW J . Shapjr o, E]~r onic Indust r ies Asmiat ion, Apr . 28, 1989, let t er t o OTA wit h comment s on dr ~ ch. 5, PP. 1>5.
.
40 . Copy right and Home Copy ing: Technology Challenges the L a w
Box 2-ADAT: How I t Wor k s
Digit al audiot apes t r anspor t syst em (left ) wor ks just like t hat of a videocasset t e r ecor der . Once inser t ed in
t he deck, t he casset t es pr ot ect ive lid opens and t he t ape is ext r act ed and wr apped 90 degr ees ar ound t he head-
bear ing dr um. As t he t ape moves past t he dr um fr om left t o r ight at 1/3 inch per second, t he dr um moves count er -
clockwise at 2,000 r pm (middle). This combinat ion yields a r ecor ding speed of 123 inches per second 65 t imes
fast er t han t odays analog casset t e decks. Because t he t ape is held at an angle t o t he dr um in a helical pat t er n, t he
dr ums t wo magnet ic heads wr it e and r ead infor mat ion in diagonal t r acks acr oss t he widt h of t he t ape inst ead of
longit udinally along it s lengt h, as in analog r ecor ding (r ight ). This space-saving ar r angement pr ovides 2 hour s of
infor mat ion on a mat chbox-size casset t e. Because each of t he t wo heads is mount ed at a differ ent azimut h, t he
infor mat ion-bear ing t r acks ar e laid down in an alt er nat ing pat t er n.
Transport System Rotating Head Track Scheme
Repr int ed fr om Popular Mechanics, J uly 1987.
Copyr ight The Hear st Cor por at ion. All r ight s r eser ved.
Con t i n u ed a mbi gu i t y a bou t con gr essi on a l t he ma r ket uncer t a int y will impinge on
i n t en t a n d t h e lega l st a t u s of h ome cop yi n g
ma y, h owever , become u n d esi r a ble, for t wo
ma i n r ea son s. F i r st , t he legal ambiguit y gives
r ise t o mar ket uncer t aint y. As new digit al for -
mat s and r ecor ding t echnologies develop,
har dwar e and soft war e pr oducer s will become
even mor e int er dependent : just as for com-
put er s a nd comput er soft wa r e, decisions
about t echnical st andar ds and for mat s made
by one indust r y will cr it ically affect t he
ot her .
12
Because of t his mut ual dependency,
br oader gr oups of st akeholder s, including t he
public.
Cont inued uncer t aint y blur s mar ket sig-
nals and r aises business r isks for har dwar e
and soft war e pr oducer s alike; pr icing and out -
put decisions ar e mor e difficult . Pot ent ial of-
fer ings of new pr oduct s and ser vices may be
delayed or wit hheld; delays and/or limit ed
mar ket s have r eal cost s for consumer s and
pr oducer s:
lzIndust V sfidmds det er mine t he ~m~t ibi]it y and feat ur es of differ ent har dwar e and/or sollwar e pr oduct s. For mor e m indUS-
t r y st andar ds and t heir r ole in det er mining mar ket s, see U.S. Congr ess, Office of Technology Assessment , Cr it ical Connect ions: Com -
mu n i cxd i on s f or t h e Fu t u r e, OT A-CI T -407 (Washingt on, DC: U.S. Gover nment Pr int ing O~ce, for t hcoming).
Chapter 2Technological Change and Home Copy ing q 4 1

Box 2-BAn a l og Ca sset t e: How I t Wor k s
In analog casset t e r ecor ding, a nonr ot at ing
fr eed head ent er s t he housing t o pr ess against t he
t ape. The t ape passes by t he head at 17/8 inches
per second, and separ at e t r acks for t he left and
r ight st er eo channels ar e r ecor ded simult ane-
ously along t he lengt h of t he t ape. When t he fir st
side is r ecor ded, t he casset t e is flipped t o r ecor d a
second set of st er eo t r acks on t he r emaining
widt h of t he t ape. In DAT r ecor ding, just like
videot ape, t her es no need t o flip t he casset t e.
Repr int ed fr om Popular Mechanics, J uly 1987.
Copyr ight The Hear st Cor por at ion. All r ight s r e-
ser ved.
. In 1987, t he RIAA t hr eat ened t o sue t he
fir st manufact ur er selling consumer -
model digit al audiot ape (DAT) r ecor der s
in t he Unit ed St at es. (See box 2-C.) Many
consider t hat t his t hr eat is lar gely r e-
sponsible for consumer -model DAT r e-
cor der s being wit hheld fr om t he U.S.
mass mar ket for t he past 2 year s. In lat e
Apr il 1989, one manufact ur er began im-
por t ing and selling modest quant it ies of
DAT r ecor der s (wit h pr ofessional fea-
t ur es) in t he consumer mar ket . The fir m
r epor t edly expect s t o sell about 500 of
t he ($10,000) machines in t he fir st year ,
while consumer models wit h mor e lim-
it ed feat ur es t ypically sell for about
$1,500 in J apan and Eur ope.
13
The J uly 1989 Memo of Under st and-
ing (MOU) bet ween t he int er nat ional r e-
cor ding indust r y and sever al consumer -
elect r onics manufact ur er s (see box l-E)
may event ually lead t o mass int r oduc-
t ion of DATs wit h copy-limit ing feat ur es.
However , ear ly pr ess account s of r eac-
t ions t o t he agr eement indicat ed t hat
har dwar e indust r y execut ives consider ed
it unlikely t hat DAT r ecor der s manufac-
t ur ed wit h t he special feat ur es could ap-
pear on t he mar ket befor e spr ing 1990.14
Some copy-r ight holder s and music pub-
lisher s also expr essed concer ns t hat t he
legislat ive object ives did not include r oy-
alt ies.
15
Anot her emer ging digit a l t echnology
(r ecor dable/er asable compact disc) faces
similar uncer t aint ies some copyr ight
pr opr iet or s have alr eady br anded it as a
wor se pr oblem t han DAT.
16
A J apanese
fir m announced sample-size shipment s
of wr it e-once, r ecor dable compact disc
(CD-R) r ecor der s in lat e 1988, wit h t he
init ial mar ket int ended t o be limit ed t o
pr ofessional applicat ions as an edit ing
t ool for CD-ROMs or for small-lot pr o-
duct ion of CDs or CD-ROMs. To mini-
mize copy-r ight -r elat ed cont r over sies,
anot her fir m selling blank discs an-
nounced t hat it did not plan t o supply
I sJ e~ ~=nb]ut h, ~fying R&4 Thr eat s of Lawsuit s, Nakamichi Impor t ing DAT player s,
Va r i et y, Apr . 26- May 2,1989, p. 208.
IA~ Di~St , VOI. 29, No. 31, J uly 31, 1989.
l~~Diges~, vol. 29, No. 32, Aug. 7, 1989.
s
Recor ding CD Wor se t han DAT--IFPI/R.IA& TVDi gest , vol . 28, No. 45, Nov. 7, 1988; Blank and Er asable CDs Pr ompt Fear s of
Pir acy in Tr ade Gr oup, Va r i et y, Nov. 23, 1988, p. 96.
Box 2-CDi gi t a l Au d i o Ta pe
Rot ar y-head digit al audio t ape (R-DAT, usually r efer r ed t o as DAT in t his r epor t ) is a for mat wit h consumer -
ent e r t ainment and comput er dat a-st or age applicat ions. For consumer ent er t ainment , t he DAT for mat per mit s
high-qualit y digit al r ecor ding/playback of CD-qualit y music. The cur r ent DAT st andar d specifies t wo basic oper -
at ing modes: a 44.1 kHz sampling r at e (t he same as for audio CD) for playback only, and a 48 kHz sampling r at e
for r ecor ding and playback. The 44.1 kHz mode can playback eit her pr er ecor ded t apes made (in r eal t ime) fr om
CD mast er t apes or pr er ecor ded t apes made using high-speed cont act pr int ing. As of mid-1989, most consumer
models oper at ed at t he 48 kHz r at e, wit h 16-bit r esolut ion; t he 48 kHz r at e was int ended t o pr event dir ect digit al-
t o-digit al r ecor ding fr om CDs. However , t hese t apes can t hemselves r eduplicat ed dir ect ly, or cloned, wit hout
fur t her degr adat ion or noise.
1
Pr er ecor ded DAT t apes and CDs usually have digit al copy-pr ot ect flags not par t of t he music it self de-
signed t o be r ead by consumer -model digit al r ecor der s. These flags ar e int ended t o inhibit digit al-t o-digit al copy-
ing, but t o do so t he har dwar e must be capable of r eading and using t he flags. Cur r ent DAT har dwar e is not ,
accor ding t o t he RIAA.
2
For comput er dat a st or age, DAT pr ovides a high-capacit y alt er nat ive t o CD-ROM. A st andar d R-DAT cas-
set t e can st or e t wo encyclopedias wor t h of dat a, t he equivalent of 65 12-inch t ape r eels or 8 of t he convent ional
st r eaming t ape dr ive car t r idges used for backup st or age. One mar ket niche for DAT st or age is t hought t o be as
backup for high-capacit y, har d-disk per sonal comput er s and wor k st at ions, wher e floppy disket t es ar e impr act i-
cal.
DAT t apes ar e about half t he size of a convent ional analog audio casset t e and come in a sealed box similar
t o a videot ape. The DAT r ecor der differ s fr om an analog r ecor der in t hat (like t he VCR) t he r ecor d/play head
r ot at es. Digit al r ecor ding gives a high dynamic r ange (96 db) and audio fr equency r esponse similar t o a CD (2-22
kHz).
Unlike t he CD, DAT is a cont act medium in which t he t ape must be wound and r ewound r epeat edly. Event u-
ally, DAT t apes will degr ade, and t he use of DAT as an ar chival medium is in quest ion by some, including t he
Nat ional Academy of Recor ding Ar t s and Sciences (NARAS). One of t he mar ket quest ions for DAT is whet her
consumer s would accept a r elat ively expensive cont act -playback medium, if t hey had no way t o make backup
copies of t he t apes, when less-expensive CD player s ar e alr eady available for less t han $200.
Many consider t he RIAAs t hr eat t o sue t he fir st manufact ur er t o sell consumer -model DATs in t he Unit ed
St at es lar gely r esponsible for delaying widespr ead int r oduct ion of DAT her e. For example, t he fir st consumer
DAT r ecor der s models had been expect ed in t he Unit ed St at es in 1987. Car DAT player s wit hout r ecor ding capa-
bilit y have been available for $1,500 and up since mid-1988; pr er ecor ded soft war e, mainly classical and jazz, sells
for $25 and up. Wit h no end t o t he RIAA disput e in sight , alt er nat ive channels of dist r ibut ion for DAT r ecor der s
opened up:
q The gr ay mar ket for unofficial impor t s, selling for $1,600-$3)000. By ear ly 1989, impor t er s began planning
for lar ge impor t s of gr ay-mar ket DAT r ecor der s, despit e t he RIAAs t hr eat s t o sue anyone impor t ing t he
machines. One New J er sey impor t er expect ed t o impor t 5,00010,000 DAT r ecor der s by mid-1989 and sell
t hem t hr ough audio st or es; an affiliat e sold about 600 DAT machines in 1988, pr imar ily t o r ecor ding st udios
and Gover nment agencies, including t he Depar t ment of Defense.
. Pr ofessional models selling for $2,500-$7,000, which have been legally impor t ed and sold since 1987. The
RIAA has not opposed DAT as a pr ofessional medium, despit e t he fact t hat , unlike consumer models, t he pr o
unit s can r ecor d at 44.1 kHz (t he CD r at e).
By cont r ast , mid-1987 for ecast s for DAT expect ed t hat t he r ecor der s would init ially sell for about $1,500, but
t hat t he pr ice would dr op t o ar ound $250 in a few year s as sales volume incr eased (ear lier pr oject ions had ex-
pect ed consumer models t o sell for $950-$1,250 in 1987). Conser vat ive est imat es of 1987 sales wer e in t he
20,000-50,000 r ange, wit h r epor t ed for ecast s of 220)000 DAT sales in t he U.S. for 1988 and a cumulat ive t ot al of
1.1 million unit s by 1990. Casset t e pr ices wer e expect ed t o be $9 for 60 minut es and $12 for 120 minut es.
Under t he pr oposed ser ial copy management syst em (SCMS) st andar d, new consumer -model DAT r ecor der s would oper -
at e wit h a 44.1 kHz sampling r at e, t he same as t he CD st andar d. However , copies of copies could not be cloned.
Zunder t he SCMS st andar d, DAT r ecor der s would r ecognize t he flags.
Con t i n u ed on n ext p a ge
20-900 - 89 - 2

Dur ing t he delay, some cont r over sies have emer ged concer ning DAT as a pr ofessional t ool. Test s conduct ed
in 1988 by t he Radio Technical Inst it ut e in Munich found t hat some DAT t apes made on pr ofessional and con-
sumer -model machines wer e unsat isfact or y in t er ms of machine-t o-machine playback compat ibilit y, r ecor ding
qualit y, and sound st or age. The Inst it ut e concluded t hat significant changes in t he DAT for mat , such as incr eas-
ing t ape widt h and t he size of t he r ecor ding t r acks, would be necessar y t o make DAT sat isfact or y for pr ofessional
use.
In t he meanwhile, a West Ger man fir m int r oduced t he fir st DAT comput er dr ive in Mar ch 1988; by t he end
of 1989 per haps a dozen U.S. and for eign fir ms ar e expect ed t o int r oduce DAT comput er pr oduct s. The DAT
st or age dr ives can hold about 1.2 billion char act er s of infor mat ion, and sear ch t he dat a much fast er t han conven-
t ional t ape-car t r idge dr ives.
SOURCES: St eve Bir chall, Digit al Audio Tape Issues and Answer s, St er eo ReviewMagazine, Mar ch 1987, pp. 56-59. Mar k
Br ownst ein, Gigat r end Dat a DAT Dr ive Feat ur es QIC Int er face, I n f owor l d , Aug. 14, 1989, p. 25. Pat r ick Cole,
The Dash for DAT Dominance, Business Week , May 15, 1989, pp. 138H-138J . Michael Gr eene, Per manence of
New Disk For mat s Should Cue For mat ion of a Nat ional Music Ar chive) Va r i et y Da i l y, Oct . 25, 1988. Wayne
Gr eene, The THOR Thpot , CD Revi ew, Febr uar y 1989, pp. 88-86. J ohn W. Mer line, What s All This about
DAT? Con su m er s R esea r ch , J une 1987, pp. 35-37. Edwar d Mur r ay, DATs a Snap, Digit al Au d i o, December
1988, p. 118. Mar y Ann OConnor , DAT: The Cont r over sy Cont inues, Opt i ca l I n f or m a t i on S yst em s Upd a t e,
Aug. 1
}
1987, pp. 4-6. Andr ew Pollack, New St or age Funct ion for Digit al Audio Tape, Th e New Yor k Ti m es, May
25, 1988, p. D6. Mar t in Por t er , DATs NOT Ail, Folks!, GQ, Sept ember 1988, pp. 317-326. Boar d Tur ns Digi-
t al Audio Tape int o Backup St or age, El ect r on i cs, Febr uar y 1988, p. 26. The Gr ay Mar ket Is Open for Digit al
Audio Tape, Elect r onics, Febr uar y 1989, p. 60. TV Di gest , vol . 29, No. 16, Apr . 17, 1989, p. 14.
t hem t o t he consumer mar ket .
17
Never -
t heless, t he Int er nat ional Feder at ion of
t he Phonogr aphic Indust r y (IFPI) has-
r epor t edly br anded t he planned launch
as deplor able, and st at ed t hat , int r o-
ducing t he CD-R wit hout put t ing copy-
r ight safeguar ds int o place will undo any
pr ogr ess made on t he ant i-pir acy and
home-t aping fr ont dur ing t he last 3
year s.
18
[The signat or ies t o t he MOU have agr eed
t o meet t o discuss copyr ight issues r e-
lat ed t o r ecor dable/er asable CDs.]
Mor eover , as niche boundar ies er ode, t hese
effect s can spill over fr om one indust r y t o an-
ot her :
. DAT ca s s et t es ca n s t or e mu ch mor e
comput er dat a t han r egular comput er -
t ape car t r idges. (See box 2-C.) Some in-
dust r y analyst s expect DAT st or age de-
vices t o account for about one-sevent h of
t he comput er t ape-dr ive indust r y by
1993. Unit manufact ur ing cost s for t he
DAT casset t es depend on t he volume be-
ing pr oduced, but because DAT is not yet
a mass consumer -audio pr oduct , lar ge
scale economies ar e not yet being en-
joyed. Because of t he delays in int r oduc-
ing DAT as a consumer -audio for mat ,
some DAT t ape-dr ive manufact ur er s ar e
adopt ing a differ ent DAT for mat in-
t ended pr imar ily for comput er dat a st or -
age, and pr ices for dat a-st or age DATs
may be higher t han if t her e wer e a com-
mon for mat .
19
Manufact ur er s have be-
7CD Recor der Shipment s Scheduled Next Mont h, TV Di gest , vol. 28, No. 46, Nov. 14, 1988, p. 10; CD-R Coming t o U.S.? TV
Di gest , vol . 28, No. 50, Dec. 12, 1988, p. 17. The blank discs would cost about $8.50 each.
aPippa Collins, IFPI Decr ies Launch of J apanese Recor dable CD, Bi l l boa r d , vol . 101, No. 1, J an. 7, 1989.
Igpat r ick C{)]e, The Dash for DAT Dominance, Bu si n ess Week, May Is, 1989, pp. 138H- 183J .
gun t o int r oduce t he dat a-st or age DAT
dr ives, which use 4-millimet er t ape,
compar ed t o t he 8-millimet er DAT cas-
set t es for audio r ecor der s.
20
Cont inued uncer t aint y might even hinder t he
abilit y of copyr ight indust r ies t o adapt t o new
t echnical and mar ket envir onment s, if pr o-
pr iet or s cont inue t o seek and/or do obt ain
r emedies based on t heir cur r ent ways of doing
business. If lega l uncer t a int ies wer e r e-
duced by sanct ioning, licensing, or pr ohibit -
ing home copying t hen businesses and con-
sumer s might bet t er a djust t o t he new
t echnical and legal envir onment s.
Second, if t echnological means for r est r ict -
ing pr ivat e copying of copyr ight ed wor ks ar e
implement ed by t he soft war e and/or har dw-
ar e pr oducer s, one r esult could be t he vir -
t ual eliminat ion of home copying, as well as
some ot her t ypes of copying now specifically
per mit t ed under t he doct r ine of fair use.
21
If
t his wer e t o occur , it would be a de fact o r evi-
sion of t he 1976 copyr ight law, but by indust r y
and not Congr ess.
22
Technological uses would
est ablish law, r at her t han follow it .
23
For some
t ypes of t echnological copy pr ot ect ion, imple-
ment ed t hr ough volunt ar y int r a- and int er -in-
dust r y agr eement s, gover nment appr oval or
consent might be sought , t o avoid ant it r ust
pr oblems. Ant it r ust r eviews might not , how-
ever , be t he best vehicles for set t ing copyr ight
policy.
DIGITAL REPRESENTATIONS
Alt hough audio compact discs, t he fir st
digit al for mat for home-ent er t ainment pr od-
uct s, wer e int r oduced only a few year s ago,
digit al r epr esent at ions of music, images, and
ot her infor mat ion have become cent r al t o t he
fut ur e of home ent er t ainment /infor mat ion
pr oduct s and ser vices (see boxes 2-D and 2-E
for mor e infor mat ion about compact discs).
New t echnologies cont inue t o facilit at e copy-
ing, manipulat ing, and t r ansmit t ing digit al
infor mat ion at declining cost s. As t he cost s of
t hese new t echnologies decr ease, t hey ar e be-
coming available for home use, and t hus may
incr ease t he scope, quant it y, and qualit y of
home copying.
24
Some impor t ant differ ences bet ween digit al
for mat s and analog for mat s for infor mat ion
st or age, r ecor ding, playback, and t r ansmis-
sion
q
ar e:
The r esolut ion and signal-t o-noise r at io
ar e gr eat er for digit al t han for analog r e-
cor dings. For audio r ecor dings, t his gives
a la r ger dyna mic r a nge, a bsence of
backgr ound hiss, and mor e br illiant
sound qualit y. Digit al filt er ing and er r or -
cor r ect ion t echniques can be used dur ing
playback t o fill in missing bit s (some-
what equivalent t o eliminat ing t he ef-
fect s of scr at ches and dust when playing
mDa~d J . Buer Wr , Emer ~d DAT Mckup Device Can St or e 2.2 Gigabyt e, I n f owor l d , Aug. 21, 1989, P 13; md Mmk Br ownst eint
Gigat r end Dat a DAT Dr ive Feat ur es QIC Int er face, I n f owor l d , Aug. 14, 1989, p. 25.
zl~me t =hno]o@c~ mems might r eWir e t r mmct ion-hsed payment s for home copying, t his w~uld be t he t echnological eWiVa-
lent of a fee-based compulsor y license.
22
See foot not e 8.
Z30TA is ~at efu] t . Da~d Mou]t on for his comment s i
n
t his r ewd. (D. Mou]t on, Ber klee Co}]ege of Music, let t er t o OTA, Aug. 5,
1988. )
24This st r ~ns t h
e
t r adit ion~ Conmpt ofcopWight as a pr ivat e r ight , pr ivat e]y enfor ced, which was est .ab]ished when home copying
t echniques wer e r elat ively infer ior t o t hose used for commer cial publicat ion. Now, publishing can bea pr ivat e act . For an ext ensive
examinat ion of t he implicat ions of t echnological change for copyr ight enfor cement , see OTA-CIT-302, op. cit ., foot not e 1, especially
ch. 4.
Box 2-DHow Com pa ct Di scs Wor k
The audio compact disc (CD), int r oduced in J apan
in 1982 and in t he U.S. and Eur ope in 1983, offer s im-
pr ovement s over some of t he shor t comings of
longplay vinyl discs (LP r ecor ds). While LP r ecor ds
can pr oduce ver y high qualit y sound, t hey ar e subject
t o pr oblems such as disc wear and damage, back-
gr ound noise, and wow and flut t er . These pr ob-
lems ar ise lar gely because t he LP depends on a me-
chanical scanning syst em. The player s needle-st y-
lus must be in dir ect cont act wit h t he gr ooves in t he
LP, wher e t he analog sound is encoded. Dust , sur -
face damage, war ping, and var iat ions in r ot at ional
speed will affect t he qualit y of playback sound.
The CD t echnology uses a differ ent appr oach. The
digit al infor mat ion r ecor ded on t he sur face of a CD
r epr esent s sampling of an audio signal at t he r at e of
44.1 kHz. The CD player r eads t his digit al infor ma-
t ion wit h a laser -opt ical scanning syst em t hat r e-
quir es no physical cont act . Fur t her , t he player s digi-
t al signal pr ocessing syst em is independent of t he r o-
t at ional speed of t he disc. The r esult is ver y near ly
per fect r epr oduct ion of sound t hat will not degr ade
even aft er r epeat ed plays.
Infor mat ion is r ecor ded on a CD as a succession of
t iny pit s, each one 0.12 micr on deep and 0.6 micr on
wide. Lengt h of t he pit s var ies fr om 0.9 t o 3.3 micr on.
[Not e: one micr on = 0.000039 in.) A st andar d 5-inch
CD, on which 60 minut es of music is r ecor ded, would
have about 3 billion pit s. Each ser ies of pit s and
lands (spaces bet ween pit s), r epr esent s a ser ies of
digit al bit s. The encoded infor mat ion includes not
only t he channel bit s t hat r epr esent t he audio in-
for mat ion, but also t he subcodes t hat gover n t he
cont r ol and display funct ions of t he player and t he
t r acking signal t hat allows t he player t o follow and
r ead t he pit pat t er n.
The playback syst em for a CD is shown in t he illus-
t r at ion below. Light beams fr om t he semi-conduct or
laser (780 nanomet er wavelengt h in t he infr a-
r ed r ange), ar e made par allel by t he collimat or lens
and t hen focused by t he object ive lens int o a 1 mi-
cr on spot t hat scans t he disc. Light r eflect ed fr om
t he r eflect ive layer on t op of t he disc r et ur ns t hr ough
bot h lenses t o t he beam split t er pr ism, which diver t s
it ont o t he phot o det ect or . The phot o det ect or can
dist inguish bet ween light r eflect ed fr om a land and
light r eflect ed fr om a pit . Light fr om t he lat t er is
slight ly dimmer because t he pit is appr oximat ely 1/4
wavelengt h closer t o t he lens, and t hus it gener at es
dest r uct ive int er fer ence.
The signals der ived fr om t he phot o det ect or t hen
go int o a signal pr ocessing syst em t hat det ect s and
cor r ect s er r or s in t he bit st r eam.
The CD-System
Pr ot ect i ve coat i ng Refl ecti ve l ayer
SOURCES: N. van Slager en, Basics on Compact Disc: A Shor t Int r oduct ion, Neder lanse Philips Bedr ijeven B. V., Elect r o
Acoust ics Division, Opt ical Disc Mast er ing, Eindoven, The Net her lands, var ious pagings, n.d.
For a br ief hist or y of t he CD see Fr ed Gut er l, Compact Disc, in Technology 88, I EEE S pect r u m , J anuar y 1988,
pp. 102-108.
Box 2-EHow Com pa ct Di scs Ar e Ma d e
The pr oduct ion of compact discs (CDs) differ s in a number of r espect s fr om t he manufact ur e of long-play
vinyl discs (LP r ecor ds). Ther e ar e t wo sizes of audio CDs in cur r ent use: t he 5-inch CD, which can cont ain about
60 minut es of r ecor ded music, and t he 3-inch single, which holds 2 or 3 songs. The st eps for making t hem ar e
out lined in t he illust r at ion below.
Pr ogr am pr oduct ion r ecor ding, mixing and cr eat ing a mast er t ape of audio mat er ial is essent ially t he
same as for LP r ecor ds. The mast er t ape, cont aining t wo st er eo audio channels, maybe in eit her digit al or analog
for mat .
In t he t ape mast er ing pr ocess, t he mast er t ape is conver t ed fr om analog t o digit al or fr om digit al t o anot her
digit al for mat . Subcodes (indexes and ot her infor mat ion needed for cont r ol and display funct ions of t he CD
player ) ar e also added t o t he bit st r eam. The r esult , a digit al t ape mast er is used t o pr oduce t he disc mast er .
Many of t he following st eps must be per for med under clean-r oom condit ions, because of t he high level of
pr ecision r equir ed. In t he disc mast er ing pr ocess, t he infor mat ion fr om t he t ape mast er is r ecor ded opt ically (t hat
is, using a laser ) ont o t he sur face of a glass disc which has been coat ed wit h phot or esist . This sur face is t hen
developed, much as a phot ogr aph would be, pr oducing t he disc mast er . In mat r ixing, t he sur face of t he disc
mast er is t r ansfer r ed t o a nickel shell (fat her ). The fat her is a negat ive fr om which a number of posit ive mot h-
er s ar e made. Fr om t he mot her s, sons or st amper s ar e pr oduced. Aft er suit able pr ocessing, t hese st amper s
ar e used for r eplicat ion. The pat t er n on t he sur face of t he st amper is used t o make a pat t er n of pit s on t he sur face
of a t r anspar ent polycar bonat e plast ic disc. The plast ic disc is t hen spr ayed wit h a r eflect ive aluminum coat ing,
and a layer of pr ot ect ive lacquer . Finally, t he cent er hole is punched out and t he label is pr int ed ont o t he pr ot ec-
t ive layer .
SOURCES: Mat er ial in t his sect ion is based on infor mat ion fr om: N. van Slager en, Basics on Compact Disc: A Shor t Int r o-
duct ion, Neder lanse Philips Bedr ijeven B. V., Elect r o Acoust ics Division, Opt ical Disc Mast er ing, Eindoven,
The Net her lands, var ious pagings, n.d.
an LP r ecor d). Some playback met hods q Mult igener at ional digit al copies (of digi-
for digit al r ecor dings do not r equir e t al r ecor dings) can be made wit h no loss
physical cont act (e.g., r ecor d/st ylus or of qualit y or clar it y copies ar e clon-
t ape/head), so t hose r ecor dings will not
able. Wit h analog audiot aping, for ex-
suffer (nor mal wear and t ear fr om r e- ample, t he qualit y of successive gener a-
peat ed play.
Chapter 2Technological Change and Home Copy ing .47
t ions degr a des fa ir ly r a pidly. Wit h
digit al-t o-digit al copying, however , t he
qualit y of successive gener at ions can be
indist inguishable fr om or iginals.
Comput er - and/or micr opr ocessor -based
r ecor ding and playback equipment can
capt ur e, st or e, copy, and manipulat e
digit al infor mat ion (including music or
images) mor e r apidly and cheaply t han
in t he analog r ealm.
Digit al r epr esent at ions of music, images,
and infor mat ion code t he cont ent as a
bit st r eam of ones and zer os, which can
exist in elect r onic for m, independent of
any t angible, physical object . The bit
st r eam r epr esent ing an ar t ist ic wor k can
be t r ansmit t ed in elect r onic for m (wit h
no physical embodiment ), or it can be
st or ed in a new physical medium, wit h-
out alt er ing t he essent ial char act er ist ics
of t he wor k.
25
A physical embodiment is
not essent ial for a digit al wor k t o be a
fr eed piece of int ellect ual pr oper t y: t he
wor k can be fixed in elect r onic for m, and
can be dist r ibut ed elect r onically, r at her
t han in a physical embodiment (see ch.
3).
In addit ion t o DAT, some of t he ot her digi-
t al (playback and/or r ecor ding) for mat s t hat
ar e available now, or ar e expect ed t o be avail-
able over t he next sever al year s, ar e high-
light ed in box 2-F.
26
EROSION OF NICHE
BOUNDARIES
Over t he next decade, digit al r epr esent a-
t ions of cr eat ive wor ks and ot her home ent er -
t ainment will come t o pr edominat e. Consum-
er s will gr ow incr easingly accust omed t o
high-qualit y digit al for mat s, and t he abilit y t o
efficient ly st or e, copy, t r ansmit , and manipu-
lat e t heir cont ent s (e.g., wit h digit al video in-
t er act ive, er asable/r ecor dable digit al media,
or audio and video comput er per ipher als). As
t his happens, niche boundaries pr edicat ed on
cont ent or for mat (e.g., audio v. video, or
a udiot a pe
)
v. comput er media) will br eak
down. These niche boundar ies have alr eady
begun t o er ode significant ly: t he opt ical-disc
for mat s of t he 1980saudio compact disc,
compact disc video, compact disc int er act ive,
and digit al video int er act ive have evolved
fr om r ead-only, cont ent -specific car r ier s t o
manipulable, audio/video/soft war e oper at ing
syst ems. Mor eover , new digit al media like
digit al audiot ape (DAT) and er asable/r ecor -
dable compact disc (CD-E) will have mult iple
applicat ions in business and t he home, for ex-
ample, comput er dat a st or age, as well as
pr er ecor ded images and music. Mult ipur pose
har dwar e (i.e., comput er -based player /r eceiv-
er s) will come int o use.
27
25 F
or
~xamp]e, the ~i~~ repre=n~tion of a sound r ecor ding could be st r ipped fr om a cOm Wct disc, t r ~smit t ed via modem t o a
per sonal comput er wit h a per ipher al DAT, and t hen played. The infor mat ion cont ent in elect r onic for m dur ingt r ansr nission would be
t he same as in t he disc and t ape embodiment s. Similar ly, comput er soft war e or dat a can be t r ansmit t ed fr om one comput er t o an-
ot her ; it is t he same pr ogr am ir r espect ive of whet her it is st or ed on a disket t e.
26A ]onWr -t er m emp]e might be miniat ur e silicon r ecor der s on a chip)
available in per haps 10 year s or so. All t he digit al
cir cuit s equivalent t o t hose in a convent ional CD player could be cont ained in a single chip, which would become a player wit hout
moving par t s. Anot her chip wit h sever al gigabit s of memor y would car r y digit al music (appr oximat ely 4 gigabit s of ROM could car r y
t he cont ent s of a convent ional CD). IHeit ar o Nak@ima (Sony Cor p.), ~ot ~ in ~Di&s4 VO1. Zgt NO 8! Feb. 20) lg~g, P. 12. )
27 For emmple, ~drew Lippmm (Associate Dir@or/MIT Media bb) has been quot ed EM saying in t he cont ext of highdensit y
t elevision, for get TV set s. In 3 year s t her e wont be any. Inst ead, t her e will be comput er s t it h high-~~it y display scr eens. Inside
t hese comput er s t her e will be digit al inst r uct ions allowing t hem t o r eceive ABC, NBC, HBO, and anyt hing we can dr eam up. (27
Di gest , vol . 29, No. 6, Feb. 6, 1989, p. 13. )
Box 2-FOt h er Di gi t a l For m a t s Usi n g CD Tech n ol ogy
In addit ion t o t he compact disc audio for mat , var ious ot her for mat s can be used t o r ecor d music, images, dat a,
and ot her infor mat ion on a compact disc. The following sect ion descr ibes some of t hese now in use t o encode
audio, video, and comput er mat er ial on opt ical discs. Unt il now, discs for home use have been for play only: infor -
mat ion was r ecor ded at t he fact or y by a complex mast er ing pr ocedur e t hat could not be changed by t he con-
sumer . However , r ecor dable and er asable/r ecor dable CDs for home use ar e under development .
Comp a ct Di sc Vi d eo: Compact disc video (CD-V) is a laser disc for mat car r ying digit al video, as well as
digit al audio, t r acks. A pr ecur sor , t he analog laser disc, was fir st int r oduced in 1979, but it s popular it y was limit ed
(in par t , by t he int r oduct ion of videocasset t e r ecor der s).
CD-V discs come in 5-inch, 8-inch, and 12-inch sizes. The 5-inch CD-V single (t he same size as a conven-
t ional audio CD) holds 5 minut es of analog video (e.g., a music video) wit h a digit al soundt r ack on t he out er por -
t ion, plus about 20 minut es of addit ional CD-audio mat er ial. The cur r ent 8-inch ver sion, called t he CD-V EP,
holds about 40 minut es of analog video and analog and digit al sound (e.g., shor t films, car t oons, educat ional
shor t s), and t he 12-inch, or CD-V LP, ver sion holds up t o 120 minut es of analog video wit h digit al and analog
sound (e.g., movies). Exist ing video disc player s will play t he lar ger ver sions; older ones play analog sound only
and newer ones play digit al sound. A differ ent player is r equir ed for t he single because t he scanning sped is
differ ent . Combinat ion, or combi player s will play all t hr ee sizes, plus audio CDs; t her e also ar e dedicat ed play-
er s for t he 5-inch CD-V singles and 5-inch audio CDs.
Comp a ct Di sc I n t er a ct i ve: The compact disc-int er act ive for r nat , or CD-I, was fir st announced in 1986. It
is a specificat ion for video, audio, soft war e int er faces, and dat a on one 5-inch disc. The CD-I player (in r ealit y, a
per sonal comput er wit h a special int er face and TV monit or ) will display st ill pict ur es, animat ion, or full mot ion
video. CD-I also offer s var ying levels of audio qualit y for music and speech; t he highest -qualit y music is compar a-
ble t o t hat on an audio CD. Playing t ime depends on t he combinat ion of audio, video, and dat a on t hedisc, as well
as sound qualit y. One disc will hold about 74 minut es of digit al audio sound, or 288 minut es of analog mid-fi
st er eo, or 19 hour s of speech-gr ade monaur al sound. Video and dat a st or age gr eat ly shor t ens playing t ime.
Di gi t a l Vi d eo I n t er a ct i ve: Digit al video int er act ive (DVI) offer s about an hour of digit al full-scr een, full-
mot ion video, or else var ious combinat ions of full-mot ion video, st ill images, gr aphics, pr ogr amming, digit al
sound and t ext . A fr ame of video t elevision t akes up 600,000 byt es, so convent ional full-mot ion video at 30
fr ames/second cor r esponds t o a dat a r at e of 18 megabyt es/second. A CD holding 648 megabyt es of dat a could
cont ain only about half a minut es wor t h of full-mot ion video. DVI uses comput er dat a-compact ion t echnology t o
compr ess digit al video dat a, t hus incr easing t he amount of infor mat ion t hat can be r ecor ded.
For r ecor ding, DVI uses a comput er and pr opr iet ar y dat a compr ession t echnique t o analyze t he video fr ame-
by-fr ame. Only t he r elat ively small por t ion of a fr ame t hat differ s fr om t he pr eceding onet he par t act ually
conveying mot ion is st or ed. For playback, t he DVI micr opr ocessor t akes dat a off t he CD-ROM in r eal t ime and
decompr esses it t o r ecr eat e a high qualit y, moving image. This micr opr ocessor can allowt heviewer t o manipu-
lat e or modify t he pict ur e on t he scr een (e.g., r ot at e it , fr eeze a fr ame, zoom in, inver t it ).
At t he end of 1988, bet a t est s of var ious DVI applicat ions wer e being conduct ed; t hese include commer cial
adult and childr ens educat ional/t r aining syst ems, gover nment t r aining syst ems, home infor mat ion and shop-
ping ser vices, t r avel agency infor mat ion, fur nit ur e point -of-sale and int er ior design t ools, imaging and 3-D mod-
eling syst ems, mar ket ing r esear ch syst ems, and museum exhibit s. In Mar ch 1989, a major comput er manufac-
t ur er announced t hat it would endor se t he DVI st andar d. Add-on modules ar e expect ed t o be available by ear ly
1990 t hat will allow DVI t o be played on some per sonal comput er s.
Recor d a ble/Er a sa ble Comp a ct Di sc: As t he cont r over sy concer ning lar ge-scale int r oduct ion of con-
sumer DATs cont inues, a new set of home r ecor ding t echnologies is emer ging r ecor dable and r ecor dable/er as-
able compact discs.
The newest of t hese-t he t her mo-opt ical r ecor dable/er asable compact disc, called THOR (Tandy High-In-
t ensit y Opt ical Recor ding) was announced by t he Tandy Cor p. in Apr il 1988. Differ ent ver sions of play-er ase-
r ecor d CD syst ems had pr eviously been announced (e.g., by Sanyo and Thomson SA), and ot her s ar e r epor t edly
under development in t he Unit ed St at es and J apan. THOR t echnology is said t o be compat ible wit h cur r ent CD
audio t echnology, so t hat t he discs could be played in a convent ional CD player (and vice ver sa).
Con t i n u ed on n ext p a ge
Chapter 2Technological Change and Hom e Copy ing q 4 9
The r ead/wr it e/er ase t echnology is called CD-E. Blank CD-E discs will be blue, unlike convent ional silver
CDs. Accor ding t o t he developer , a blank THOR CD can be r ecor ded over and over again, using a low-level
r ecor ding laser t o heat a t her mally sensit ive dye polymer mat er ial in t he disc. Heat ing t he dye changes it s opt ical
pr oper t ies and cr eat es t he equivalent of t he pit s in a convent ional audio CD. These pit s ar e envir onment ally
st able, enclosed in a pr ot ect ive layer t o minimize t he possibilit y of damage. To er ase t he disc, t he same laser
r ever ses t he t her mo-opt ical pr ocess, smoot hing one or all of t he pit s. Tandy plans t o make consumer -audio
THOR r ecor der s available in 1990, and also plans t o int r oduce THOR comput er dat a st or age devices in 1991.
In 1987, Philips and Sony had announced plans for a CD mit e-once player (pr oducing discs t hat could not be
er ased and r eused), aimed at pr ofessional mar ket s for comput er dat a st or age or sound r ecor ding. The wr it e-once
t echnology is called CD-R; accor ding t o Philips, blank CD-R discs will be gold.
SOURCES: Rober t P. Fr eese, Opt ical Disks Become Er asable, I EEE S pect r u m , Febr uar y 1988, pp. 41-45. J ohn Gosch,
Fr om Thomson, a CD Player t hat Er ases and Recor ds, Elect r onics, Mar . 17, 1988, pp. 42-46. Ronald K J ur gen,
Consumer Elect r onics, in Technology 88, I EEE S pect r u m , J anuar y 1988, pp. 56-57. Pet er H. Lewis, Br ing-
ing Realism t o t he Scr een, Th e New Yor k Ti m es, Nov. 27, 1988, p. F9). J ohn W. Lyons, Nat ional Engineer ing
Labor at or y, Nat ional Inst it ut e of St andar ds and Technology, let t er t o J . Winst on, OTA Apr . 17, 1989. Ken
Pohlmann, DAT Hear s Foot st eps, Di gi t a l Au d i o, August 1988, pp. 16-17. Har r y Somer field, CD Recor der
Could Make Tape Obsolet e, S t . Pet er sbu r g Ti m es, May 29, 1988, p. 3F. Ar e Mult imedia PCs ar ound t he Cor -
ner ?, El ect r on i cs, May 1989, pp. 42-43. Philips and Sony Design CDs That Can Recor d, Tel ecom Hi gh l i gh t s
I n t er n a t i on a l , Nov. 11, 1987, p. 18. TV Di gest , vol. 28, No. 51, Dec. 19, 1988, p. 16. Digit al Video Int er act ive Tech-
nology, (pr omot ional mat er ials) Int el Cor p., 1988. Int el acquir ed t he DVI Technology Vent ur e fr om GE in 1988.
DVI was or iginally developed at t he David Sar noff Resear ch Labor at or y (for mer ly RCA Labor at or ies). Tandy
Cor p. pr oduct lit er at ur e, 1988. Tandy has not yet r eleased t he det ails of how THOR wor ks.
Since enact ment of t he 1976 copyr ight law, So far , it has not been ext r emely difficult t o
quest ions about home uses and home copy- classify blank media by pr ospect ive cont ent /
ing specifically, t he congr essional and judi-
cial debat es over home videocasset t e r ecor d-
er s (VCRs)
28
and t he r ecent congr essional
debat es over home audiot aping have cont in-
ued t o be addr essed on a niche-by-niche basis.
The cur r ent law (Tit le 17, U. S. C.) cont ains
special pr ovisions per t aining t o sound r e-
cor dings, comput er pr ogr ams, and mo-
t ion pict ur es. The home audio- and videot ap-
in g deba t es of r ecen t Con gr es s es h a ve
included ar gument s for and against a t ax or
r oyalt y on t he media used t o make cop-
ies i.e., on audio- or videot apes. Dist inc-
t ions among t hese niches ar e blur r ing, how-
ever , and may well disappear .
use: audio r ecor der s, video r ecor der s, and
comput er s have used differ ent , physically r ec-
ognizable blank media. In addit ion, r ecor d-
ing/playback equipment is gener ally r ecogniz-
able by int ended use: differ ent equipment is
gener ally used t o r ecor d audio, video, et c.
29
In t he not -so-dist ant fut ur e, however , t he
same r ecor der and/or blank medium might be
used for sound, images, or comput er dat a.
Ther efor e, dur able compulsor y-license-wit h-
fee pr ovisions (like a t ape t ax or home-
copying r oyalt y) might be complicat ed by
t he inabilit y t o classify all t he pr ospect ive uses
of omni-pur pose media and/or r ecor der s. For
example, a pr ovision per t aining t o devices
zavideo~ping issues wer e not put t . r est by t he 1984 Supr eme Cour t decision in S on y COV. V. Un i vem a l Ci o S t i d i os, I n c. S ee ch. 3.
wher e ar e except ions: for example, pulse code modulat ion (PCM) adapt er s can be connect ed t o a st er eo syst em, digit al r adio r e-
ceiver , or ot her audio sour ce, t o r ecor d audio on videot apes wit h a VCR. See: Bob Hodas, Digit al Recor ding Comes Home, Di gi t a i
Au d i o, J uly 1988, pp. 22-23, and J effr ey A. Tannenbaum, Adapt er s Allow Digit al Taping Using VCRs, Th e Wa l l S t r eet J ou r n a l , May
20, 1987.
50 . Copyr igh t an d Home Copy ing: Technology Challenges the La W
and/or media used t o copy sound r ecor dings
could well apply t o comput er s and er asable
opt ical discs, or t o a comput er and it s har d
disk; a blank digit al audiot ape could be used
t o r ecor d music or t o st or e comput er dat a.
DIRECT ELECTRONIC
DELIVERY
New infr ast r uct ur es and business ar r ange-
ment s facilit at ing new met hods of dist r ibu-
t ion for audio, video, and ot her ent er t ainment
and infor mat ion pr oduct s ar e being devel-
oped. The new infr ast r uct ur es include t r ans-
act ion-based syst ems t o deliver audio and
video mat er ials on demand (via opt ical fiber
cable or sat ellit e) and t he pr ospect of higher -
capacit y communicat ions channels t o t he
home. Also, soft war e pr oducer s, publisher s,
and pr ovider s ar e consolidat ing int o t ot ally
int egr at ed ent it ies t hat manage funct ions
fr om t he cr eat ion of new ar t ist ic wor ks t o
t heir final dist r ibut ion. These development s
could event ually make direct electronic deliv-
ery of audio, video, and ot her ent er t ainment
pr oduct s t o consumer s feasible. As Canadian
r ecor d pr oducer s not ed in t heir 1987 st udy of
home t aping: The development of cent r al-
ized st or age comput er s, sat ellit e and/or int er -
act ive cables pr esages new met hods of dist r i-
but ion of int ellect ual pr oper t y.
30
These new modes of deliver y challenge or
call int o quest ion some of t he convent ional
concept s of copyr ight . In par t for t his r eason,
t hey may be slow t o develop. In t he mean-
while, r epr esent at ives of t he r ecor ding indus-
t r y maint ain t hat it would not be just ifiable t o
delay or for ego addr essing copyr ight and
home audiot aping, just because t he music in-
dust r y might event ually benefit economically
fr om dir ect elect r onic deliver y t echnologies:
It is not just ifiable t o allow advances in t ech-
nology t o under cut t he financial healt h of t he
music indust r y based on assumpt ions and
pr edict ions t hat may never bear out .
31
Regar ding t he development of elect r onic
deliver y, some copyr ight pr opr iet or s consider
t hat t echnology is less impor t ant t han t he
cur r ent copyr ight law. In par t icular , t he r e-
cor ding indust r y consider s t hat dir ect elec-
t r onic deliver y of sound r ecor dings would r e-
quir e a (new) per for mance r ight for r ecor d
companies. If t he per for mance r ight wer e not
gr ant ed, RIAA maint ains, elect r onic deliver y
t o consumer s would not be economically vi-
able, because ot her ent it ies, such as cable
companies, could offer t he same ser vices wit h-
out t he per mission of, or compensat ion t o, r e-
cor d companies.
32
These ar e ar guable conclusions. Ther e is
some ambiguit y in t he cur r ent copyr ight law,
and it maybe t hat clar ificat ion might be suffi-
cient t o encompass copyr ight pr ot ect ion for
dir ect elect r onic deliver y t o consumer s. For
example, it is not clear t hat a one-t o-one,
pr eor der ed and/or pr epaid r et ail t r ansfer of a
copyr ight ed sound r ecor ding in elect r onic
for m const it ut es a per for mance, as opposed
t o a deliver y. Sect ions 106 and 114 of t he
cur r ent law affir m t he cont r ol of copyr ight
owner s in sound r ecor dings over deliver y of
copies in t he for m of phonor ecor ds; it is t he
Sect ion 101 definit ion of phonor ecor ds as
(mat er ial object s t hat is t r oublesome. It
might be possible t o ext end t he scope of Sec-
t ion 106 t o include elect r onic deliver y, wit h-
out ext ending r ecor d companies r ight s over
(elect r onic) per for mances of t he wor ks.
301~A St udy of Home Taping,
Canadian Independent Recor d Pr oducer s Associat ion (CIRPA), 1987, p. 51,
31H. ~wn, ~ ]etter t. J . Winst on, OTA, May z, 1989. Enc]osur e wit h comment s on dr aft ch. 9, p. 3.
3ZOTA s~ inteMew with RIAA e x e cu t i v e , Mm. 8, 1989.

Then, dir ect elect r onic deliver y of copy-
r ight ed mat er ial by t he copyr ight owner t o a
bona fide pur chaser might (in pr inciple, at
least ) be consider ed no mor e of a public per -
for mance t han would be a deliver y of physi-
cal mat er ial by mail. Rat her , an elect r onic de-
liver y could be consider ed an inst ance of
dist r ibut ing copies of t he copyr ight ed wor k t o
t he public for sale, under sect ion 106(3), albeit
in an unconvent ional manner .
Repr esent at ives of t he r ecor ding indust r y,
however , consider t hat , in pr act ice, t he dis-
t inct ions bet ween per for mance and deliv-
er y ar e ser iously under mined by consumer s
abilit y t o make home copies of music dist r ib-
ut ed by cable or sat ellit e ser vices. They ar gue
t hat t he pr eceding discussion fails t o capt ur e
t he basic copyr ight pr oblem in t his ar ea, be-
cause it ignor es t he widespr ead pr act ice of
home copying. Alt hough cust omer s who sub-
scr ibe t o cable and ot her music ser vices ar e
not licensed
33
t o copy t he music being per -
for med, RIAA ar gues t hat t hey will make cop-
ies. Thus, t he end r esult , especially for digit al
for mat s, will be indist inguishable fr om an
elect r onically deliver ed or iginal except
t hat t he r ecor ding company would r eceive no
compensat ion. Accor ding t o RIAA, cable com-
panies and ot her ent it ies per for m t he r ecor d-
ing indust r ys pr oduct wit hout compensat ion
t o t he indust r y and, in fact , sell t hat pr oduct
in compet it ion wit h t he r ecor ding indust r y by
offer ing a subst it ut e for r ecor d pur chases. To
t he ext ent t hat t he per for mances ar e copied,
RIAA consider s t hat r ecor d sales ar e fur t her
displaced. Ther efor e, RIAA consider s t hat t he
lack of a per for mance r ight makes exist ing
r ight s over dist r ibut ion unenfor ceable.
34
Thus, it appear s t hat t he ot her wise separ at e
issues of home copying and per for mance
r ight s can be linked by home copying pr ac-
t ices. But cr eat ing a new per for mance r ight
(and r oyalt y) would be a mor e indir ect means
for addr essing home-copying issues t han
ot her possible act ions like a home-copying
r oyalt y or t echnological copy-pr ot ect ion.
Recent business decisions by some copy-
r ight pr opr iet or s may have placed t hem in a
bet t er posit ion t o move t owar ds dir ect deliv-
er y. Mot ion pict ur e st udios ar e ent er ing t he
home video r ent al and cable mar ket s. Recor d-
ing companies, most of which have music-
publishing subsidiar ies, ar e acquir ing inde-
pendent music publisher s; t heir music-
publishing act ivit ies ea r n r evenues fr om
licensing and synchr onizat ion r oyalt ies for
soundt r acks, commer cials, et c., as well as
fr om per for mance r oyalt ies for br oadcast s
and public per for mances.
35
The net effect is a
t r end t owar ds ver y lar ge, consolidat ed fir ms
t hat can pr oduce new wor ks and dist r ibut e
t hem t hr ough a number of channels. For ex-
ample, t he Time-War ner mer ger could unit e
ss~i]e a Cab]e Comwy or ot her c~r ier may dist r ibut e per for mances ekct r onical]y (by playing sound r ecor dings for a mass
audience), it does not have t he r ight t o sell buyer s a license t o make copies. For dir ect elect r onic deliver y, t he seller would need t he
r ight t o license t he buyer t o make at least one copy of t he mat er ial. The r ight t o sell copies (or t o cont r act wit h someone else, e.g., a
manufact ur er , t o make copies for sale) is a r ight t hat sect ion 106(3) gr ant s exclusively t o t he copyr ight owner .
34H. ~=n, IUAA, ]etter to J . Winst on, OTA, May 2, 1989. Enclosur e wit h comment s on dr t i ch. 9, pp. 23.
sSFor exmple, i
n
eu]y 1989 Thor nEMI (which owns Capit ol and EMI Recor ds) announced Pl~s t o buy SBK Ent er t ainment Wor ld,
wit h it s cat alog of 250,000 songs, including copyr ight s for mer ly held by CBS Songs and MGM-Unit ed Ar t ist s. In 1987, War ner Com-
municat ions Inc. (which owns War ner Recor ds) bought t he t hen-lar gest music publisher , Chappell-Int er mng Music, Inc., wit h it s
cat alog of 400,000 songs; War ner /Chappell now has a cat alog of some 750,000 songs. (J on Par eles, Thor n-EMI Get s SBK for $337
Million, T h e New Yor h Ti mes, J an. 6, 1989, p. D14.)
The acquisit ion of Chappell-Int er song Music, Inc. by War ner Communicat ions pr oduced t he wor lds lmgest music publisher ,
War ner /Chappell; SBK-EMI is it s closest r ival. War ner /Chappell r epor t edly plans t o gr ow by acquir ing for eign music publisher s, as
well as smaller domest ic cat alogs. (J ean Rosenblut h, War ner /Chappell Head Looks t o Over seas Expansion, Var iet y, n.d., 1989, p.
123. )
52 q Copyr i gh t a n d Hom e Copyi n g: Tech n ol ogy Ch a l l en ges t h e La w
t he media fins publishing, mot ion pict ur e,
r ecor d, cable pr ogr amming, and cable syst em
oper at ion act ivit ies.
36
Boxes 2-G and 2-H spot light some of t he
new ser vices and syst ems being developed t o
br ing ent er t ainment and infor mat ion t o t he
h ome.
37
TECHNOLOGICAL COPY
PROTECTION
Pr oponent s of t echnological means for copy
pr ot ect ion not e t hat much of t he legal t r adi-
t ion of copy-r ight was developed under t he as-
sumpt ion t hat t her e was no t echnical solu-
t ion t o pr event pr ivat e copying, and t hat
enfor cement of laws against pr ivat e copying
would be vir t ually impossible.
38
Ther efor e,
t he solut ions hist or ically sought by r ight s
holder s wer e pr ivat e-copying r oyalt ies,
39
a s
opposed t o unenfor ceable bans on pr ivat e
copying. New t echniques t hat would pr event ,
or r aise subst ant ial bar r ier s t o, pr ivat e copy-
ing ar e being developed. While t hese may be
t echnically feasible, impor t ant and possibly
over r iding issues r emain as t o t heir polit ical
feasibilit y and social desir abilit y. In consider -
ing pr oposals for t echnological means for
copy pr ot ect ion, t echnical advances should be
r egar ded as necessar y ser vant s of policy,
r at her t han as sufficient r easons for set t ing
policy.
Some issues r aised by t he pr ospect of t ech-
nological means for copy pr ot ect ion have been
not ed ear lier by OTA, in t est imony concer ning
t he copyr ight issues posed by DAT:
Technological approaches to preventing
copying vary in effectiveness, and can be
undermined or defeated by new tech-
niques. The ext ent t o which consumer s
do seek t o cir cumvent a par t icular t ech-
nique will depend in par t on t he t ime and
cost r equir ed t o do so, as well as t he per -
ceived accept abilit y of t he copy pr ot ec-
t ion.
Technological approaches may require a
greater role for government than more
traditional ones like royalties. For exam-
ple, insofar as t he t echnologies ar e sus-
cept ible t o bypass or deact ivat ion, t he
Gover nment might wish t o make such
modificat ions illegal. Then, t o enfor ce
t his pr ohibit ion, eit her gover nment or
pr ivat e par t ies would have t o conduct
some for m of sear ch, inspect ion, or sur -
veillance. In addit ion, if such laws con-
t r olled impor t s, t his enfor cement would
also need t o be t aken int o account .
Technological approaches may amplify
the intermingling of international intel-
lectual property and trade issues. As t he
1986 OTA r ep or t on i n t ellect u a l p r op -
er t y n ot ed , a t t emp t s t o r esolve i n t ellec-
t u a l p r op er t y p r oblems a r e li k ely t o be
mor e effect i ve wh en u n d er t a k en a s pa r t
seF]oyd Nor r is, Time Inc. ~d Winner t o Mer ge, Cr eat ing br gest Media Company, T~ New Yor k ~me% Mw. 5, 1~9) P. Al. In
addit ion t o magazine and book publishing, Time Inc. s lines of business include cable t elevision and cable pr ogr amming (Home Box
OffIce). War ner Communicat ions, Inc. )s lines of business include film, r ecor ded music, cable t elevision, and music publishing.
3TFor a mor e t hor ough t r eat ment of new t elecommunicat ion infr ast r uct ur es and oppor t unit ies, .932 OTA-CIT-@7, op. cit ., f~t not e
12.
%20mput er soft war e isanar ea wher e unilat er al t echnical means for copypr ot ect ion have longbeenavailable. Int er est ingly, most of
t he major comput er soflwar e pr oducer s have abandoned copy pr ot ect ion for applicat ions scdlwar e packages, lar gely for mar ket ing
r easons: pr ot ect ed pr ogr ams caused t echnical pr oblems for legit imat e user s and wer e t ar get s for hacker s who bypassed t he pr ot ec-
t ion wit h a code br eaker or copy bust er .
%3ee, for example, A Technical Solut ion t o Pr ivat e Copying t he Case of Digit al Audio Tape, Gillian Davies, Eu r opea n Zn t el Mu a /
Pr oper t y Revi ew (Opinion), vol. 6, 1987, pp. 155-158.
Box 2-GNew I n f r a st r u ct u r es a n d S er vi ces
Technology is opening up new ways t o deliver infor mat ion and ent er t ainment int o t he home. These new
deliver y syst ems may event ually r eplace, or at least supplement , sales of audio r ecor dings, videocasset t es, and
pr epr ogr ammed comput er discs. If infor mat ion is deliver ed t o t he home in elect r onic for m, people can use cur -
r ent ly available t echnology t o make t heir own t empor ar y or per manent copies for fut ur e use.
Ca ble Syst ems: The Cable Communicat ions Policy Act of 1984 (Public Law 98-549) pr ohibit ed t elephone
companies fr om oper at ing cable t elevision syst ems in t heir own r egions, but t elephone companies cur r ent ly may
own and oper at e cable syst ems out side t heir own r egions or abr oad. Fiber opt ic cable syst ems whet her pr o-
vided by cable syst em oper at or s, phone companies, or ot her s would offer enor mous capacit y, compar ed wit h
convent ional copper war e t elephone lines or t he coaxial cabling t r adit ionally used for cable syst ems. They could,
for example, car r y int egr at ed ser vices digit al net wor k (ISDN) voice t elephone ser vice simult aneously wit h high-
qualit y audio and video (including high-definit ion t elevision), and high-speed dat a ser vices t o pr ivat e homes.
Cost is a major bar r ier t o inst alling t he last mile of fiber t o individual subscr iber s, and economic just ificat ions
for inst alling fiber t o homes ar e oft en based on pr oject ed ser vice offer ings like cable TV or video on demand.
Telephone companies and cable oper at or s ar e examining fiber -t o-t he-home syst ems, and t elecommunicat ions
and cable-equipment fir ms ar e developing fiber -based t r unk and dist r ibut ion syst em pr oduct s for cable oper a-
t or s.
Di gi t a l Mu si c Ser vi ces: Even wit hout fiber opt ic cable, it impossible t o deliver CD-qualit y sound t o homes.
A New Yor k-based fir m plans t o int r oduce a cable r adio ser vice in 1989. The ser vice will pr ovide eight channels of
digit al music over convent ional cable TV lines, plus an opt ional nint h channel offer ing pay-per -play r ecept ion
of special concer t s or album r eleases (for an addit ional fee). The fir m is r epor t edly negot iat ing blanket licenses
wit h BMI and ASCAP and having discussions wit h r ecor ding company execut ives, who have t r adit ionally been
unr ecept ive t o pay-per -play home deliver y syst ems. The ser vice will offer digit al audio in t he CD-audio for mat ,
using pr opr iet ar y t echnology t o compr ess up t o nine channels of 16bit , 44.1 kHz full-bandwidt h digit al audio, plus
mult iple dat a channels, t o t he r egular 6 Mhz cable bandwidt h. Cable companies would r eceive t he encr ypt ed
signal via sat ellit e and dist r ibut e it t o t heir subscr iber s over r egular cable t r unk and dr op lines. A special t uner
(leased or pur chased by t he subscr iber ) would at t ach t o t he subscr iber s st er eo t uner and t o t he cable like an
addit ional TV.
In J anuar y 1988, a Califor nia fir m announced a planned music-only digital radio s ervice offer ing 16 st er eo
channels of CD-qualit y sound, plus gr aphics/t elet ext , t o subscr iber s via coaxial, sat ellit e, and/or UHF-TV t r ans-
mission. The scr ambled signal, car r ied in t he 6 Mhz TV bandwidt h, would be r eceived via a special t uner t hat
would t ake t he digit al input and conver t it t o an analog out put . The fir m r epor t edly hopes t o ent er int o agr ee-
ment s wit h r ecor ding companies for album dist r ibut ion via a pay-per -album ser vice. Wit h t his ser vice, con-
sumer s (wit h addr essable r eceiver s) would be able t o buy CD-qualit y music at lower cost . (They would or der it by
cr edit car d via t oll-fr ee number s and r ecor d it at home on DAT or convent ional t ape r ecor der s. ) Recor ding com-
panies would r eceive a negot iat ed, pur e pr ofit licensing fee wit hout having t o bear manufact ur ing or dist r ibu-
t ion cost s. Ot her t han t his special ser vice, t he fir m plans t o oper at e as a convent ional r adio st at ion: playing sin-
gles and announcing t he album and ar t ist via a t ext gener at or display on t he TV scr een. As of ear ly 1989, t he
fir m was t est ing t he ser vice wit h a small subscr iber base, and hoped t o be on t he air by lat e 1989. Accor ding t o
t he fir ms pr esident , some of t he smaller r ecor ding companies, wit hout dist r ibut ion ar ms of t heir own, had ex-
pr essed int er est in t he pay-per -album concept , but as of Febr uar y 1989 no agr eement s had been r eached.
SOURCES: Lawr ence Cur r an, Two Fir ms Link Ar ms t o Run t he Last Mile, El ect r on i cs, Febr uar y 1989, p. 95.
Fr ed Dawson, GI Makes Major Moves int o Fiber , Cablevision, Sept . 12, 1988, p. 12.
St even Dupler , N.Y. Cable Fir m Set s 8-Channel Digit al Ser vice, Billboar d, Feb. 4, 1989, p. 1.
Gar y Slut sker , Good-Bye Cable TV, Hello Fiber Opt ics, For bes, Sept . 19, 1988, pp. 174-179.
Telcos Fight Back: Phone Companies Gear up for Bat t le t o Get int o Video Deliver y, Br oa d ca st i n g, Sept . 9,
1988, pp. 47-48.
Cer r it os: A Test ing Gr ound for t he Fut ur e, Tel eph on y, J an. 2, 1989, p. 1314.
TV Di gest , Dec. 5, 1988, vol. 28, No. 49, p. 8.
Digit al Radio Labor at or ies, Inc., Lomit a, CA (pr omot ional lit er at ur e, 1988), and Doug Talley (Digit al Radio
Labor at or ies), t elephone conver sat ion wit h OTA st aff, Feb. 10, 1989.
Int er nat ional Cablecast ing Technologies, Inc. pr oduct lit er at ur e and OTA st aff discussions wit h T. Oliver and
M. Seagr ave (Int er nat ional Cablecast ing Technologies), J uly 14, 1988.
Box 2-H Tr a n sa ct i on -Ba sed Di st r i bu t i on S yst em s
Many consumer s ar e alr eady obt aining ent er t ainment pr oduct s for home use wit hout pur chasing a disc or
t ape. Rent als, pay-per -view, and t elephone or cable jukeboxes r epr esent addit ional ways t o deliver ent er t ain-
ment t o t he home.
Vi d eo Ren t a ls: Consumer spending on home video r ent als has gr own r apidly wit h t he use of VCRs, going
fr om just $350 million in 1981 t o about $5.5 billion in 1988. Accor ding t o pr oject ions by Paul Kagan Associat es,
t he video r ent al business will be a $7 billion per year indust r y by 1990, even t hough VCR penet r at ion seems t o be
leveling off. The t r end is t owar d lar ge video super st or es, each car r ying 7,000 t o 12,000 t it les.
Videot ape r ent al st or es or chains or iginally oper at ed by pur chasing videot apes dir ect ly fr om t he dist r ibut or .
Because of gr owing needs for invest ment in invent or y t o compet e, t her e is now some movement t owar ds t r ansac-
t ion-based r ent al ar r angement s wher e t he r ent al st or e leases new r eleases fr om t he dist r ibut or wit h a per -r ent al
fee ar r angement . This pay-per -t r ansact ion (PPT) ar r angement r educes t he invent or y invest ment fr om t he
r ent al st or e and allows t he dist r ibut or t o shar e in t he r ent al pr oceeds.
Wit h t he move t owar ds PPT oper at ions comes t he development of comput er -based suppor t syst ems. In
pr inciple, t hese syst ems could be adapt ed t o t r ack elect r onic, r at her t han physical, t r ansact ions; comput er s and
dat a st or age facilit ies would r eplace t he physical invent or ies of pr er ecor ded videot apes.
Ca ble a n d Sa t elli t e P P V: In par t t o count er incr eased compet it ion fr om video r ent als, pay cable and sat el-
lit e dish pr ogr am pr ovider s ar e init iat ing t r ansact ion-based, pay-per -view (PPV) offer ings. Alt hough by ear ly
1989 per haps only 25 per cent of cable households had t he addr essable cable conver t er s r equir ed for PPV t r ansac-
t ions, some indust r y exper t s expect t hat t he r emainder will have t hem by 1991, making t he PPV business wor t h a
pr oject ed $2 billion per year by 1996, compar ed wit h $60 million in 1987. PPV t ypically wor ks by offer ing sub-
scr iber s special event s or movies not yet available on r egular pay cable ser vices. Pr oponent s not e t hat PPV offer s
mor e convenience t han video r ent al, but ot her s t hink t hat it s r eal appeal is t o movie buffs who want t o see films at
home befor e t hey ar e r eleased on casset t es or pay cable.
While PPV account ed for less t han 2 per cent of t he $13-billion per year cable indust r y, PPV offer ings can be
ext r emely pr ofit able for individual pr ogr am r ight s holder s. For example, alt hough only 600,000 households or -
der ed t he Tyson-Spinks boxing mat ch (at $35 apiece), t he fight pr oduced gr eat er r evenues for pr omot er s and
r ight s holder s t han t he 1988 Super Bowl. Movie st udios ear n an aver age of $250,000 for each film shown on PPV;
t heir PPV ear nings wer e $36 million in 1988 and ar e expect ed t o r each $1 billion by 1997. Because of PPVs
pot ent ial pr ofit abilit y, ser vices t hat collect ively t r ansmit movies t o cable oper at or s for PPV have been est ab-
lished by a gr oup of movie st udios, a gr oup of mult iple-syst em cable oper at or s, and a lar ge cable pr ogr ammer .
The collect ive PPV ser vices ar e t r ansmit t ed by sat ellit e t o cable oper at or s, who deliver t hem t o homes equipped
wit h addr essable conver t er s. Most of t hese r equir e a phone call; t o make PPV mor e user -fr iendly, some conver t -
er s (in 8 per cent of PPV homes) have impulse t echnology, which allows t he cust omer t o or der via pushbut t ons
on t he conver t er unit .
Unt il r ecent ly, a major bar r ier t o PPV was t he lack of r eliable t echnology for wir ing homes and handling
t r ansact ions and billing on a br oad enough scale. In 1986, for example, only 2.1 million homes wer e wir ed t o
r eceive PPV. Now, t he number of homes equipped t o r eceive PPV ser vices is appr oaching 10 million, and is
pr oject ed t o t op 40 million by 1996, accor ding t o Paul Kagan Associat es.
In t he long r un, PPV is t hought t o be video r ent als closest compet it or , especially in 5 t o 10 year s when ad-
dr essable conver t er s will be available t o all households. One advant age of PPV is t hought t o be pr ogr am diver sit y
via niche-cast ing: pr ogr ams wit h nar r ow appeal can be pr ofit ably offer ed by PPV. For example, if only one
per cent of 20 million cust omer s pay $20 t o r eceive an oper a, it will br ing in $4 million pr esumably, enough t o
pr oduce and dist r ibut e it at a pr ofit .
A ser vice t o offer sat ellit e dish owner s a var iat ion of PPV is scheduled t o begin in 1989, using a sat ellit e t o
deliver t he t op 10 videos and ot her made-for -PPV pr ogr amming 24 hour s a day. Cust omer s would or der t he pr o-
gr ams by dialing a t oll-fr ee number t o elect r onically r ent a video. Also, int er act ive PPV offer ings ar e under
development ; t hese w-ill allow viewer s t o select st or y opt ions or play games, using a keypad.
Con t i n u ed on n ext pa ge
Telep h on e a n d Ca ble J u k eboxes: I n Gr ea t Br i t a i n a t elep h on e ju k ebox ser vi ce bega n i n Oct ober 1987.
The ser vice allows consumer s t o call a special t elephone number and list en t o r ecor ds or albums and or der r e-
cords dir ect ly. The syst em uses a combinat ion of voice r ecognit ion, compact disc player s, and per sonal comput er s
on a local ar ea net wor k. The pr ovider (a r ecor ding company) r efer s t o t he syst em as t he r adio st at ion at t he end
of t he phone. Calls ar e billed by Br it ish Telecom; t he minimum is $0.50 for 3 minut es. In lat e 1987, t he ser vice
was aver aging 1,000 calls a day.
In 1989, a Miami-bad cable net wor k was der iving t he bulk of it s r evenue fr om char ging viewer s t o see a
music video on demand mor e or less. In t his ser vice, a select ion of up t o 1,000 music Video t it les scr olls along t he
bot t om of t he TV scr een; by dialing a local 976-number and punching in select ed song codes, t he viewer can or der
a par t icular t it le. However , like a convent ional jukebox, t he Video jukebox select ions play in t he or der r eceived, so
t her e may be a 20-minut e t o sever al-hour wait . The char ge is $2 for one video, $5 for t hr ee. The t elephone com-
pany keeps a small por t ion and t he ser vice shar es t he balance wit h t he cable oper at or s. In ear ly 1989, t he video
jukebox ser vice was on nine cable syst ems, as well as a few low-power VHF affiliat es. While t he scheme maybe
well suit ed for exploit ing popular local niches (r eggae in Miami, for example), and pr oponent s hope t hat t he t ech-
nology will expand t o local job and r eal est at e classified, it faces pr oblems finding enough cable syst ems wit h
spar e channels.
SOURCES: Mar k Albr ight , On Fast For war d: Video Super st or es Bust int o Tampa Bay Mar ket , St . Pet er sbu r g Ti m es, Mar .
20, 1988, p. I-l. (Ar t icle r epor t s dat a fr om Paul Kagan Associat es, Inc. )
Gr eg Clar kin, Bur net t and Vir gin Vision Dar e t o be Differ ent , Vi d eo Bu si n ess (New Yor k, NY), Sept . 30, 1988,
pp. 38-40.
Rich Kat z, Pay-per -ViewMusic Videos: Will Viewer s Ant e up t o Play Them? Channels, J anuar y 1989, p. 16.
Fr ancesca Lunzer , New Development s (Movies by t he Hour ), Hi gh Tech n ol ogy Bu si n ess, November 1988, p. 8
Edmond M. Rosent hal, Cable Oper at or s St age a Comeback for Pay-TV Ser vices, Tel evi si on /Ru d i o Age, Sept .
19, 1988, pp. 46-48.
Andr ew L. Yar r ow, Pay-per -View Television Is Ready for Takeoff, Th e New Yor k Ti m es, Nov. 14, 1988, p. D9.
(Ar t icle r epor t s dat a fr om Paul Kagan Associat es, Inc. )
Comput er Gr oup St ar t s, Vi d eo Bu si n ess, Sept . 30, 1988, p. 10.
PPT: Money Hasnt Changed Ever yt hing aft er an Emot ional VSDA, St aff Repor t , Vi d eo Bu si n ess, Sept . 16.
1988, pp. 18-19.
Tel eph on e News, vol. 9, No. 15, Washingt on, DC, Apr . 11, 1988, pp. 2-3.
of a mult ilat er al effor t ; unilat er al impo-
sit ion of t r ade r est r ict ions might lead t o
r et aliat or y r est r aint s on t r ade or t o det e-
r ior at ing int er nat ional r elat ionships.
Also, t her e is a danger t hat if int ellect ual
pr oper t y policy is est ablished in t he con-
t ext of t r ade issues, it may be skewed
fr om it s or iginal goals.
40
In comment s on a dr aft of t his r epor t , t he
gr eat er r ole for gover nment t han a t r adi-
t ional appr oach such as r oyalt ies, and t hat
...t he int egr it y of int ellect ual pr oper t y pr o-
t ect ion is essent ial t o U.S. compet it iveness in
int er nat ional commer ce and we do not see
why t echnological appr oaches t o defending
t he int egr it y of copyr ight should be dispar -
aged or r eject ed because t hey have some im-
pact s on t r ade.
41
RIAA t ook except ion t o t he lat t er t wo point s, As anot her issue, t o t he ext ent t hat t echno-
not ing t hat ...it is incor r ect t o assume t hat a logical appr oaches may make it mor e difficult
t echnologica l a ppr oa ch would r equir e a t o make noninfr inging or fair -use copies,
Copyr ight Issues Pr esent ed by Digit al Audio Tape, Test imony of Fr ed W. Weingar t en and Linda Gar cia, Office of Technology
Assessment , U.S. Congr ess, befor e a hear ing of t he Communicat ions Subcommit t ee of t he Senat e Commit t ee on Com m er ce, S ci en ce,
and Tr anspor t at ion, May 15, 1987.
ql H. ~=n, ~ ]et t er t o J . Winst on, OTA, May 2, 1989. Enclosur e wit h comment s on dr m ch. 9, PP. 45.
56 q Copyr i gh t a n d Hom e Copyi n g: Tech n ol ogy Challenges the Law
means would have t o be developed t o allow
such copying. The r ecor ding indust r y t akes
t he posit ion t hat legit imat e fair uses should
be pr eser ved and t hat exempt ions (fr om t ech-
nological copy pr ot ect ions) should and could
be wor ked out .
42
In pr act ice, however , spe-
cific exempt ion pr ocedur es and/or t echniques
t o cir cumvent t echnological copy pr ot ect ions,
or t o administ er exempt ions fr om or r eim-
bur sement s of copying r oyalt ies, might be so
complicat ed or cumber some t hat some fair
use would be discour aged.
Au d i o R ecor d i n gs
New t echnologies have made copy pr ot ec-
t ion possible for digit al and, per haps, for ana-
log sound r ecor dings. Machine-r eadable iden-
t ifica t ion of copyr ight ed wor ks (i.e., a n
elect r onic [cir cle-C] /[cir cle-P] mar king) and
specific ident ificat ion of wor ks (e.g., t it le and
publisher ) ar e now feasible.
43
Sever al t echno-
logical copy-pr ot ect ion t echniques have been
developed or pr oposed t o pr event or limit
copying of digit al r ecor dings. The best known
of t hese is t he CBS Copycode syst em, designed
t o pr event digit al-t o-analog-t o-digit al or ana-
log-t o-digit al copying on DAT machines.
44
Ot her t echniques t hat have r eceived some at -
t ent ion in t he t r ade pr ess ar e t he Unicopy
syst em pr oposed by t he RIAA (t hat r epor t edly
would allow one analog or digit al copy of a CD
t o be made),
45
t he Solo-Copy pr oposal by
Philips (t hat r epor t edly would allow consum-
er s t o make DAT copies of a CD, but not t o
make DAT copies of t hose copies), and t he
St op-Cop pr oposal by Kahn Communica-
t ions (t hat r epor t edly would pr event DAT
copying of copyr ight ed mat er ial on t apes or
CDS).
46
None of t hese t echniques can be im-
plement ed unilat er ally by t he r ecor ding com-
panies; har dwar e modificat ions would also be
r equir ed. For now, r ecor ding compa nies
would need joint agr eement s wit h (most ly,
over seas) consumer -elect r onics fir ms t o effect
t echnological copy pr ot ect ions.
S er i a l Copy Ma n a gem en t S yst em
A wor king gr oup compr ising r epr esent a-
t ives of J apanese and Eur opean har dwar e
manufact ur er s and Unit ed St at es and Eur o-
pean soft war e associat ions (e.g., RIAA and
IFPI) met in Apr il, J une, and J uly 1989 t o dis-
cuss DAT and copyr ight issues. The wor king
gr oup agenda focused on t echnological means
for pr event ing or limit ing DAT copying of CDs
a nd ot her digit a l sour ces.
47
In J uly 1989,
RIAA, IFPI, and har dwar e manufact ur er s
signed a MOU agr eeing t o seek legislat ion
mandat ing a new DAT for mat called Ser ial
Copy Management Syst em (SCMS). SCMS
would per mit dir ect , digit al-t o-digit al copying
of digit al r ecor dings and br oadcast s, but not
digit al-t o-digit al copies of t hese copies.
48
(For
det ails about t he agr eement and SCMS, see
box l-E.)
4ZI-I. ~=n, ~ ]etter to J . Winst on, OTA, May 2, 1989. Enclosur e wit h comment s on dr m ch. 9, P. 2.
The RIAA comment s did not det ail specific exempt ion pr ocedur es.
430TA st fi int e~ews wit h u Engineer ing Commit t ee, Dec. 6, 1988.
44Th
e
copyc~e syst em is desim~ t . pr event Copfingof ~ audio sign~ t hat ent er s t he DAT as an Walog signal. The met hod is not
int ended t o st op, and does not pr event , dir ect digit i-t o-digi~ copying. (J ohn W. Lyons, Nat ion~ Engineer ing ~bor at ov) Nat ion~
Inst it ut e of St andar ds and Technology, memor andum t o OTA, Apr . 10, 1989, comment s on dr afl ch. 9.)
4gAs de~r ibed in TV Di gest , Feb. 2X 1988, VO]. 29, No. 8 p. 14.
4e~ D2&~t, vol. 28, No. 6, Feb. 8, 1988; TV Di gest , vol . 29, No. 29, J UIY 17, 1989, P. 15.
A7TVDi&~t , Mm. 20, 1989, o]. 29, No. 12, p. 16; Shig ~ji~, ~dw~e Firms, ~be]s C]oser to Accord on DAT, Bi&md, Apr . 1,
1989, pp. 1,83.
4aThe ~~n ~r ier t . dir ~ di@~-t o-digit ~ DAT C
opy
i
n
g of CDs-differ ent ~pling r at es would be eliminat ed. DAT r ecor der s
wit h SCMS would make only one addit ional gener at ion of copies made fr om analog sour ces.

The MOU agr eement t o implement SCMS
is not binding on t he par t ies unless legislat ion
is passed. The RIAA has maint ained t he posi-
t ion t hat Feder al legislat ion is essent ial t o im-
plement ing any agr eed-on t echnological solu-
t ions, beca use such a gr eement s, a bsent
legislat ion, would r aise ser ious ant it r ust con-
cer ns.
49
Also, t he Elect r onic Indust r ies Asso-
ciat ion (EIA) and RIAA not e t hat legislat ion
would be needed t o make t he agr eement bind-
ing on manufact ur er s not par t icipat ing in t he
wor king gr oup.
50
CBS Copycod e S yst em
In an ear lier at t empt t o r esolve t he home
audiot aping cont r over sy gener at ed by t he
pr ospect of DAT r ecor der s coming int o wide-
spr ead home use, legislat ion was pr oposed in
1987
51
r equir ing t hat DAT r ecor der s sold in
t he Unit ed St at es befit t ed wit h a copy pr even-
t ion decoder so t hat suit ably coded mat er ial
could not be copied. The Copycode syst em, de-
veloped by CBS Recor ds, was t he basis for t he
pr oposals:
The Copycode syst em codes audio r ecor d-
ings by r emoving a nar r ow band of fr equen-
cies fr om t he audio signal; t his is r efer r ed t o as
put t ing a not ch in t he signal. The DAT r e-
cor der would cont ain a decoder t o sense t he
pr esence of t he not ch; when it was det ect ed,
t he r ecor der would be disabled, pr event ing
copying. The int ent was t o pr event copying,
wit hout not iceably degr ading t he sound qual-
it y of t he r ecor ded audio signal. The analog
Copycode encoder had logic cir cuit r y used t o
det er mine whet her t o encode t he audio sig-
nal, based on it s signal levels near 3840 and
2175 Hz. This logic cir cuit r y would swit ch t he
encoding not ch filt er on and off, pr esumably
t o pr event not ching of t he audio signal when it
might be mor e not iceable. The not ch was a
nar r ow band of fr equencies in t he vicinit y of
3840 Hz, which lies bet ween t he highest B-flat
and B on t he st andar d piano keyboar d. This
fr equency r ange is well wit hin t he r ange of
nor mal hear ing for young adult s; musical in-
st r ument s like pianos, synt hesizer s, piccolos,
and bells pr oduce fundament al not es in t he
encoding not ch.
52
Those opposing t his legislat ion ar gued,
among ot her t hings, t hat t he not ching could
ser iously degr ade t he r ecor ded sound (com-
par ed wit h t he unnot ched ver sion), t hat it
might pr oduce false posit ives (i.e., r efuse t o
r ecor d unnot ched mat er ials), and t hat it
would be r ela t ively ea sy t o cir cumvent .
Copycodes pr oponent s st r ongly disagr eed
wit h t hese ar gument s. To r esolve t his t echni-
cal disput e, Congr ess r equest ed t hat t he Na-
t ional Bur eau of St andar ds (NBS, now t he Na-
t ional Inst it ut e of St andar ds and Technology)
st udy a specific implement a t ion of t he
Copycode syst em. NBS r eceived t wo r ecor der s
and encoder s fr om CBS, along wit h pr opr ie-
t ar y descr ipt ive mat er ial t hat was kept confi-
dent ial. Par t of t he t est ing was done by a sub-
cont r a ct or specia lizing in psychoa coust ic
measur ement s. Two st akeholder gr oups t he
RIAA and t he Home Recor ding Right s Coali-
t ion (HRRC) agr eed t o fund t he NBS t est .
NBS was asked t o answer t hr ee ques-
t ions:
1. Does the copy prevention system achieve
its purpose to prevent DAT machines
from recording?
NBS found t hat it did not achieve it s
st at ed pur pose. Alt hough it pr event ed
copying not ched mat er ial much of t he
@H. ~=n, R.LAA, ]et t er t o OT& May 2, 1989. Enclosur e wit h comment s on dr afl ch. 9, p. 5.
~~ Di&st , VO]. 29, NO. 31, pp. 10-12.
~lH.R. 1384 and S. 506
%ke U.S. Depar t ment of Commer ce, Nat ional Bur eau of St andar ds, Nat ional Engineer ing Labor at or y, Evaluat ion of a Copy Pr e-
vent ion Met hod for Digit al Audio Tape Syst ems, NBSIR88-3725 (Febr uar y 1988), ch. 2. The mat er ial in t his sect ion is based on t he
NBS r epor t .
20-900 - 89 - 3
2.
3.
t ime, it also exhibit ed false posit ives (r e-
fused t o r ecor d unnot ched mat er ial) and
false negat ives (r ecor ded not ched mat e-
r ial). NBS st udied 502 t r acks on 54 CDs,
and found false posit ives for 16 t r acks on
10 discs.
53
Does the system diminish the quality of
the prerecorded material?
NBS concluded t hat , for some list en-
er s and some select ions, t he encoder
not ching pr oduced discer nible differ -
ences bet ween not ched and unnot ched
r ecor dings. Alt hough t he effect s wer e
fair ly subt le for some select ions, for ot h-
er s subject s could hear differ ences.
54
Can the system be bypassed, and, if so,
how easily?
NBS found t hat t he copy pr event ion
syst em could be bypassed easily; NBS
engineer s designed and implement ed
five differ ent cir cuit s t o bypass t he copy
pr event ion syst em. Accor ding t o NBS,
t hese cir cuit s wer e simple and would be
easy t o const r uct for about $100 each.
55
Aft er t he NBS t est r esult s wer e r epor t ed and
published, t he Copycode legislat ion was wit h-
dr awn.
Gen er i c Ap p r oa ch es t o P r even t i n g
Au d i o Cop yi n g
56
Aft er discussions wit h t he RIAA Engineer -
ing Commit t ee, t he OTA st aff r equest ed mor e
infor mat ion on t echnical appr oaches t o copy
pr ot ect ion, and on ways t o implement t hem.
57
To ident ify t he r ange of t echnically feasible al-
t er nat ives t o pr event or limit copying, t he in-
for mat ion summar ized below was pr ovided in
Apr il 1989 by t he RIAA Engineer ing Commit -
t ee. Neit her t he Engineer ing Commit t ee nor
t he RIAA int ended t he infor mat ion out lined
below as an endor sement of any par t icular
syst em or appr oach.
58
Accor ding t o t he RIAA Engineer ing Com-
mit t ee, copy-pr ot ect ion syst ems could be de-
signed t o pr event copying of pr er ecor ded and/
or br oadcast mat er ial, t o limit copying, or t o
allow copying wit h r emuner at ion (see box
2-I). Copy-pr ot ect ion syst ems of t hese t ypes
might be implement ed in t he analog domain,
t he digit al domain, or bot h.
For exa mple, copyr ight ed ma t er ia ls might
be ident ified via an analog baseband signalli-
ng system. By ident ifying ma t er ia ls in t he
a na log doma in, t he copyr ight -ident ifica t ion
infor mat ion in a digit al r ecor ding could not be
suppr essed by using analog channels in a r e-
cor der (see discussion of a na log cir cumven-
t ion below). The copy-pr ot ect ion signal would
be cont ained wit hin t he spect r um of t he r e-
cor ded mu s i c (or ba ck gr ou n d n oi s e) a n d
would be inaudible. Accor ding t o infor mat ion
pr ovided by t he RI AA Engineer ing Commit -
t ee, effor t s ar e ongoing t o develop a syst em of
t his t ype.
Copyr ight ed mat er ials could also be ident i-
fied in t he digital subcodes cur r ent ly in (digi-
t al) r ecor dings. If t hese mar kings wer e r ecog-
n i zed by r ecor der s , t h ey cou l d be u s ed t o
pr ovide pr ot ect ion fr om dir ect digit al-t o-digi-
t al copying. But t his t ype of copy pr ot ect ion
SsN~, Op. cit ., foot not e 52, P. 44-48.
54N~, op. cit ., foot not e
5
2! 49-W.
s~N~, Op. cit ., foot not e 52, P. 65-71.
56Mat er 1~ i
n
t hl~ ~ion ~umm~izes infor mat ion pr ofid~ b
y
t he ~ Engineer ing Commit t ee. (H. Rosen, ~, let t er t o J .
Winst on, OT& Apr . 17, 1989 (enclosur e); H. Rosen, IUAA, let t er t o J . Winst on, OTA, J un. 2, 1989 (enclosur e). )
57J . Winst on, OTA, let t er t o H. Rosen, u, ~. 12, 1988.
S8H. ~Wn, ~ let t er t o J . Winst on, OTA, Apr . 17, 1989 (enclosur e).
Box 2-I S yst em s t o Copy Pr ot ect S ou n d Recod i n gs
Op t i on 1: P r e ve n t cop yi n g of or i gi n a l p r e r e cor d e d a n d b r oa d ca st ma t e r i a l (or i gi n a l cop yi n g).
To do t his, t he or iginal copyr ight ed r ecor ding would be encoded wit h a digit al flag or an analog baseband
signal. A det ect or in t he r ecor der would sense t he code indicat ing t hat t he mat er ial was copyr ight ed and
would t hen disable t he r ecor ding funct ion.
Op t i on 2: Li mi t Cop yi n g.
a .
b .
Limit t h e a mou n t of or i gi n a l copying-This t ype of syst em would limit t he number of copies of
pr er ecor ded and br oadcast mat er ial t hat could be made on anyone r ecor der . It could oper at e in t he digi-
t al or analog domain. Each pr er ecor ded sour ce would have t he cat alog number and t ime code or t r ack
number encoded in a digit al subcode or baseband signal. When t he pr er ecor ded or br oadcast sour ce ma-
t er ial is copied, t he code would be ent er ed int o a nonvolat ile, cyclical memor y in t he r ecor der . The r ecor d-
er would only be able t o r ecor d a par t icular select ion once (unt il t he r ecor der s memor y was filled and
r eset , sever al t housands of copies lat er ).
Pr event ser ial copying-This t ype of syst em would allow an unlimit ed number of copies t o be made
fr om t he or iginal pr er ecor ded mat er ial, but would not allow copies t o be made fr om copies. In t he digit al
domain, copies of copyr ight ed mat er ials would be mar ked wit h a digit al flag. The r ecor der would r ecog-
nize t he flag (indicat ing t hat t he mat er ial t o be copied was it self a copy) and no addit ional copies of t he
copy could be made. In t he analog domain, t his syst em could oper at e wit h a baseband signal indicat ing
t hat t he wor k was copyr ight ed.
IOTA Not e: The SCMS for mat cor r esponds t o t his opt ion in t he digit al domain.]
Op t i on 3: Allow u n li mi t ed cop yi n g wi t h r emu n er a t i on .
a . De b i t ca r d syst e m This t ype of syst em would allow unlimit ed copying but would use pr epaid debit
car ds t o pr ovide r emuner at ion t o copy-r ight holder s for each copy made. It could oper at e in bot h t he digit al
and t he analog domains. Recor der s would be equipped wit h a debit car d r eader , and t he or iginal copy-
r ight ed r ecor dings would be encoded wit h a digit al ident ificat ion code and analog baseband signal. To
copy a copyr ight ed wor k, t he debit car d would have t o be inser t ed and left in t he machine for t he dur at ion
of t he r ecor ding; ot her wise, t he machine would fail t o r ecor d. Noncopyr ight ed wor ks could be copied wit h-
out a car d. The r ecor der s car d r eader would deduct a fee fr om t he debit car d each t ime a t r ack was r e-
cor ded. When t he car ds value was used up, t he consumer would need t o pur chase a new car d t o make
mor e copies. Car ds might be sold at r ecor d st or es or ot her consumer out let s; r evenues would be dist r ib-
ut ed t o copyr ight holder s, less a commission for t he dealer s. Car ds could be disposable, but if t he r eader
could r ecor d infor mat ion on t he car d it self (as on a D.C. Met r o far e car d) and if consumer s wer e given
incent ives t o r et ur n t he car ds, t hey could be used t o pr ovide infor mat ion about t he mat er ial copied or t he
har dwar e used.
b . Two-t i er ed b la n k t a p e levy For t his sor t of syst em, blank digit al audiot ape would be classified int o
t wo cat egor ies one t hat could be used t o copy copyr ight ed mat er ial (and would car r y t he levy) and one
t hat would not . For example, t ape car r ying t he levy might be pr int ed wit h whit e st r ipes on t he nonmag-
net ic back. The r ecor der would have a simple diode light det ect or t hat would look at t he t ape back as it
passed ar ound t he DAT r ecor der s helical scan dr um. Pr er ecor ded mat er ial would be encoded wit h a digi-
t al flag or baseband signal. At t empt s t o copy mat er ial wit h t he copyr ight code would fail unless t he r e-
cor der s light det ect or indicat ed t he pr oper out put fr om t he st r iped t ape.
SOURCE: RIAA Engineer ing Commit t ee, Apr il 1989. Mat er ial pr ovided for infor mat ion only, t o ident ify t he r ange of t echni-
cal alt er nat ives t o pr event or limit copying, and not as an endor sement of any par t icular syst em or appr oach.
could be cir cumvent ed by passing t he mat e- tion pr esent s a t echnical pr oblem in designing
r i a l t h r ou gh a di gi t a l -t o-a n a l og (D/A) con - copy pr ot ect ions for pr er ecor ded a nd br oa d-
ver t er . Digit a l or a na log copies of t he con- ca st digit a l sour ces. Accor ding t o t he RI AA
ver t ed signa l (wit hout t he digit a l subcodes) Engineer ing Commit t ee, t o limit t his cir cum-
could t hen be made. Such a n a log circu mv e n - vent ion, one (legislat ive) alt er nat ive would be
t o eliminat e analog input s on digit al r ecor d-
er s. This would for ce (copy-pr ot ect ed) dir ect
digit al-t o-digit al copying, or t he use of a sepa-
r at e analog-t o-digit al (A/D) conver t er t o COPY.
To pr event t he lat t er , t he pur chase of such
A/D conver t er s might be pr ohibit ed, except
for pr ofessional use. Alt er nat ively, specialized
A/D conver t er s t hat would gener at e a copy-
r ight flag could be mandat ed. Anot her opt ion
would be r equir e A/D conver t er s or analog in-
put s on digit al r ecor der s t o be designed so as
t o r educe t he qualit y (signal-t o-noise r at io) of
t he analog signal. This would penalize cir cum-
vent ion wit h copies of lesser qualit y.
59
An-
ot her opt ion, not yet t echnically feasible,
would be t o ident ify copyr ight ed mat er ials via
an analog baseband signal, as
a bove.
Vi d eo
The home video
R ecor d i n gs
indust r y, wit h
descr ibed
sales and
.
r ent als of pr er ecor ded videot apes of
-
movies,
car t oons, spor t ing event s, and t he like, devel-
oped ar ound t he use of home videocasset t e r e-
cor der s (VCRs). Ten year s ago, t he st udios did
not for esee t he benefit s of home video for t he
mot ion pict ur e indust r y. Indeed, in t heir at -
t empt s t o pr event t he int r oduct ion of VCRs
dur ing t he Sony case, st udio r epr esent at ives
ar gued t hat t he VCR would necessar ily cause
t he demise of t he ent ir e mot ion pict ur e indus-
t r y. As VCR use bur geoned, however , t he st u-
dios set up home-video ar ms t o pr oduce and
dist r ibut e pr er ecor ded videocasset t es. By t he
mid-1980s, movie indust r y r evenues fr om
videocasset t e sales (oft en, sales t o r ent al
st or es) equaled t heir r evenues fr om box office
r eceipt s.
60
By 1988, t he st udios saw t he pr ofit -
abilit y of r ent als and obser ved t hat t hey did
not appear t o cause a decline in box office r e-
ceipt s.
61
Subsequent ly, t hey began t o diver sify
int o pay-per -t r ansact ion (PPT) video r ent als
(see box 2-H).
At about t he same t ime, t he mot ion pict ur e
indust r y began t o consider est ablishing new
bar r ier s t o VCR r ecor ding of pay cable and
pay-per -view (PPV) pr ogr amming, video r ent -
als major compet it or s.
62
In a speech befor e
t he 1989 Wi n t er Con su mer Elect r on i cs Sh ow,
J a ck Va len t i , P r esi d en t of t h e Mot i on P i ct u r e
Associ a t i on of Amer i ca (MP AA), u r ged t h e
elect r on i cs a n d mot i on p i ct u r e i n d u st r i es t o
a gr ee on t ech n ologi ca l mea n s of cop y p r ot ec-
t i on for vi d eot a p es a n d movi es d eli ver ed by
p a y ca ble, PPV, and pr emium sat ellit e ser v-
ices.
63
SSH. ~sen, ~ let t er t o J . Winst on, OT& Apr . 17, 1989 (enclosur e); H. Rosen, RIAA, let t er t o J . Winst on, 0IA, J un. Z Igag
(enclosur e).
eO~NK &mur ces da~ Cit ed in Technolo~ a n d t h e Am er i ca n Econ om i c Tm n si t i on : Ch oi ces f or t h e Fu t u r e, OT A-T ET -283 Wa sh -
ingt on, DC: U.S. Gover nment Pr int ing Office, May 1988), p. 268.
61 According~ J ack Vdent i ~PM), t he mor e a per son wat ches movies on a VCR, t he mor e t hat per son is dr awn t o vie~ng a movie
in a t heat er . Valent i r epor t edly at t r ibut es t he r ise in movie at t endance by t heover -40 age gr oup t o home VCRviewing. (Bik xud,
J an. 21, 1989, pp. 7, 94.)
62Acco~ingto Nie]wn M~ia ~wmch, ~though VCR u~ge is rising, py ~d ~sic Cab]e t aping is dec]iningas a pr opor t ion of VCR
use. For t he fir st quar t er of 1987, Nielsens dat a show t hat r ecor dings fr om pay and basic cable const it ut e 9 and 5 per cent , r espect ively,
ofall VCRt apings; for t hefir st par t of 1988 t he figur es wer e 7 and 4 per cent , r espect ively. However , t he t ot al number oft apingsdur ing
t hese per iods incr eased, fr om an aver age of 13 per mont h t o 14 per mont h. (Cat her ine St r at t on, Cable Taping Down, VCR Usage
Rising, Mu l t i ch a n n el News, Sept . 12, 1988, p. 24.)
~Amr ding t o Va.lent i, ,...
In t he long t er m best int er est s of bot h indust r ies and t he paying public, pr er ecor ded videocasset t es as
well as movies deliver ed ma pay cable, pay-per -view, and sat ellit e pr emium ser vices must be made copypr oof. (Te/eu i si on /R a d i o
&e, Feb. 6, 1989, p. 91.)

Ear lier MPAA concer ns over unaut hor ized
duplicat ion of pr er ecor ded videot apes have
made some VCR pr oduct innova t ions pr ob-
lemat ic. For example, when one U.S. company
a nnounced pla ns t o ma r ket dua l-deck VCRs
in 1984, t he mot ion pict ur e indust r ys r epr e-
sent at ives r aised such fur or t hat t heir int r o-
duct ion wa s ha lt ed. For eign ma nufa ct ur er s
decl i n ed t o pr odu ce t h em a ft er bei n g a p-
pr oa ch ed by r epr es en t a t i ves of t h e mot i on
pict ur e indust r y.
64
The company filed suit against MPAA and
eight VCR ma nufa ct ur er s; t he ca se wa s r e-
por t edly set t led in ea r ly 1989.
65
An ot h er ex-
ample is a new home video pr oduct t hat com-
bines a VCR wit h a per sonal comput er and an
a r t ificia l int elligence syst em. The enha nced
VCR can aut omat ically t ape shows mat ching
a pr ofile of t he households viewing int er est s,
t hen play t hem back via r emot e cont r ol. The
syst em wor ks by linking individual unit s t o a
cent r a l comput er via t elephone lines; ea ch
unit scans TV list ings and select s shows t o be
t aped. Because t he syst em uses at least t wo
VCRs, however , it pot ent ially r aises concer ns
about it s use for unaut hor ized duplicat ion of
pr er ecor ded t a pes.
66
Some commer cia l videot a pes a r e ma nufa c-
t ur ed using a copy-pr ot ect ion syst em t hat ad-
just s t he gain signals being r ecor ded. If t his
t ape is copied on a home VCR, t he gain signals
on t he copy ar e fur t her at t enuat ed, t o t he
point wher e it pr oduces unst able images when
played. But some boost er cables or video
st a bilizer s
)
sold, ost ensibly t o impr ove pic-
t ur e qualit y when viewing t apes, could be used
t o cir cumvent copy-pr ot ect ion t echniques like
t his.
67
A new copy-pr ot ect ion t echnique in-
t ended t o code movies, spor t ing event s, and
ot her copyr ight ed mat er ial shown on pay ca-
ble and/or PPV ser vices is under going labor a-
t or y and mar ket t est s. The t echnique r epor t -
edly wor ks by fluct ua t ing t he per -fr a me
t r ansmission r at e of t he film t o dist or t copies
made wit h a home VCR. The developer hopes
t o int r oduce pr ocessed, or coded films on a
nat ionwide basis lat er in 1989.
68
S u m m a r y
Technological advances spur r ing t he gr ow-
ing use of home r ecor ding devices have sub-
st ant ially changed t he nat ur e and ext ent of
possible home uses of copyr ight ed mat er ial.
Policymaker s ar e now faced wit h a need t o de-
fine t he appr opr iat e balance bet ween t he con-
sequences of t echnological change and copy-
r ight law. The next chapt er will analyze t he
legal aspect s of home copying.
WTV Diges~, vol. 27, No. 26, J une 29, 1987, p. 13.
S5~Dige~t , Vo]. 29, No. 10, Mm. 6, 1989, p, 10 The fir m, ~.video, has reportedly received $1,8 million in set t lement s fr om manu-
fact ur er s and plans t o mar ket t he double-deck VCR in 1989. (TV Dzgest , vol. 29, No. 8, Feb. 20, 1989.)
Accor ding t o MPAA, Go-Video agr eed t o inser t ant i-copying devices in all it s dual-deck machines. (J ack Valent i, Peace Tr eat y Of-
fer ed bet ween Elect r onics, Ent er t ainment Int er est s, Tel evi si on /Ra d i o Age, Feb. 6, 1989, p. 91.)
66 The SmmTv syst em, int r ~uc~ by Met aview Cor p., is init ially being offer ed at $1$~, ~d is pr oject ed t o *1I for less t h~ $1,000 in
2t 03year s. (Tom Bier baum, Recor dingTVFar e Wit hout TouchingEit her a Video Machine or a Tape, Var iet y, Feb. 1-7, 1989, p. 52. )
67 For eup]e ~ ~dve~isement i
n
Th
e
New Yor her (J m. 23, 1989, p. 101) offer s a digit al video st abilizer t o e]iminat e video
copyguar ds, colo~ shi!ls and dist or t ion s. Accor ding t o t he ad, t he device, available for about $50, is not int ended t o copy r ent al mov-
ies or copyr ight ed t apes t hat may const it ut e copyr ight infr ingement .
GaEid~ Cor p. product lit er at ur e (Cambr idge, M-A: 1989).
Ch a p t er 3
Lega l Asp ect s of Cop yr i gh t
a n d Home Cop yi n g
CONTENTS
Pa ge
CONSTITUTIONAL BASIS FOR COPYRIGHT LAW . . . . . . . . . . . . . . . . . . . 65
Definit ion of Copyr ight . * * * o * * . * * o * * . . . . . . . * * . , . . . . . . . . . . . . * . * . . 65
Copyr ight Clause . . . . 900* *e. O * * * @* * * * * o . * * . * * * . . . . . . . . . . . . . . . . . 65
COPYRIGHT LAW OBJ ECTIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
THE DEVELOPMENT AND CURRENT BODY OF COPYRIGHT LAW . . . 67
ANALYSIS OF HOME RECORDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
The Sony Case q . . . . , * . . , * * * , * * . . . . . * * * . . * * * , * * . . * . * . . . . . . * * * . * 70
Home Use of Recoding Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
THE INTELLECTUAL PROPERTY SYSTEM AND HOME COPYING . . . . 75
Concept of Int ellect ual Pr oper t y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
St at ut or y Concept of Int ellect ual Pr oper t y . . . . . . . . . . . . . . . . . . . . . . . . . 75
Recent Technological Development s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
COMPARISON OF THE AMERICAN INTELLECTUAL PROPERTY
SYSTEM WITH OTHER INTERNATIONAL COPYRIGHT SYSTEMS . 78
The Unit ed St at es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Gr eat Br it ain .*. *o** *o". ,oe**o. oe. s.*. ... *.. * * * d . . . . . . . . . . . . . . 81
Ca na da * o * * o o . 9 * * * o . * . * o . . o * . * . * * . * . . * . . . . . . . . . e . d o . * * , , * . . . * 82
Fr ance *. *. *o. . . oo*. . *** . . ** . . . o. . . . **. . . *. *. . . . . . . *. . . *. . . *** 83
Summar y q **o *** O**oe. .*** . . . . . . . . . . . . . . . . . . . . . . . q **. *****. * 84
CHANGES TO TRADITIONAL AMERICAN COPYRIGHT CONCEPTS . . . 84
Int er nat ional Pr ot ect ion of Amer ican Int ellect ual Pr oper t y . . . . . . . . . . . 84
Ar t ist s Right s . . ** ***. *. . **m. . **. . , . **. . . . . . . , *. *******. *. *. , . * 86
Ch a p t er 3
Lega l Asp ect s of Cop yr i gh t a n d Home Cop yi n g
CONSTITUTIONAL BASIS
FOR COPYRIGHT LAW
Def i n i t i on of Copyr i gh t
Amer ican copyr ight is a const it ut ionally
sanct ioned and legislat ively accor ded for m of
pr ot ect ion for aut hor s against unaut hor ized
copying of t heir or iginal wor ks of aut hor -
ship (17 U. S. C., Sect ions 102, et sec. (1982) ).1
These wor ks include lit er ar y, dr amat ic, musi-
cal, ar t ist ic, and ot her int ellect ual wor ks. The
copyr ight owner is given t he exclusive r ight t o
use and t o aut hor ize var ious uses of t he copy-
r ight ed wor k: r epr oduct ion, der ivat ive use,
dist r ibut ion, per for mance, and display. Viola-
t ion of any of t he copy-r ight owner s r ight s
may r esult in an infr ingement of copyr ight ac-
t ion. However t he copyr ight owner s r ight s in
t he wor k ar e neit her absolut e nor unlimit ed in
scope, however .
Copyr i gh t Cl a u se
The U.S. Const it ut ion gr ant s Congr ess t he
power t o r egulat e copyr ight s. This aut hor it y
is cont ained in t he copyr ight clause, which
pr ovides:
Clause 8. The Congr ess shall have Power . . .
To pr omot e t he Pr ogr ess of Science and t he
useful Ar t s, by secur ing for limit ed Times t o
Aut hor s and Invent or s t he exclusive Right t o
t heir r espect ive Wr it ings and Discover ies.
(U.S. Const it ut ion, ar t . I, sec. 8, cl. 8)
2
Much of t he st r uct ur e and basis for Amer i-
can law is der ived fr om it s Br it ish legal ant e-
cedent s. Aft er t he int r oduct ion of t he pr int ing
pr es s i n E n gl a n d i n t h e l a t e 1400s , t h e
Cr owns fir st r esponse wa s t o cont r ol wha t
wr it ings wer e pr int ed or copied. The ear liest
Br it ish copyr ight la ws wer e ena ct ed in t he
1500s t o pr omot e censor ship by t he gover n-
men t i n cooper a t i on wi t h a mon opol i s t i c
gr oup of pr int er s known a s t he St a t ioner s
gu i l d.
3
This syst em colla psed when t he com-
pany failed t o exer cise discr et ion as censor s,
bu t u s ed i t s mon opol y power t o s et h i gh
pr ices. Par liament s r esponse in 1695 was t o
allow t he St at ioner s copyr ight s t o expir e, but
t his r esult ed in a per iod of anar chical publica-
t ion. I n 1709 Pa r lia ment r esponded t o t he
sit uat ion by enact ing legislat ion known as t he
St at ut e of Anne. This st at ut e gr ant ed a copy-
r ight t o aut hor s, as opposed t o pr int er s, for a
per iod of 14 year s. The copyr ight was r enew-
able for an addit ional 14 year s if t he aut hor
was st ill alive. Aft er t he expir at ion of t he copy-
r ight , t he wr it ing became par t of t he public
domain, available for t he use of anyone. This
fir st moder n copyr ight law became t he model
for s u bs equ en t copyr i gh t l a ws i n En gl i s h -
spea king count r ies.
4
See: Har r y G. Henn, Copyr i gh t Pr i m er (New Yor k, NY: Pr act icing Law Inst it ut e, 1979), p. 4.
zIt is inst mdive t . consider t h
e
si~ificmce of t he exact language cont ained in Clause 8. The use of t he Wor d wr it ings si~ifies
t hat t her e must be some per manence in t he act ual for m of expr ession or some specific ar t iculat ion t hat can be ascer t ainable eit her
dir ect ly or t hr ough some mechanism. This for m of expr ession is mor e concr et e and definit e t han basic ideas. Aut hor r efer s t o t he
cr eat or of t he wr it ings and indicat es t hat t he wr it ing must be t he aut hor s unique and individual wor k, not t aken fr om anot her
sour ce. The concept ofexclusive r ight indicat es t hat t he r ight s accr uing fr om copyr ight owner ship r epose solely wit h t he owner of
t he copyr ight , who may not necessar ily be t he cr eat or of t he wr it ing. Congr ess has dealt wit h t he aspect of limit ed t imes in
differ ent ways over t he year s. In it s most r ecent enact ment , t he 1976 Copyr ight Act , Congr ess det er mined t hat limit ed t imes is t he
hfeaft heaut hor plus50year s. These concept s and t he scope oft heir cover age have been subject t o judicial r eview and int er pr et at ion.
(See: David Nimmer and Melvin B. Nimmer , Nimmer on Copyr i gh t (New Yor k , NY: Mat t hew Bender , 1988), vol. 1, sec. 1.03 -1.08.)
3See: U.S. Congr ess, Olllce of Technology Assessment , I n t el l ect u a l Pr oper t y Ri gh t s i n a n Age of El ect r on i cs a n d I n f or m a t i on , OTA-
CIT-302 (Melbour ne, FL: Kr eiger Publishing Co., Apr il 1986), pp. 34-36.
41bid.
65
Congr ess const it ut ional gr ant of copyr ight
r egulat ion is mor e r est r ict ed t han it s English
ant ecedent concer ning bot h t he subject of
copyr ight s and t he per iod of t ime for which
copyr ight s ar e gr ant ed. The subject mat t er of
Amer ican copyr ight cover s t he wr it ings of
aut hor s. Under t he Amer ican copyr ight sys-
t em, t he aut hor s exclusive r ight s in t heir
wor ks ar e gr ant ed for a per iod of t ime, aft er
which t hey r ever t t o t he public domain. This
Amer ican appr oach t o copy-r ight embodies a
dualit y of int er est : t he st imulat ion of int ellec-
t ual pur suit s and t he pr oper t y int er est s of t he
copyr ight owner . These compet ing concept s
have been a cent r al issue in t he development ,
implement at ion, and int er pr et at ion of Amer i-
can copyr ight laws.
COPYRIGHT LAW
OBJECTIVES
A fundament al goal of copyr ight law is t o
pr omot e t he public int er est and knowledge
t he Pr ogr ess of Science and t he useful Ar t s.
A dir ect ly r elat ed copyr ight object ive is t he
pr omot ion and t he disseminat ion of knowl-
edge t o t he public. Alt hough copyr ight is a
pr oper t y int er est , it s pr imar y pur pose was not
conceived of as t he collect ion of r oyalt ies or
t he pr ot ect ion of pr oper t y; r at her , copyr ight
was developed pr imar ily for t he pr omot ion of
int ellect ual pur suit s and public knowledge. As
t he Supr eme Cour t has st at ed:
The economic philosophy behind t he clause
empower ing t he Congr ess t o gr ant pat ent s
and copyr ight s is t he convict ion t hat encour -
agement of individual effor t s by per sonal gain
is t he best way t o advance public welfar e
t hr ough t he t alent s of aut hor s and invent or s
in Science and t he useful Ar t s.
5
Ther efor e, t he congr essionally mandat ed
gr ant t o aut hor s of t he limit ed monopoly is
based on a dualism t hat involves t he publics
benefit s fr om t he cr eat ivit y of aut hor s and t he
economic r ealit y t hat a copyr ight monopoly is
necessar y t o st imulat e t he gr eat est cr eat ivit y
of aut hor s. A dir ect cor ollar y t o t his concept is
t hat t he gr ant of a monopoly would not be jus-
t ifiable if t he public did not benefit fr om t he
copyr ight syst em. Melvin Nimmer obser ved
t hat t he Fr amer s of t he Const it ut ion r egar ded
t he syst em of pr ivat e pr oper t y as exist ing per
se for t he public int er est . Ther efor e, in r ecog-
nizing a pr oper t y st at us in copyr ight , t he
Fr amer s ext ended a r ecognit ion of t his public
int er est int o a new r ealm.
6
Thus, policy ar gu-
ment s t hat equat e copyr ight wit h r oyalt y in-
come, or t heor ies t hat asser t t hat copyr ight is
necessar y in or der t o secur e r oyalt y income,
r un count er t o t his t heor y and appear t o be in-
consist ent wit h t he int ent of t he Fr amer s.
The Supr eme Cour t is well awar e of t hese
compet ing values and expr essed it s r ecogni-
t ion in t he 1984 S ony ca se:
As t he t ext of t he Const it ut ion makes plain,
it is Congr ess t hat has been assigned t he t ask
of defining t he scope of t he limit ed monopoly
t hat should be gr ant ed t o aut hor s or t o inven-
t or s in or der t o give t he public appr opr iat e ac-
cess t o t heir wor k pr oduct . Because t his t ask
involves a difficult balance bet ween t he int er -
est of aut hor s and invent or s in t he cont r ol and
exploit at ion of t heir wr it ings and discover ies
on t he one hand, and societ ys compet ing in-
t er est in t he fr ee flow of ideas, infor mat ion,
and commer ce on t he ot her hand, our pat ent
and copyr ight st at ut es have been amended r e-
peat edly.
7
The concept of copyr ight pr esent s a seem-
ing par adox or cont r adict ion when consider ed
wit hin t he cont ext of t he Fir st Amendment
fr eedom-of-speech guar ant ees: while t he Fir st
Mcu er v. S t ei n , 347 U.S. 201, 219 (1954).
SNimmer , op. cit ., foot not e 2, VO1. 1, ~. 1~2. 1
r sony COP- v. Unlve=al Cio S t u d i os, I n c. 464 U.S . 417, 429 (19M).
Chapter 3Legal As pects of Copy right and Home Copy ing . 67
Amendment guar ant ees fr eedom of expr es-
sion, it can be ar gued t hat copyr ight seems t o
r est r ict t he use or disseminat ion of infor ma-
t ion. It can be ar gued, however , t hat copy-
r ight , t o t he degr ee t hat it st imulat es expr es-
sion and encour ages wr it ing and ot her effor t s,
fur t her s Fir st Amendment expr ession values
by encour aging t he quant it y of speech t hat
is cr eat ed. In at t empt ing t o r esolve t hese con-
flict ing int er est s, t he cour t s have adopt ed a
t est t hat weighs t he int er est s of fr eedom of ex-
pr ession and t he pr oper t y int er est s of t he
copyr ight holder t o ar r ive at an accept able
balance.
8
An ext ensive body of case law has
been developed t hat weighs and count er bal-
ances Fir st Amendment concer ns and t he
r ight s of t he copyr ight holder .
9
Hence, t he Amer ica n copyr ight syst em is
based on t wo compet ing int er est s: int ellect ual
pr omot i on a n d pr oper t y r i gh t s .
10
Combi n e d
wit h t hese fa ct or s is t he Fir st Amendment
fr eedom-of-expr ession concer n. Cour t s ha ve
ba la nced a nd a ssessed t hese seemingly con-
flict ing element s, a nd Congr ess ha s consid-
er ed t hem in enact ing copyr ight legislat ion.
THE DEVELOPMENT AND
CURRENT BODY OF
COPYRIGHT LAW
Aft er sever ing polit ical t ies wit h Gr eat Br it -
ain, t he for mer Amer ican colonies sought
means t o secur e copyr ight laws. In 1783, t he
Cont inent al Congr ess passed a r esolut ion en-
cour aging t he var ious St at es t o enact copy-
r ight legislat ion. All of t he St at es except Dela-
war e enact ed some for m of copyr ight st at ut e,
alt hough t he var ious St at e laws differ ed
gr eat ly .11 Because of t he differ ences in t he
St at e copyr ight laws and t he ensuing difficul-
t ies, t he Fr amer s of t he Const it ut ion, not ably
J ames Madison, asser t ed t hat t he copyr ight
power should be confer r ed t o t he legislat ive
b r a n ch .
12
Th i s con cept wa s u l t i ma t el
y
adopt ed, and Congr ess was gr ant ed t he r ight
t o r egulat e copyr ight . (Ar t . I, sec. 8, cl. 8).
The Fir st Congr ess in 1790 enact ed t he fir st
Feder al copyr ight act .
13
This legislat ion pr o-
vided for t he pr ot ect ion of t he aut hor s r ight s.
Comment at or s have wr it t en t hat t he cent r al
concept of t his st at ut e is t hat copyr ight is a
gr ant made by a gover nment and a st at ut or y
pr ivilege, not a r ight .
14
The st at ut e was sub-
st ant ially r evised in 1831
15
t o add copyr ight
cover age t o musical composit ions and t o ex-
t end t he t er m and scope of copyr ight . A sec-
ond gener al r evision of copy-r ight law in 1870
16
designat ed t he Libr ar y of Congr ess as t he lo-
cat ion for copyr ight act ivit ies, including t he
deposit and r egist r at ion r equir ement s. This
legislat ion ext ended copyr ight pr ot ect ion t o
ar t ist ic wor ks. The t hir d gener al r evision of
Amer ican copy-r ight law in 1909
17
per mit t ed
copyr ight r egist r at ion of cer t ain t ypes of un-
published wor ks. The 1909 legislat ion also
aNimmer , op. cit ., foot not e 2, vol. 1, *. 1.10
%ee: Ha r pv- & R ow, Pu bl i sh er s, I n c. v. Na t i on En t er pr i se, 471 U.S. 539 (1985).
Whe Recor ding Indust r y Associat ion of Amer ica, Inc. OUAA) does not discer n a t ension bet ween t hese int er est s. The RIAA con-
t ends t hat t he availabilit y of copyr ight pr ot ect ion st imulat es t he cr eat ive pr ocess and pr ot ect s t he copyr ight owner s pr oper t y int er -
est in t he pr cduct of t he cr eat ive pr ocess. The RL4A believes t hat t he t wo fact or s ar e mut ually r einfor cing, not ant agonist ic. (H.
Rosen, RIAA, let t er t o J . Winst on, OT& May 2, 1989, enclosur e wit h comment s on dr afl ch. 5.)
~ ILymm my Pat ,t er Wn, Copyr zght in Hls~r la/ Per spect ive (Nashville, TN: Vander bilt Univer sit y Pr ess, l~fi~, P. 183.
lz~ld., pp. 192-193.
IWh. 15, 1, 1 St at . 12. See: OTA-CIT-302, op. cit ., foot not e 3, p. 64.
14patterson, op. cit ., foot not e 11, PP. 19S1W.
54 stat. 436.
IBAct of Ju]y 8, 1870, C. 230, 16 St at . 198.
ITAct of Mm, 4, 190!3, C. 320, 35 %lt . 1075.
changed t he dur at ion of copyr ight and ex-
t ended copyr ight r enewal fr om 14 t o 28 year s.
A 1971 amendment ext ended copyr ight pr o-
t ect ion t o cer t ain sound r ecor dings.
18
Th e
four t h and most r ecent over haul of Amer ican
copyr ight law occur r ed in 1976, aft er year s of
st udy and legislat ive act ivit y.
19
The 1976 legis-
lat ion modified t he t er m of copyr ight and,
mor e significant ly, included t he fair -use con-
cept as a limit at ion on t he exclusive r ight s of
t he copyr ight holder .
Thr oughout t he evolut ion of Amer ica n
copyr ight law, t he cent r al dr iving for ce was
t he desir e t o keep legislat ion in pace wit h
t echnological development s t hat affect ed t he
disseminat ion of knowledge.
20
As t he U.S. Su-
pr eme Cour t summar ized r ecent ly in t he
Sony copyr ight decision:
Fr om it s beginning, t he law of copyr ight has
developed in r esponse t o significant changes
in t echnology.... Indeed, it was t he invent ion
of a new for m of copying equipment t he
pr int ing pr ess t hat gave r ise t o t he or iginal
need for copyr ight pr ot ect ion.... Repeat edly,
as new development s have occur r ed in t his
count r y, it has been t he Congr ess t hat has
fashioned t he new r ules t hat new t echnology
made necessar y.
21
The 1976 Act set out t he r ight s of t he copy-
r ight holder , which include: t he r epr oduct ion
of wor ks in copies or phonor ecor ds; cr eat ion
of der ivat ive wor ks; dist r ibut ion of copies of
t he wor k t o t he public by sale, r ent al, lease, or
lending; public per for mance of copyr ight ed
wor k; and display of copyr ight ed wor k pub-
licly (17 U. S. C., sec. 106 (1982)). The st at ut e
does, however , specify cer t ain except ions t o
t he copy-r ight owner s exclusive r ight s t hat ar e
noninfr inging uses of t he copyr ight ed wor ks.
These except ions include t he fair use of t he
wor k (17 U. S. C., sec. 107 (1982)), r epr oduc-
t ion by libr ar ies and ar chives (17 U. S. C., sec.
108 (1982)), educat ional use (17 U. S. C., sec.
110 (1982)), and cer t ain ot her uses.
A clear under st anding of t he fair -use excep-
t ion is of ext r eme impor t ance, as t he concept
of home use appear s t o be a judicially cr e-
at ed der ivat ive of t he fair -use doct r ine. This
doct r ine has been applied when cer t ain uses of
copyr ight ed wor ks ar e defensible as a fair
use of t he copyr ight ed wor k.
22
It has been
said t hat t his doct r ine allows t he cour t s t o by-
pass an inflexible applicat ion of copyr ight law,
when under cer t ain cir cumst ances it would
impede t he cr eat ive act ivit y t hat t he copy-
r ight law was supposed t o st imulat e.
23
Var i-
ous a ppr oa ches h a ve been a dopt ed t o
int er pr et t he fair -use doct r ine. Some com-
ment at or s have viewed t he flexibilit y of t he
doct r ine as t he safet y valve of copyr ight
laws. Ot her s have consider ed t he uncer t ain-
t ies of t he fair -use doct r ine t he sour ce of unr e-
solved ambiguit ies. Some comment at or s con-
t end t hat t he fair -use doct r ine has been
applied pr emat ur ely at t imes, such as in t he
case of home use, wher e t he doct r ine is used
as a defense t o a claim of infr ingement . They
la~b]ic ~W 92-140, CM,. 16, 1971, w Sht . 391.
lg~b]ic ~w 94453, Oct . 19, 1976, 90 St at . 2541, codified at 17 U.S.C. sec. 101, et seq. (1982).
mRich~d Wincer and Ir ving M~de]], Co~r i gh t , Pa t en t s, a n d Tr a d em a r k s: Th e Pr ot ect i on of I n t el l ect u a l Pr oper t y (Bbbs Fer r y,
NY: Oceana Publicat ions, 1980), p. 25.
z1464 U.S. 417, 430-431 (1984).
zz~for e c~ificat lon of t he f~r -u= except ion in t he 1976 copyr ight act , t he fair -use concept was upheld in a common law copY-
r ight act ion in Hem i n gwa y v. Ra n d bm Hou se, I n c., 53 Misc.2d 462,270 N.Y.S. 2d 51 (Sup. Ct . 1967), a ~d on ot h er gr ou n d s 23 NY.2d
341, 296 N.Y.S.2d 771 (1968). The common law concept of fair use wasdevelopedover manyyear s byt hecour t soft he Unit ed St at es.
See, for inst ance, Folsom v. Ma r sh , 9 F.Cas. 342 (N. 4901) (C.C.D. Mass. 1841) :Ma t h ez a s Con u .eyor Co. v. Pa l m er -Bee Co., 135 F.2d 73
(6t h Cir . 1943).
23* HaWr & Row, &blishem, Inc. v. Nat ion Ent eWmses, 47 ~ U.S. 539 ( ~985); Iowa St at e Univer sit y Resea m h Fou n d a t i on , I n c. V.
Am er i ca n Bm a d ca s t i n g Co., 621 F.2d 57 (2d Cir . 1980).
Chapter 3Legal As pects of Copy right and Home Copy ing q 6 9
claim t hat t he applicat ion is pr emat ur e be-
cause wit hout a clear delineat ion or mandat e
of r ight s over pr ivat e uses, it is uncer t ain as t o
whet her a ny infr ingement ha d ever oc-
cur r ed.
24
The judicial int er pr et at ions of t he
fair -use doct r ine discussed below have a sit u-
at ion in which t her e exist concur r ent ly t he
st at ut or y concept of fair use t he law and
t he judicially cr eat d or case-law der iva-
t ives of fair use, such as t he concept of home
use.
))
In codifying t he fair -use except ion in t he
Copyr ight Act of 1976, Congr ess did not for -
mulat e a specific t est for det er mining whet her
a par t icular use was t o be const r ued as a fair
use. Rat her , Congr ess cr eat ed st at ut or y r ecog-
nit ion of a list of fact or s t hat cour t s should
consider in making t heir fair -use det er mina-
t ions. The four fact or s set out in t he st at ut e
ar e:
1.
2.
3.
4.
t he pur pose and char act er of t he use, in-
cluding whet her such use is of a commer -
cial nat ur e or is for nonpr ofit educa-
t ional pur poses;
t he nat ur e of t he copyr ight ed wor k;
t he amount and subst ant ialit y of t he
por t ion used in r elat ion t o t he copy-
r ight ed wor k as a whole;
t he effect of t he use on t he pot ent ial mar -
ket and value of t he copyr ight ed wor k
(17 U. S. C., Sec. 107 (1982)).
Congr ess r ealized t hat t hese fact or s wer e in
no ca se definit ive or det er mina t ive
)
b u t
r at her pr ovided some guage [sic] for balanc-
ing equit ies.
25
It appear s t hat Congr ess de-
veloped a flexible set of cr it er ia for analyzing
t he cir cumst ances sur r ounding each fair -
use case, and t hat each case would be judi-
cially analyzed on an ad hoc basis.
26
Ther e-
for e, cou r t s s eem t o h a ve con s ider a ble
lat it ude in applying and evaluat ing fair -use
fact or s.
Cour t s have given differ ent weight and in-
t er pr et at ion t o t he fair -use fact or s in differ ent
judicial det er minat ions. The following illus-
t r at ions demonst r at e how some cour t s have
int er pr et ed cer t ain fair -use fact or s. In evalu-
at ing t he fir st fact or , t he pur pose and char ac-
t er of t he use, cour t s have not always held t hat
use of a commer cial nat ur e negat es a fair -
use finding,
27
nor does a nonpr ofit educa-
t ional pur pose mandat e a finding of fair
use.
28
A defense of fair use on t he basis of t he
fir st cr it er ion will mor e oft en be r ecognized,
however , when a defendant uses t he wor k for
educa t iona l, scient ific, or hist or ica l pur -
poses.
29
Consider at ion of t he second fact or ,
t he nat ur e of t he copyr ight ed wor k, must be
based on t he fact s and cir cumst ances of each
par t icular case. For inst ance, cour t s have in-
t er pr et ed t he scope of t he fair -use doct r ine
nar r owly for unpublished wor ks held confi-
dent ial by t heir aut hor s.
30
In examining t he
t hir d fact or , t he amount and subst ant ialit y of
t he por t ion of t he wor k used, cour t s have
looked at bot h t he quant it at ive aspect how
24E]~r ~n1c Indust r ies &s~iat ion (EIA), let t er t o D. Weimer , c/o OTA, Apr . 28, 1989. The EIA asser t s t hat t her e is a sbt ut or y
exempt ion for home t aping under t he Copyr ight Act and t hat t he legalit y of home t aping does not depend on t he fair -use doct r ine.
25H.R. Wp. No. 1476, 94t h Cong., 2d sess. 65 (1976).
26=: EM, op. ~it ., f~t not e 24. Th
e
Em ~]ieves t hat t he efist ingd~t r ine of fair use is suficient t o adapt t o exist ing ~d emer ging
r ecor ding t echnologies and is adeyuat e t o addr ess t he home t aping issue.
NHaPr & ROU, ~bli~hem, Inc. V. Nat i on Ent er pr i ses, 471 U.S. 539,593 ( 1985) (Br ennan, J ., dissent ing); consumer s union Of U. S.,
I n c. v. Gen em l S i gn a l COP., 724 F.2d 1044 (2d Cir . 1983).
2t 3Mamu~ v C
r e
w@, 695 F.2d 1171 Wt h Cir . 1983).
2% I t a l i a n Book Cor p. v. Am er i ca n B r oa .a k st i n g Cos., 458 F. Supp. 65 (S.D. NY. 1978).
30A r ~ent ~a= ~~im]at ing t h
e
f~r u= dWt r ine invo]v~ t he ~r mn~ cor r es~ndence of aut hor J .D. %dinger . The COUt i det er -
mined t hat t he aut hor had a copyr ight int er est in his cor r espondence. S a l i n ger v. Ra n d om Hou se, I n c., 811 F.2d 90 (2d Cir . 1987), cer t .
d en i ed , 108 S. Ct . 213 (1987).
70 . Copy right and Home Copy ing: Technology Challenges t he Law
much of t he wor k is used
31
and t he qualit a-
t ive fact or whet her t he hear t or essence of
t he wor k is used.
32
The fair -use doct r ine is
usually not consider ed t o be applicable when
t he copying is near ly a complet e copy of t he
copyr ight ed wor k, or almost ver bat im.
33
As
will be seen below, however , t he concept of
home use is an except ion t o t his gener al r ule
of fair use. In assessing t he four t h fact or ,
cour t s have examined t he defendant s alleged
conduct t o see whet her it poses a subst ant ially
adver se effect on t he pot ent ial mar ket for or
value of t he plaint iffs pr esent wor k.
34
These
fair -use consider at ions illust r at e t he gr eat
car e cour t s t ake in applying t he fair -use doc-
t r ine on a case-by-case basis.
Anyone who violat es t he exclusive r ight s of
t he copyr ight owner may be consider ed t o be
an infr inger of copyr ight .
35
The copyr ight
st at ut es pr ovide t hat t he copyr ight owner
may inst it ut e an act ion for infr ingement
against t he alleged infr inger (17 U. S. C., sec.
501(b)(1982)). A cour t may issue an injunct ion
against t he copyr ight infr inger t o pr event fur -
t her infr ingement of t he copyr ight (17 U. S. C.,
sec. 502 (1982)). An infr inger of a copyr ight
may be subject t o t he payment of act ual dam-
ages and pr ofit s t o t he copyr ight owner (17
U. S. C., sec. 504 (b)(1982)); or in cer t ain cir -
cumst ances t he copyr ight owner may elect t o
r eceive specified st at ut or y damages in lieu of
act ual damages and pr ofit s (17 U. S. C., sec.
504( C)(1982)). In addit ion, t he cour t may per -
mit t he r ecover y of legal fees and r elat ed ex-
penses involved in br inging t he act ion (17
U. S. C., sec. 505 (1982)). Cr iminal sanct ions
may also be imposed for copyr ight infr inge-
ment s in cer t ain cases (17 U. S. C., sec. 506
(1982)).
ANALYSIS OF HOME
RECORDING
Th e S on y Ca se
Amer ican cour t s have been called on t o ex-
amine home r ecor dings wit hin t he cont ext of
videocasset t e r ecor der s (VCRs). The home use
of VCRs under cer t ain cir cumst ances was
car efully analyzed, and aft er a ser ies of con-
flict ing lower cour t judgment s, was appr oved
by t he U.S. Supr eme Cour t .
36
In t he Supr eme
Cour t act ion, Univer sal Cit y St udios (t he
plaint iffs/r espondent s) did not seek r elief
against t he act ual user s of t he VCRs; inst ead,
Univer sal sued t he VCR manufact ur er s and
supplier s, pr imar ily, Sony, on t he basis of con-
t r ibut or y infr ingement .
37
This t heor y was
based on t he ar gument t hat t he dist r ibut ion
and sale of VCRs encour aged and cont r ibut ed
t o t he infr ingement of t he plaint iffs copy-
r ight ed wor ks.
38
Univer sal sought monet ar y
damages and also an injunct ion t hat would
pr ohibit Sony fr om manufact ur ing VCRs in
slcon~umer s Union of U.S., Inc. V. General S i gn a l C0~., 724 F.2d 1044 (2d Cir . 1983).
sZMUt one. Gmham V. Bu r t ch a el l , 80S F.2d 1263 (2d Cir . 1986).
sswalt ~~nq ~uc~ons v. Air ~~t es, 581 F,M 751 (9t h Cir . 1978), cer t . denied 439 U.S. 1132 ( 1978).
34Th i ~ fact or ~a~ f ~on~ider ab]e impo~ce in t he S on y ca ses d i scu ssed &j ]ow. ~, ~S O, con su m er s u 71ZO?l Of U. S ., Zn (.. V. (k Tl e?d
S i gn a l Cor p., 724 F.2d 1044 (2d Cir . 1983).
M 17 USC. 501(a)( 1982). For a Comp]et e discussion of t he r emedies for copyr ight infr ingement , SW: Henn, op. cit ., fOOt nOt e 1, pp.
245-267.
seunivema~ Ciw S~dLos, ~nc. v. Sony COW. of ~er l m , 480 J?.supp. 429 (D.c. cd. 1979), r evd, &59 F,2d 963 (9t h Cir . 1981), r evd,
464 Us. 417 ( 1984).
37sony Cow. v. Unluema/ Czv StudLos, ~nc, 464 U.S. 417 ( 1984). In the district COUrt adion, Universtd had ako sought r e]iefagainst
an act ual VCR user .
38~i d ., ~p, J 20-A21, 434. ~I t i s, h owever , t h e ~plngof r espondent s own copyrighted programs t hat pr ovides t hem wit h t he st ~d-
ing t o char ge Sony wit h cont r ibut or y infr ingement . To pr evail, t hey have t he bur den of pr oving t hat user s of t he Bet amax have in-
fr inged t heir copyr ight s and t hat Sony should be held r esponsible for t hat infr ingement .
t he fut ur e. This act ion was of gr eat signifi-
cance, as t he Supr eme Cour t had not pr evi-
ously int er pr et ed t he issue of fair use wit hin
t he cont ext of home t aping/r ecor ding. The
Cour t det er mined t hat t he key issue t o be r e-
solved was whet her t he sale of Sonys equip-
ment t o t he public violat ed any of t he r ight s
given t o Univer sal by t he Copyr ight Act .
39
Fir st , t he Cour t consider ed t he exact nat ur e
of t he r elat ionship bet ween Sony and it s pur -
chaser s. The Cour t det er mined t hat if vicar i-
ous liabilit y was t o be imposed on Sony, such
liabilit y had t o be basal on t he const r uct ive
knowledge t hat Sonys cust omer s might use
t he equipment t o make unaut hor ized copies
of copyr ight ed mat er ial. The Cour t obser ved
t hat t her e exist s no pr ecedent in copyr ight law
for t he at t r ibut ion of liabilit y on t he basis of
such a t heor y.@Ther efor e, it was ar gued t hat
t he sale of such copying equipment is not
deemed t o be cont r ibut or y infr ingement if t he
pr oduct is capable of ot her uses t hat ar e non-
infr inging. To r espond t o t his issue, t he Cour t
deliber at ed whet her t he VCR was able t o be
used for commer cially significant noninfr ing-
ing uses. The Cour t concluded t hat t he VCR
was capable of such noninfr inging uses
t hr ough pr ivat e noncommer cial t ime-shift ing
act ivit ies in t he home. In r eaching t his det er -
minat ion, t he Cour t r elied heavily on t he find-
ings of t he dist r ict cour t and r eject ed t he con-
clusions of t he cour t of appeals. The Cour t s
conclusions wer e based on t he idea t hat Uni-
ver sal cannot pr event ot her copyr ight holder s
fr om aut hor izing t he t aping of t heir pr ogr ams
and on t he finding of fact by t he dist r ict cour t
t hat t he unaut hor ized home t ime-shift ing of
t he r espondent s pr ogr ams was a legit imat e
fair use.
41
When br inging an act ion for con-
t r ibut or y infr ingement against t he seller of
copying equipment , t he copyr ight holder can-
not succeed unless t he r elief affect s only t he
holder s pr ogr ams, or unless t he copyr ight
holder speaks for vir t ually all copyr ight hold-
er s wit h an int er est in t he out come.
42
Th e
Cour t det er mined t hat t he copyr ight holder s
would not pr evail, since t he r equest ed r elief
would affect ot her copyr ight holder s who did
not object t o home t ime-shift ing r ecor ding.
43
Aft er examining t he unaut hor ized t ime-
shift ing use of VCRs, t he Cour t det er mined
t hat such use was not necessar ily infr inging.
44
On t he basis of t he dist r ict cour t s conclu-
sions, t he Cour t det er mined t hat t he pot ent ial
har m fr om t ime-shift ing was speculat ive and
uncer t ain. The Supr eme Cour t ar r ived at t wo
conclusions. Sony demonst r at ed t hat var ious
copyr ight holder s who license t heir wor ks for
br oadcast on commer cial t elevision would not
object t o having t heir pr ogr ams t ime-shift ed
by pr ivat e viewer s. Also, Univer sal did not
pr ove t hat t ime-shift ing would cause t he like-
lihood of nonminimal har m t o t he pot ent ial
mar ket for or t he value of t heir copyr ight ed
wor ks.
45
Ther efor e, home use of VCRs could
involve subst ant ial noninfr inging act ivit ies,
and t he sale of VCR equipment t o t he public
did not r epr esent a cont r ibut or y infr ingement
of Univer sals copyr ight s. The scope of t he
Cour t s holding was expr essly limit ed t o video
r ecor ding in t he home, t o over -t he-air non-
commer cial br oadcast ing, and t o r ecor ding
3gIbid., p. 423.
401bid., p. 439.
4Ibid., p. 442.
421bid., p. 466.
431bid.
Ibid., p. 446.
451bid., p. 456.
for t imeshift ing pur poses. The holding did
not addr ess t he t aping of cable or pay t elevi-
sion or t he issue of libr ar y building of r e-
cor ded pr ogr ams. In r eaching it s det er mina-
t ions, t he Cour t r eject ed t he cent r al finding of
t he cour t of appeals t hat r equir ed t hat a fair
use had t o be pr oduct ive.
)46
Ra t h er , t h e
Cour t det er mined t hat under cer t ain cir cum-
st ances, t he t aping of a video wor k in it s en-
t ir et y for t ime-shift ing pur poses would be all-
owa ble u n der t h e fa ir -u s e doct r in e.
47
I t
should be consider ed t hat t hese findings ar e
case-law or judicially made law and not
st at ut or y law.
Relying subst ant ially on t he findings of t he
cour t of appeals, t he dissent ing opinion as-
ser t ed t hat t her e was pot ent ial har m t o Uni-
ver sal t hr ough t he use of home video r ecor d-
ing.
48
Hence, t he dissent concluded t hat t her e
was no except ion for home video r ecor ding
under t he fair use doct r ine of cur r ent copy-
r ight law scheme.
49
Despit e t heir differ ing views, bot h t he ma-
jor it y and t he dissent infer r ed t hat Congr ess
may wish t o examine t he home video r ecor d-
ing issue.
50
As t he major it y opinion st at ed:
It may well be t hat Congr ess will t ake a
fr esh look at t his new t echnology, just as it so
oft en has examined ot her innovat ions in t he
past . But it is not our job t o apply laws t hat
have not yet been wr it t en.
51
Hom e Use of R ecor d i n g Equ i pm en t
Alt hough t he Supr eme Cour t and ot her
cour t s have pr ovided some guidance for int er -
pr et ing copy-r ight law in home r ecor ding/t ap-
ing sit uat ions, many quest ions and issues r e-
main unr esolved. It should be consider ed t hat
t he pr eviously discussed S ony case was a nar -
r ow holding, st r ict ly limit ed t o a ver y specific
sit uat ion home video r ecor ding of noncom-
mer cial or nonpay t elevision for t ime-shift -
ing. The pr act ical applicat ion of cur r ent copy-
r ight law and r elat ed judicial int er pr et at ions
ar e her e consider ed wit hin t he cont ext of cer -
t ain t ypical home r ecor ding and viewing sit u-
a t ions.
Photo Credit: Office of Technology Assessment
Some consumer s have used VCRs t o cr eat e lar ge home
video libr ar ies.
ce~id., pp. 454-455.
4T~id., pp. 449-450.
ca~id., pp. 482-486.
49~1d ., p. 475. Th
e
d=ision i
n
t he case was a 5-4 vote (mqjor it y: St evens, Bur ger , Br ennan, Whit e, ~d OConnor ; dissent : Black-
mun, Mar shall, Powell, and Rehnquist ).
50~1d., p. 456 (majority), p. 500 (dissenting). The RI&4 t akes t he posit ion t hat t he COUr t eXpr eSs]y suggest ed t hat ConFTess
examine t he home video r mr ding issue. (H. Rosen, op. cit ., foot not e 10. )
I bid., p. 456.
A pr imar y consider at ion in copyr ight law as
it applies t o t he judicially cr eat ed concept of
home use of r ecor ding equipment is det er -
mining what const it ut es a home. Alt hough
cur r ent copyr ight law and r egulat ions do not
specifically define what const it ut es a home,
cer t ain infer ences can be dr awn fr om t he
st at ut or y definit ion pr ovided for t he public
per for mance of a wor k:
To per for m or display a wor k publicly
means
(1) t o per for m or display it at a place open t o
t he public or at any place wher e a subst ant ial
number of per sons out side a nor mal cir cle of a
family or it s social acquaint ances is gat h-
er ed.
52
An infer ence can be dr awn fr om t he language
t hat t he opposit e of a public display of a
wor k might be a home, or a pr ivat e display
of t he wor k. In consider ing t his pr oposit ion, it
could be infer r ed t hat a home would signify a
place not open t o t he public and/or a place
wher e only a family and/or it s social acquain-
t ances ar e gat her ed.
A r eview of t he legislat ive hist or y pur suant
t o t he passage of copyr ight legislat ion gives
some insight int o t he congr essional int ent
concer ning t he concept of a home. The accom-
panying legislat ive hist or y of t he Sound Re-
cor ding Amendment of 1971 appear s t o indi-
cat e t hat Congr ess meant t he t er m "home t o
include only t he t r adit ional, gener ally con-
ceived concept of an individuals own home. A
st at ement in t he 1971 House Repor t on audio
r ecor ding pr ovides some insight int o t he
meaning of home r ecor ding wher e home r e-
cor ding is for pr ivat e use and wit h no pur pose
of r epr oducing or ot her wise capit alizing com-
mer cially on it .
53
The legislat ive hist or y of
t he 1976 copyr ight r evision discussed t he con-
cept of public per for mance and pr ovides
some guidance for t he concept of home use.
One of t he pr incipal pur poses of t he defini-
t ion [public per for mance] was t o make clear
t hat ,... per for mances in semipublic places
such as clubs, lodges, fact or ies, summer
camps, and schools ar e public per for mances
subject t o copyr ight cont r ol. The t er m a fam-
ily in t his cont ext would include an individ-
ual living alone, so t hat a gat her ing confined
t o t he individuals social acquaint ances would
nor mally be r egar ded as pr ivat e. Rout ine
meet ings of businesses and gover nment al per -
sonnel would be excluded because t hey do not
r epr esent t he gat her ing of a subst ant ial
number of per sons.-
It t her efor e appear s fr om t he legislat ive his-
t or y of bot h t he 1971 and 1976 copyr ight laws
t hat t he concept of a home is limit ed t o t he
t r adit ional meaning of t he t er m and t hat cer -
t ain ot her semi-public sit uat ions ar e t o be
consider ed as public places for t he pur poses
of copyr ight law.
55
The dist r ict cour t in t he S ony case exam-
ined t he concept of home use and it s limit s:
Home-use r ecor ding as used in t his opin-
ion is t he oper at ion of t he Bet amax in a pr i-
vat e home t o r ecor d a pr ogr am for subsequent
home viewing. The pr ogr ams involved in t his
lawsuit ar e br oadcast fr ee t o t he public over
public air waves... t he cour t s declar at ion of
non-infr ingement is limit ed t o t his home-use
sit uat ion.
It is impor t ant t o not e t he limit s of t his
holding. Neit her pay or cable t elevision st a-
t ions ar e plaint iffs in t his suit and no defen-
dant r ecor ded t he signals fr om eit her . The
cour t is not r uling on t ape duplicat ion wit hin
5217 USC 101 ( 1982).
xiu,s ConWe~~, Hou= Commit t W on t h
e
J u(~lclW, sound Rem~zngs, Repr ~ Acmmpanying S.646, ser ial No. 92-487, Sept ember
1971.
MU s conme~s, HOUW Commit t = on t h
e
J t ldiciW, RePr t t . Acmmpny 5.22, ser i~ No. 94.-1476, Sept em&r 1976. (This WaS t he
,.
congr essional r epor t accompanying t he last major copyr ight r evision. )
55Me]~]]e Nimmer, {copyright Liability for Audio Home ~or~ing: Dispelling the ~tam~ Myth, Vir&nia bW Reu i ew, VO]. 68,
1982, pp. 1505, 1518-1520.
74 q Copyr i gh t and Home Copy ing: Technology Challenges the La w
t he home or out side, by individuals, gr oups, or
cor por at ions. Nor is t he cour t r uling on t he
off-t he-air r ecor ding for use out side t he home,
e.g., by t eacher s for classr ooms, cor por at ions
for employees, et c. No defendant engaged in
any of t hese act ivit ies and t he fact s necessar y
t o det er mine t heir legalit y ar e not befor e t his
cour t .
56
The cour t of appeals and t he Supr eme Cour t
did not cont r adict t he dist r ict cour t s concept
of a home or t he fact ual cir cumst ances in-
volved wit h t he home t aping in t he S ony case.
It seems cer t ain t hat t he Sony decisions envi-
sioned a home as a pr ivat e home. Not all r e-
cor dings made in a home would necessar ily fit
wit h t he home-use exempt ion, however .
57
Since t he S ony decision, cour t s have exam-
ined var ious concept s of home r ecor ding. A se-
r ies of cases has examined public per for mance
and home use wit hin t he cont ext of VCR view-
ing. This line of cases has held t hat t he viewing
of copyr ight ed videoca sset t es in pr iva t e
r ooms at video st or es const it ut es public per -
for ma nce,
58
even when member s of a single
family viewed a casset t e in a pr ivat e r oom at
t he st or e.
59
These cases illust r at e t hat Amer i-
can cour t s ar e ver y car eful in cat egor izing
var ious sit uat ions as a home for t he pur -
poses of copyr ight law. Ruling t hat t hese view-
ings wer e public per for mances, t he cour t s
held t hat t hey wer e subject t o t he pr ovisions
of copyr ight law.
60
Two r ecent cases br ought new judicial scr u-
t iny t o t he home use concept . In one case, a
condominium associat ion held weekly dances
in it s clubhouse, which was owned by all of
t he condominium owner s. The associat ion
char ged a small admission t o cover t he cost of
t he musicians. Repr esent at ives of t he owner s
of t he copyr ight ed music t hat was played at
t he dances br ought an infr ingement act ion
against t he associat ion and won.
61
The impor -
t ance of t his case is t hat t he dist r ict cour t r ec-
ognized and discussed a family except ion)
62
fr om copyr ight liabilit y t hat t he cour t der ived
fr om t he public per for mance definit ion of
sect ion 101 of t he 1976 Copyr ight Act . The
cour t det er mined t hat t he condominiums
sit uat ion did not fall wit hin t his so-called
family except ion, and gave judicial r ecogni-
t ion t o a family except ion under sect ion
101. In a 1986 decision, a dist r ict cour t held
t hat a pr ivat e club did not fit wit hin t he con-
cept of a home and hence copyr ight ed mat er i-
als per for med or viewed t her e wer e subject t o
t he copyr ight laws.
63
While t hese cases did not
involve home audio or video r ecor ding or
viewing, t hey do illust r at e t he limit ed concept
of a home as int er pr et ed by t he cour t s and
t he r ecent ly ar t iculat ed family except ion
doct r ine of copyr ight law. The cour t s have
been spar ing in t he applicat ion of home use
t o sit uat ions ot her t han t he t r adit ional home
set t ing.
Applying copyr ight law and t he r elevant ju-
dicial guidance can lead t o var ious conclu-
sions about home r ecor ding in par t icular cir -
cumst ances. The S ony case affir med t he use of
VCRs t o r ecor d and r eplay commer cially t ele-
vised pr ogr ams for per sonal use. The concept
594/3(3 FSUPP. 429, 442 (D.C. Cal. 1979), r eu d , 659 F.2d ~ (~h Cir . 1981).
57A VCR ~ou]d & ~~ i
n
~ home t . m~e copies of a copyr ight ~ ~pe, hence infr inging on t he copyr ight owner s r ight s.
Tol u m bi a l %ct u r es I n d u s. v. R ed d Hom e I n c., 568 F. Supp. 494 (W.D. Pa. 1983), a ~d ., 794 F.2d 154 (3r d Cir . 1984).
59co/u mbl a ~c~m s z n d u st ~s, ~n c, v. Au em ) Zn c,, f j l z F. S u pp. 315, 319 (N. D. Pa. 1985), afld., 800 F.2d 59 (3r d Cir . 1986).
60~t h ou gh t h ese ca =~ wer e fact u~]y differ ent fr om t he Sony ca~s, t he
y
i]]ust r at e t he r eluct ance of COUrtS tO US(2 t he COllCf2pt Of
home use in sit uat ions t hat do not fall vvit hin t he t r adit ional concept of t he home.
e~Hint on v. Main/an& of Ta m a m c, 611 F. SUpp. 494 (S.D. Fla. 1985).
sz~id., pp. 495-496.
63AchEY i%fusic, Inc. v. W i l l i a m s , 6 5 0 F.Supp 6 5 3 (D.lGM. 1~).
of VCR r ecor ding for t ime-shift ing pur poses
appear s t o be judicially accept able. The S ony
case did not , however , addr ess audiot aping, or
home t aping of cable or pay t elevision.
THE INTELLECTUAL
PROPERTY SYSTEM AND
HOME COPYING
Con cept of I n t el l ect u a l Pr oper t y
Int ellect ual pr oper t y is a unique concept ion
of an inher ent and int angible pr oper t y r ight in
an ar t ist ic, scient ific, or int ellect ual wor k.
Somet imes char act er ized as a bundle of
r ight s, int ellect ual pr oper t y r ight s inher e in
a par t icular cr eat ion.
64
The int ellect ual pr op-
er t y concept is a unique r epr esent at ion or em-
bodiment of expr ession which is invest ed in an
ar t ist ic, scient ific, or int ellect ual wor k. This
cont r ast s wit h t he concept of per sonal pr op-
er t y, which gover ns t he owner ship of t he ac-
t ual wor ks t hemselves. Applying t hese pr op-
er t y concept s t o pa r t icula r exa mples is
inst r uct ive t o dist inguish bet ween t hem. An
example of per sonal pr oper t y would be a spe-
cific phonor ecor d wit h a par t icular musical
composit ion r ecor ded on it . Th u s , t h e
phonor ecor d is per sonal pr oper t yt he me-
dium in which t he int ellect ual pr oper t y is im-
bedded-while t he musical composit ion/ ar -
r angement /inst r ument alit y t hat is embodied
in all phonor ecor ds wit h t his par t icular musi-
cal composit ion r ecor ded on it r epr esent s t he
int ellect ual pr oper t y. Ther efor e, t he individ-
ua l phonor ecor d r epr esent s t he per sona l
pr oper t y r ight , but t he ar t ist r y, t he ar r ange-
ment , and t he musical composit ion t hat in-
her e in t his r ecor ding r epr esent t he int ellec-
t ual pr oper t y r ight . Thus, t he concept of an
int ellect ual pr oper t y r ight involves t he r ight
t o cr eat e wor ks in par t icular char act er iza-
t ions.
65
S t a t u t or y Con cept of I n t el l ect u a l
Pr op er t y
The 1976 Copyr ight Act embr aces t he con-
cept of t he exist ence of int ellect ual r ight s t hat
ar e separ at e fr om t he physical owner ship
r ight s in t he copyr ight ed wor ks:
Sec. 202. Owner ship of copyr ight as dist inct
fr om owner ship of mat er ial object
Owner ship of a copyr ight , or of any of t he
exclusive r ight s under a copyr ight , is dist inct
fr om owner ship of any mat er ial object in
which t he wor k is embodied. Tr ansfer of own-
er ship of any mat er ial object , including t he
copy or phonorecord in w hich the w ork is firs t
freed, d oes not of it self convey any r ight s in t he
copyr ight ed wor k embodied in t he object ; nor ,
in t he absence of any agr eement , does t r ans-
fer of owner ship of a copyr ight or of any exclu-
sive r ight s under a copyr ight convey pr oper t y
r ight s in any mat er ial object . (emphasis
added)
66
The House Repor t a ccompa nying it s ena ct -
ment analyzes t his concept :
The pr inciple r est at ed in sect ion 202 is a
fundament al and impor t ant one: t hat copy-
r ight owner ship and owner ship of a mat er ial
in which t he copyr ight ed wor k is embodied
ar e ent ir ely separ at e t hings. Thus t r ansfer of
a mat er ial object does not of it self car r y any
r ight s under t he copyr ight , and t his includes
t r ansfer of t he copy or phonor ecor d t he
64U.S. c~ngress, ser ial No. 94-1476, op. cit ., fOOt nOt e 5A, P. 12A.
IMFor t h
e
pur ~~es of t his r ep~, t he di=ssion of int e]]~u~ pr opefiy r ight s w-i]] & ]imit ed t o only t hose r ight s t hat specificd]y
involve Amer ican copyr ight law. Int ellect ual pr oper t y r ight s may also involve pat ent s, for example.
6517 U.S.C. 202 ( 1982).
76 . copy right and Home Copy ing: Technology Challenges the Law
or iginal manuscr ipt , t he phot ogr aphic nega-
t ive, t he unique paint ing or st at ue, t he mast er
t ape r ecor ding, et c. in which t he wor k was
fir st fixed. Conver sely, t r ansfer of a copyr ight
does not necessar ily r equir e t he conveyance of
any mat er ial object .
67
Amer ican cour t s have examined and upheld
t his concept of int ellect ual pr oper t y r ecogni-
t ion.
68
The development of a pr ocess enabling t he
elect r onic t r ansfer of var ious cr eat ive wor ks
has r aised t he quest ion as t o whet her an ac-
t ual physical embodiment of t he wor k must
exist t o apply t he concept of int ellect ual pr op-
er t y. A car eful r eading of t he ent ir e copyr ight
st at ut e and an examinat ion of t he legislat ive
hist or y indicat e t hat t her e need not be an ac-
t ual physical copy or embodiment of t he copy-
r ight ed wor k for t he concept of int ellect ual
pr oper t y t o inher e in t he wor k. The copyr ight
st at ut e uses t he concept s of bot h phono-
r ecor d
69
and of a wor k being fixed.
70
In ad-
dit ion t o t hese concept s, it appear s fr om t he
st at ut or y dir ect ives t hat wor ks t hat may be
elect r onically or ot her wise t r ansmit t ed would
be cover ed by t he st at ut or y pr ovisions gover n-
ing int ellect ual pr oper t y. The legislat ive his-
t or y of t he 1976 Copyr ight Law Revision r ein-
for ces t his belief. As t he House Repor t
language st at ed:
Under t he bill, it makes no differ ence what
t he for m, manner or medium of fixat ion may
bewhet her it is in wor ds, number s, not es,
sounds, pict ur es, or any ot her gr aphic or sym-
bolic indicia, whet her embodied in a physical
object in wr it t en, pr int ed, phot ogr aphic,
sculpt ur al, punched, magnet ic, or a n y ot her
st able for m, and whet her it is capable of per-
ception directly or by means of any machine or
device now k now n or later deueloped. [empha-
sis added]
71
Ther efor e, t he concept of int ellect ual pr op-
er t y cover s elect r onic t r ansfer or t r ansmission
of a wor k, so long as t he wor k is fixed, even if
t he wor k is not in a physical for m.
R ecen t Tech n ol ogi ca l Devel opm en t s
Recent ly, gr eat int er est has been gi ven t o
t he int ellect ual pr oper t y r ight s in audio and
visual wor ks. One r eason for t his incr eased in-
t er est has been t he t echnological r evolut ion
t hat has occur r ed since t he last major r evision
of Amer ican copyr ight law in 1976. Since t his
r evision went int o effect in 1978, t her e have
been major t echnological advances t hat allow
easy and effect ive copying of many copy-
r ight ed wor ks. While t he 1984 S ony case ex-
e~.s. Congess, ser i~ No. 1476, op. cit ., foot not e 54, P. 124.
M*, for inst mce) ~iha COW. V. Ci~ of Ka n sa s Ci ~, Mo., 582 F. Supp. 343 (D.C. Mo. 1983). In t his act ion, t he COUr t examined
whet her a company, in t r ansfer r ing cer t ain document s t o a municipal cor por at ion, had also t r ansfer r ed it s act ual int ellect ual pr op-
er t y copyr ight in t hese it ems. The cour t det er mined t hat in following t he copyr ight st at ut e, t he copyr ight of t he object s was indeed
dist inct fr om t he act ual owner ship or possession of t he object .
89The ~pvight s~t ut e defines phonor ecor d as follows:
Phonor ecor ds ar e mat er ial object s in which sounds, ot her t han t hose accompanying mot ion pict ur e or ot her audiovisual wor k,
ar e fr ied by any met hod now known or lat er developed, and fr om which t he sounds can be per ceived, r epr oducd, or ot her wise com-
municat ed, eit her dir ect ly or wit h t he aid ofa machine or device. The t er m phonor ecor ds includes t he mat er ial object in which t he
sounds ar e fir st fr eed. (17 U. S. C., sec. 101 (1982)).
mThe ~pyight s~t ut e defines a wor k as being fued under t he fOl]Owing CircumsbCeS:
A wor k is fixed in a t angible medium of expr ession when it s embodiment in a copy or phonor ecor d, by or under t he aut hor it y of
t he aut hor , is sufficient ly per manent or st able t o per mit it t o be per ceived, r epr oduced, or ot her wise communicat ed for a per iod of
mor e t han t r ansit or y dur at ion. A wor k consist ing of sounds, images, or bot h, t hat ar e being t r ansmit t ed, is fixed for pur poses of
t his t it le if a f~t ion of t he wor k is being made simult aneously wit h it s t r ansmission. (17 U. S. C., sec. 101 (1982)).
71u.s. ConWess) Ser ial No. 94-1476, op. cit ., foot not e 54, P. 52.
amined a limit ed aspect of home video r ecor d-
i n g u s e for t i me-s h i ft i n g pu r pos es , ma jor
t echnologica l a nd ma r ket cha nges ha ve oc-
cur r ed since t his last judicial det er minat ion.
Among t hese ar e t he advent of compact disc
pla yer s a nd digit a l a udiot a pe (DAT).
72
Ot h er
changes include gr owt h in t he home video cas-
s et t e i n du s t r y
73
a n d pr odu ct i mpr ovemen t
and declining pr ices for audio and video r e-
cor di n g equ i pmen t . Wh i l e t h es e devel op-
ment s may be t r uly consider ed advances for
ma nkind a nd int ellect ua l development , t hey
r a ise a myr ia d of copyr ight quest ions t ha t
wer e not dir ect ly addr essed in eit her t he 1976
r evision of t he copyr ight law or in t he 1984
S ony case.
74
Alt hough clear ly t her e is a st at ut or y r ecog-
nit ion of fair use of copyr ight ed wor ks, and
t he cour t s have cr eat ed a limit ed concept of
home use for cer t ain home videocasset t e r e-
cor der use, t he impact of effect ive and r ela-
t ively inexpensive sophist ica t ed visua l a nd
audio r ecor ding equipment has not been legis-
lat ively or judicially analyzed in dept h. As has
been illust r a t ed in t he nea r ly 200 yea r s of
Amer ica n copyr ight la w, however , Congr ess
has at t empt ed t o r espond legislat ively t o t ech-
nological advances t hat have alt er ed t he bal-
ance of t he t r adit ionally compet ing fact or s in
copyr ight : t he pr oper t y r ight s of t he copy-
r ight holder and t he st imulat ion of t he pub-
lics knowledge. This congr essiona l r espon-
s i ven es s wa s di s cu s s ed a t l en gt h i n t h e
legislat ive hist or y sur r ounding t he enact ment
of t he 1976 copyr ight r evision:
The hist or y of copyr ight law has been one of
gr adual expansion in t he t ypes of wor ks ac-
cor ded pr ot ect ion, and t he subject mat t er af-
fect ed by t his expansion has fallen int o t wo
gener al cat egor ies. In t he fir st , scient ific dis-
cover ies and t echnological development s have
made possible new for ms of cr eat ive expr es-
sion t hat never exist ed befor e. In some of
t hese cases t he new expr ession for ms-elec-
t r onic music, filmst r ips, and comput er pr o-
gr ams, for example-could be r egar ded as an
ext ension of copyr ight able subject mat t er
Congr ess had alr eady int ended t o pr ot ect , and
wer e t hus consider ed copyr ight able fr om t he
out set wit hout t he need of new legislat ion. In
ot her cases, such as phot ogr aphs, sound r e-
cor dings, and mot ion pict ur es, st at ut or y en-
act ment was deemed necessar y t o give t hem
full r ecognit ion as copyr ight able wor ks.
75
The House Commit t ee on t he J udicia r y em-
phasized t hat t he 1976 r evision was not inflex-
ible and would it self pr obably be r evised, and
t hat t he Commit t ee did not int end t o fr eeze
t he scope of copyr ight a ble t echnology.
76
Th e
Commit t ee also alluded t o ot her ar eas of ex-
ist ing subject ma t t er t ha t t his bill does not
pr opose t o pr ot ect but t hat fut ur e Congr esses
ma y wa nt t o.
77
This t r adit ion and pr act ice of Congr ess r e-
sponding t o t echnologica l cha nges ha s been
r ecognized by t he Supr eme Cour t in it s deci-
sion in t he S ony case:
72%: ~n ~d K J ur ~n, consumer Elect r onics,
in Technolo~ SS, I EEE S pect r u m , J anuar y 19S8, p. 56.
Ta~id,, pp. 112-114.
Tq&me of t he= ]e@~d ~]iw ~est ions inc]ude: What ar e t he pr ecise legal boundar ies of t he judicial t heor y of home use?
When does r ecor ding done in t he home not const it ut e home use? What , if any, enfor cement mechanism scou]d be used t o pr ot ect
copyr ight holder s r ight s? Anot her r at her fundament al quest ion is whet her t he development of digit al r ecor ding which pr oduces
ver y high qualit
y
copies r epr esent s a quant um leap in r ecor ding t echnology and t her efor e indicat es t he desir abilit y of a major
r evision in t he Amer ican syst em of copyr ight law. Does t he digit al r epr esent at ion ofa musical or image/pict or ial composit ion r epr e-
sent a fundament al t echnological change t o which t he Amer ican copyr ight syst em must r espond in a subst ant ive manner ?
T5U.S. ConWess, Ser ial No. 94-1476, op. cit ., foot not e 54, p. 51.
781bid.
771bid., p. 52.
78 . copy right and Home Copy ing: Technology Challenges the Law
Fr om it s beginning, t he law of copyr ight has
developed in r esponse t o si gn i fi ca n t ch a n ges
in t echnology . . . Indeed, it was t he invent ion of
a new for m of copying equipment t he pr int -
ing pr ess t hat gave r ise t o t he or iginal need
for copyr ight pr ot ect ion. . . . Repeat edly, as
new development s have occur r ed in t his coun-
t r y, it has been t he Congr ess t hat has fash-
ioned t he new r ules t hat new t echnology
made necessar y.
78
Ther efor e, it may well be, as t he Supr eme
Cou r t implied in t he Sony decision,
79
t h a t
Congr ess may wish t o examine and act in r e-
s pon s e t o t h e n u mer ou s t ech n ol ogi ca l a d-
vances t hat have occur r ed in t he infor mat ion
r ecor ding a nd dissemina t ion a r ea s. I f Con-
gr ess does choose t o act in t his ar ea, it may
wi s h t o exa mi n e t h e a ppr oa ch es t a ken i n
ot her count r ies.
COMP ARI SON OF THE
AMERICAN INTELLECTUAL
PROPERTY SYSTEM WITH
OTHER INTERNATIONAL
COPYRIGHT SYSTEMS
This sect ion descr ibes and analyzes cer t ain
a spect s of t he int ellect ua l pr oper t y pr ot ec-
t ion/copyr ight syst ems in t he Unit ed St a t es,
Gr eat Br it ain, Canada, and Fr ance t hat r elat e
t o home copying. Alt hough t he Unit ed St at es,
Gr ea t Br it a in, a nd Ca na da sha r e hist or ica l
r oot s in t he development of na t iona l copy-
r ight laws, significant differ ences in t heir in-
t ellect ual pr oper t y syst ems exist . Fr ance, wit h
a t r adit ion of nat ional suppor t and pr ot ect ion
of t he ar t s, t akes yet anot her appr oach t o t he
pr ot ect ion of int ellect ual pr oper t y.
80
T h e Un i t ed S t a t es
As ha s been pr eviously discussed, t he
Amer ican copyr ight law has it s or igins in Eng-
lish common and st at ut or y law. Despit e t hese
colonial Br it ish r oot s, Amer ican copyr ight law
has developed t o suit t he specific needs and
out looks of t he Unit ed St at es. A fundament al
t ension in t he development of Amer ican copy-
r ight la w r ela t es t o t he compet ing concer ns
for t h e own er s h i p/pr oper t y r i gh t s of t h e
aut hor /cr eat or /owner and t he goal of fr ee dis-
s emi n a t i on of i n for ma t i on for t h e pu bl i c
good. Tr adit ionally, t he Unit ed St at es has es-
poused a fr ee ent er pr ise syst em t hat did not
pur sue a nat ional policy t o pr omot e t he ar t s,
a nd Amer ica n copyr ight la w r eflect ed t hese
doct r ines. For inst ance, t her e has never been
s t a t u t or y r ecogn i t i on of a r t i s t s or mor a l
r ight s, and t he st at ut or y embodiment of int el-
lect ual pr oper t y r ight s is a r elat ively r ecent
occu r r en ce. I t does , h owever , a ppea r t h a t
t her e is a gr owing t r end in Amer ican law and
philosophy t o r ecognize cr eat ive r ight s.
While t he basic legal fr amewor k of Amer i-
ca n copyr ight la w ha s been pr eviously dis-
cussed in t his chapt er , consider ing specific as-
pect s of Amer ican copyr ight law will pr ovide
insight int o t he concept s of home copying. In
par t icular , it would be inst r uct ive t o examine
t he fir st -sa le doct r ine a nd r ecent a mend-
ment s t hat have been enact ed concer ning r e-
cor d r ent als. The pr inciple of t he fir st -sale
doct r ine, in pr act ice, upholds t he copy-r ight of
t he copyr ight owner dur ing t he fir st sale or
78464 l_J .S 417, 430-431 ( IW).
g
Ibid., p. 456.
aoone ~on=Wence Of t his dist inct ion is t hat t he Fr ench Gover nment imposes a levy on bot h audio- md videot apes since ~er n~r
1986. In addit ion, ot her count r ies have int r oduced levy schemes. For addit ional discussion of int er nat ional syst ems dealing wit h
per for mance r ight s in sound r ecor dings, see ch. 5.
commer cia l t r a nsa ct ion of t he wor k, but ex-
t i n gu i s h es t h e copyr i gh t own er s r i gh t s i n
subsequent sales or t r ansact ions.
81
The House
Repor t accompanying t he or iginal (1976) leg-
islat ion pr ovided an example of t he applica-
t ion of t he fir st -sale doct r ine.
Thus, for example, t he out r ight sale of an
aut hor ized copy of a book fr ees it fr om any
copyr ight cont r ol over it s r esale pr ice or ot her
condit ions of it s fut ur e disposit ion. A libr ar y
t hat has acquir ed owner ship of a copy is ent i-
t led t o lend it under any condit ions it chooses
t o impose.
82
The fir st -sale doct r ine has been upheld in
r ecent cour t decisions. Thus, when a copy-
r ight ed wor k is subject t o a valid fir st sale, t he
dist r ibut ion r ight s of t he copyr ight holder ar e
ext i n gu i s h ed, a n d t h e t i t l e pa s s es t o t h e
bu yer .
83
Con gr es s en a ct ed a s i gn i fi ca n t s t a t u t or y
modifica t ion t o t he fir st -sa le doct r ine wa s
enact ed in t he r ecor d r ent al amendment s t o
Amer ican copyr ight law in 1984.
84
This legis-
lat ion was designed t o help deal wit h t he sit u-
at ion wher e r ecor d r ent al st or es pur chased r e-
cor d albums t he fir st sale and t hen leased
t he albums for a fee t hat r epr esent ed a small
por t ion of t he pur chase pr ice. The lessee fr e-
quent ly t aped t he r ent ed r ecor d. It was ar gued
t hat t he use of t he r ent al r ecor d may have dis-
placed a pot ent ial sale of t he act ual r ecor d.
85
Congr ess t hus a mended t he fir st -sa le doc-
t r ine:
(b)(l) Not wit hst anding t he pr ovisions of
subsect ion (a), unles s authoriz ed by the ow n-
er s of copyr i gh t i n t h e sou n d r ecor d i n g a n d i n
t h e m u si ca l wor k s em bod i ed t h er ei n , t he
owner of a par t icular phonor ecor d may not ,
for pur poses of dir ect or indir ect commer cial
advant age, dispose of, or aut hor ize t he dis-
posal of, t he possession of t hat phonor ecor d by
r ent al, lease, or lending, or by any ot her act or
pr act ice in t he nat ur e of r ent al, lease, or lend-
ing. Not hing in t he pr eceding sent ence shall
apply t o t he r ent al, lease, or lending of a
phonor ecor d for nonpr ofit pur poses by a non-
pr ofit libr ar y or nonpr ofit educat ional inst it u-
t ion. (emphasis added)
86
The pr act ical effect of t his amendment is t o
pr ohibit t he r ent al of such sound r ecor dings
wit hout t he copyr ight owner s per mission. In
act ual pr act ice t he copyr ight owner s usually
t h e r ecor di n g compa n i es h a ve n ot a u t h or -
i zed r ecor d r en t a l , a n d a s a r es u l t r ecor d
r ent al is not an indust r y in t he Unit ed St at es.
Anot her aspect of home audio r ecor ding oc-
cur s when an individual t apes music br oad-
cast on t he r adio, or r ecor ds fr om t apes or r e-
cor ds for per s on a l u s e i n t h e h ome or for
t i me-s h i ft i n g pu r pos es . Con gr es s i on a l i n -
t ent under lying t he Sound Recor ding Amend-
ment of 1971 was ver y clear ly t o cont inue t o
per mit cer t ain home t aping:
Specifically, it is not t he int ent ion of t he Com-
mit t ee t o r est r ain t he home r ecor ding, fr om
br oadcast s or fr om t apes or r ecor ds, of r e-
cor ded per for mances, wher e t he home r ecor d-
ing is for pr ivat e use and wit h no pur pose of
r epr oducing or ot her wise capit alizing com-
mer cially on it . This pr act ice is common and
unr est r ained t oday, and t he r ecor d pr oducer s
.gl ]7 USC 1~ ( 1982 & SUPP. > 1987~
W% U.S. Conwess, ser ial No. 94-1476, op. cit ., foot not e 54, p. 79.
See, T .B. Ha r m s Co. v. J EM Recor d s, I n c., 655 F. Supp. 1575 (D. C.N.J . 1987); Wa l t Di sn ey %od u ct i on s V. Bmma j i a n , 6XI 0 F. Supp.
439 (D. C.N.Y. 1984). See also: Nimmer , op. cit ., foot not e 2, vol. 1, sec. 8.12 [B].
~4~blic ~w 94-450, S E X . 2, Oct . 4, 1984, 98 St it . 1727.
.95s= 129 ConWssiona/ Rem~, s 9374 ( 1983) (St at ement Of senat or Thur mond).
w 17 U, S, C., SW. 10Wb)( 1) ( 1982 & Supp. V, 1987).
80 q copy right and Home Copy ing: Tech n ol ogy Challenges the Law
a n d p er for mer s wou ld be i n n o d i ffer en t p osi -
t i on fr om t h a t of t h e own er s of cop yr i gh t i n r e-
cor d ed mu si ca l comp osi t i on s over t h e p a st 20
yea r s.
87
Wh i le i t a p p ea r s t h a t Con gr ess i n t en d ed t o a l-
low cer t a i n h ome a u d i ot a p i n g p r a ct i ces i n
1971, t h e con gr essi on a l r ep or t s a ccomp a n y-
i n g t h e 1976 cop yr i gh t r evi si on wer e si len t on
t h i s i ssu e. However , n o r ep or t or st a t u t or y
la n gu a ge n ega t ed t h e p r i n ci p les st a t ed i n
1971.
88
Cu r r en t ly, i t a p p ea r s t h a t t h e 1971 leg-
i sla t i ve h i st or y ma y p r ovi d e evi d en ce of con -
gr essi on a l i n t en t t o p er mi t h ome t a p i n g of
mu s i c f r o m b r o a d c a s t s o r p r e r e c o r d e d
sou r ces. Th i s i ssu e i s n ot p osi t i vely d et er -
mi n ed by st a t u t e or ca se-la w, h owever .
Th e Elect r on i c I n d u st r i es Associ a t i on (EI A)
a d va n ces t h e p osi t i on t h a t la n gu a ge of t h e
1971 a men d men t s clea r ly d en i ed t o cop yr i gh t
own er s t h e r i gh t t o p r even t h ome t a p i n g.
89
Fu r t h er mor e, t h e EI A beli eves t h a t n ot h i n g i n
t h e 1976 a men d men t s t o t h e cop yr i gh t la w n e-
ga t ed t h e p r i n ci p le t h a t h ome t a p i n g fr om
br oa d ca st s or p r er ecor d ed ma t er i a ls wa s n ot
a n i n fr i n gemen t .
90
EI A t a k es t h e p osi t i on t h a t
i n vi ew of t h e clea r Con gr essi on a l i n t en t t o
exemp t h ome t a p i n g fr om a mon g t h e exclu -
si ve r i gh t s gr a n t ed t o cop yr i gh t h old er s, we
su b mi t t h a t i t i s i n a p p r op r i a t e t o con si d er t h e
r i gh t of h ome t a p i n g st r i ct ly a s a ju d i ci a l d e-
r i va t i ve of t h e fa i r -u se d oct r i n e.
91
Th e EI A
su mma r i zed t h ei r op i n i on :
The fair use doct r ine comes int o play only
wher e t he act ivit y ar guably falls wit hin t he
exclusive r ight s accor ded t o t he copyr ight
holder . Beca use home a udio t a ping is
st a t ut or ily exempt fr om t hose exclusive
r ight s, t he fair use issue, while t heor et ically
per t inent , should not or dinar ily be implicat ed
in t he cont ext of home audio t aping.
92
I n a sha r ply cont r a st ing opinion, t he Re-
cor ding Indust r y Associat ion of Amer ica, Inc.,
(RI AA) disr ega r ds t he legisla t ive hist or y of
t he 1971 amendment s. RIAA asser t s t hat t he
legisla t ive hist or y wa s ma de ir r eleva nt b y
t he subsequent over haul of t he copyr ight law
in 1976.
93
RIAA t akes t he appr oach t hat t he
1971 legislat ion was int ended t o pr eser ve t he
st at us quo, pending a full r evision of t he law,
and t hat t he enact ment of t he new copyr ight
law made t he for mer legislat ive hist or y ir r ele-
vant .
The home t aping of r ecor ds or ot her r ecor d-
ings t hat ar e bor r owed fr om a public libr ar y
r a i s es a ddi t i on a l copyr i gh t con s i der a t i on s .
While t he Amer ican copyr ight st at ut e is ver y
explicit on t he r epr oduct ion abilit ies of libr ar -
ies and ar chives,
94
t her e does not appear t o be
specific st a t ut or y la ngua ge dea ling wit h t he
home copying of audio wor ks bor r owed fr om
public libr ar ies.
Anot her a spect of Amer ica n copyr ight la w
t ha t dea ls wit h t he copying of copyr ight ed
mat er ials allows t he copying of comput er pr o-
gr ams for cer t ain pur poses and under specific
8T.S$ Conwess, ~r i~ No. 92~7, op. cit ., foot not e 53, p. 7. The dist r ict cour t in t he S on y decision r elied on t his r at ionale in
upholding t he t aping of br oadcast mat er ial for home use. See, 4S0 F. Supp. 429, 444 (D.C. Cal. 1979).
~This issue was addr essed by t he dist r ict , cour t in t he S on y case. See, 480 F. Supp. 429, 444-445 ( 1979). However , t he Supr eme
Cour t in t he Sony decision did not analyze t his issue.
MEM, op. cit ., fmt not e z4, p. 3. The EIA asser t s t hat sect ion l(f) of t he 1971 Act pr ovided copyr ight holder s t he exclusive right to
r epr oduce and dist r ibut e sound r ecor dings t o t he public. By limit ing t he r ight of copyr ight holder s t o r epr oduce and dist r ibut e
only as t o t he public, Congr ess t her eby also denied copyr ight holder s t he r ight t o pr eclude home t aping for pr ivat e use. Ibid.
Ibid. It would be folly t o pr esume t hat Congr ess would have made such sweepingchange t ot heexist ingst at e of t he law, t ur ning
millions of pr ivat e cit izens int o lawbr eaker s, wit hout explicit st at ut or y language or legislat ive hist or y.
I bid., pp. 3-4.
21bid., p. 4.
9.3H. ~~n, op. cit ., foot not e 10, P. 2.
9417 U.s.c. 10s (1982).
ci r cu ms t a n ce s .
95
Thus, t he owner of a com-
put er pr ogr am may make anot her copy or ad-
apt at ion of t hat pr ogr am if t he copy is needed
for a specific st ep in using t he comput er pr o-
gr am or if t he copy is for ar chival pur poses.
Gr ea t Br i t a i n
Gr eat Br it ain enact ed a r evised, compr e-
hensive copyr ight act , t he Copyr ight , Designs
and Pat ent s Act 1988, on November 8, 1988.
96
Most of t he pr ovisions of t he Act became effec-
t ive in t he spr ing of 1989, and t he Act r epeals
and ent ir ely r eplaces exist ing copyr ight legis-
la t ion.
Sever a l pr ovisions of t he new Br it ish Act
ar e of int er est in t he analysis of home t aping.
Th e Act pr ovi des a s weepi n g defi n i t i on of
sound r ecor ding t hat exceeds t he Amer ican
concept of sound r ecor ding:
sound r ecor ding means
(a) a r ecor ding of sounds, fr om which
t he sounds may be r epr oduced, or
(b) a r ecor ding of t he whole or any par t
of a lit er ar y, dr amat ic or musical wor k,
fr om which sounds r epr oducing t he
wor k or par t maybe pr oduced, r egar d-
less of t he medium on which t he r ecor d-
ing is made or t he met hod by which
t he s ou n ds a r e r epr odu ced or
pr oduced; ...
97
J ust as Amer ican law per mit s t he copying
of cer t a i n compu t er pr ogr a ms , s o does t h e
Br it ish la w, but t he Br it ish la w ha s a fa r
br oa der a pplica t ion t ha n t he Amer ica n la w.
The Amer ican law is limit ed t o comput er soft -
war e, while t he Br it ish count er par t cover s a
va r iet y of wor k s which ar e
for m:
Wor ks in elect r onic for m
56. (1) This sect ion applies
in el ect r on i c
wher e a copy
of a wor k in elect r onic for m has been
pur chased on t er ms which, expr essly
or impliedly or by vir t ue of any r ule of
law, allow t he pur chaser t o copy t he
wor k, or t o adapt it or make copies of
an adapt at ion, in connect ion wit h his
use of it .
(2) If t her e ar e no expr ess t er ms
(a) pr ohibit ing t he t r ansfer of t he
copy by t he pur chaser , imposing obli-
gat ions which cont inue aft er a t r an-
sfer , pr ohibit ing t he assignment of
any licence or t er minat ing any license
on a t r ansfer , or
(b) pr oviding for t he t er ms on
which a t r ansfer ee may do t he t hings
which t he pur chaser was per mit t ed t o
do, anyt hing which t he pur chaser was
allowed t o do may also be done wit h-
out infr ingement of copyr ight by a
t r ansfer ee; but any copy, adapt at ion
or copy of an adapt at ion made by t he
pur chaser which is not also t r ans-
fer r ed shall be t r eat ed as an infr ing-
ing copy for all pur poses aft er t he
t r ansfer .
(3) The sa me a pplies wher e t he
or iginal pur chased copy is no longer
usable and what is t r ansfer r ed is a
fur t her copy use in it s place.
(4) The above pr ovisions also appl
y
on a subsequent t r ansfer , wit h t he
subst it ut ion for r efer ences in subsec-
t ion (2) t o t he pur chaser of r efer ences
t o t he subsequent t r ansfer or .
98
=17 U.S,C. 117 (1982).
=%: Int el]~u~ Pr oper t y Dept ., Linklat er s & Pt ines, Copyr ight , Designs and Pat ent s Act 1988 1-2 (London: Linldat er s &
Paines, 1988). This wor k is an analysis of t he new Br it ish copyr ight law pr epar ed bya Br it ish law fir m for it s int er nat ional oflicesand
client s.
In addit ion t o dealing wit h copyr ight s, t he Act also includes pr ovisions for t he pr ot ect ion of design r ight s, and pat ent s and t r ade-
mar ks.
97[(_J r ea t Br i ~i n ] Copyn gh t , &si gn s a n d Pa t en t s Act ( 1988), ch . 48, 5( l ).
Ibid., sec. 56.
A par t icular sect ion of t he Act pr ovides for
t h e r en t a l of s ou n d r ecor di n gs , fi l ms , a n d
compu t er pr ogr a ms t o t h e pu bl i c.
99
U n d e r
t hese st at ut or y pr ovisions, a r ent al ar r ange-
ment wit h t he public is out lined. This sect ion
also pr ovides t hat t he copyr ight in a comput er
pr ogr am is not infr inged by t he r ent al of cop-
ies t o t he public aft er t he end of a per iod of 50
yea r s fr om t he end of t he ca lenda r yea r in
which t he copies of it wer e init ially issued t o
t he public in elect r onic for m.
100
The subject of t ime-shift ing is dealt wit h di-
r ect ly in t he Act .
The making for pr ivat e and domest ic use of
a r ecor ding of a br oadcast or cable pr ogr amme
solely for t he pur pose of enabling it t o be
viewed or list ened t o at a mor e convenient
t ime does not infr inge any copyr ight in t he
br oadcast or cable pr ogr amme or in any wor k
included in it .
101
Thus, t he Br it ish law specifically exempt s
t ime-shift ing r ecor ding fr om t he r ealm of in-
fr ingement . In t he Unit ed St at es, t his pr act ice
is embodied only in ca se-la w, not st a t ut or y
law. The pr inciple is fur t her ext ended by t he
pr ovision t hat t he fr ee public showing or play-
ing of a br oadcast or cable pr ogr amme is not
t o be consider ed an infr ingement of copyr ight .
Cer t a in condit ion a nd cir cumst a nces must ,
however , be met for t he viewing t o be consid-
er ed a fr ee public showing.
102
The issue of mor a l r ight s is dir ect ly a nd
compr eh en s i vel y a ddr es s ed i n t h e Br i t i s h
copyr igh t la w.
103
The scope of Br it ish st a t u-
t or y mor al r ight s includes t he r ight t o be iden-
t ified as t he aut hor or dir ect or of t he wor k,
104
t he r ight t o object t o t he der oga t or y t r ea t -
ment of t he wor k,
105
pr ot ect ion a ga inst fa lse
a t t r ibut ion of wor ks,
106
a nd ot her fa ct or s.
Ther efor e, it appear s t hat t he new Br it ish
copyr ight law int ends t o r espond compr ehen-
sively t o r ecent t echnologica l a dva nces a nd
pr oblems t hat ar e cr eat ed t hr ough t he use of
such invent ions.
107
Ca n a d a
The Canadian copyr ight law has r ecent ly
u n der gon e s i gn i fi ca n t a men dmen t s ,
108
a n d
sever al pr ovisions of t he new law pr ovide an
i n t er es t i n g con t r a s t t o Amer i ca n copyr i gh t
law. Canadian copyr ight law is of int er est t o
t he Unit ed St a t es, a s bot h na t ions sha r e a
her it age of t he Br it ish common law t r adit ion
and ar e Nor t h Amer ican neighbor s, wit h an
over fl ow of br oa dca s t i n g, popu l a r cu l t u r e,
and ot her common int er est s.
I t a ppea r s t ha t Ca na da does not ha ve a
home-use except ion embodied in it s copy-
r ight st at ut e. The Canadian st at ut e descr ibes
s ou n d r ecor di n gs a s fol l ows : . . . copyr i gh t
gIbid., sec. 66.
loo~id., sec. 66.(5).
Ibid., sec. 70.
* Ibid., sec. 72.
031bid., ch. IV.
~Ibid., sec. 77.
sIbid., sec. 80.
m
Ibid., sec. S4.
107AJthough the BrltiSh ~vernment consider~ a roy~ty ~yment on b]~k ~pes, it was not enacted as pm of t he copyr ight r eVi-
sion.
IM~: Cmada Gwette, Sta~&S of f&n~, lg~ (Ottowa, Cmada: Minister of supp]y wfices, sept. 1, 1988), chs. 13 t o 19.
Chapter 3Legal As pects of Copy right and Home Copy ing . 83
shall subsist for t he t er m her eina ft er men-
t ioned in r ecor ds, per for at ed r olls, and ot her
cont r ivances by means of which sounds may
be mecha nica lly r epr oduced, in like ma nner
as if such cont r ivances wer e musical, lit er ar y
or dr a ma t ic wor ks. log The lengt h of copy-
r ight pr ot ect ion for t hese wor ks is (fift y year s
fr om t he ma king of t he or igina l pla t e fr om
which t he cont r iva nce wa s dir ect ly or indi-
r ect ly der ived....
110
Sever al aspect s of t he 1988 Canadian copy-
r ight amendment s ar e of int er est . A comput er
pr ogr am is st at ut or ily defined as a set of in-
s t r u ct i on s or s t a t emen t s , expr es s ed, fr eed,
embodied or st or ed in any manner , t hat is t o
be used dir ect ly or indir ect ly in a comput er in
or der t o br ing about a specific r esult .111 The
law also per mit s t he owner of a comput er pr o-
gr a m t o ma ke a single r epr oduct ion of t ha t
pr ogr am for his own u s e.
112
The Ca na dia n
amendment s also r ecognize t he mor al r ight s
of t he cr eat or s of ar t ist ic wor ks and pr ovide
pr ot ect ion for t he injur y t o such r ight s.113
Fr a n ce
Fr ance has a ver y compr ehensive copyr ight
law t hat differ s mar kedly fr om t he ot her laws
examined in t his sect ion. The st at ut or y scope
of int ellect ual wor ks cover s a wide var iet y of
ar t ist ic wor ks:
Ar t icle 3. The following shall in par t icular
be consider ed int ellect ual wor ks wit hin t he
meaning of t his law: books, pamphlet s, and
ot her lit er ar y, ar t ist ic and scient ific wr it ings;
lect ur es, addr esses, ser mons, pleadings in
cour t , and ot her wor ks of t he same nat ur e;
dr amat ic or dr amat ico-musical wor ks; chor eo-
gr aphic wor ks; cir cus act s and feat s and pant o-
mimes, t he act ing for m of which is fixed in
wr it ing or ot her wise; musical composit ions
wit h or wit hout wor ds; cinema t ogr a phic
wor ks and ot her wor ks consist ing of moving
sequences of images, wit h or wit hout sound,
t oget her r efer r ed t o as audiovisual wor ks;
wor ks of dr awing, paint ing, ar chit ect ur e,
sculpt ur e, engr aving, lit hogr aphy; gr aphical
and t ypogr aphical wor ks; phot ogr aphic wor ks
and ot her wor ks pr oduced by t echniques
analogous t o phot ogr aphy; wor ks of applied
ar t ; illust r at ions; geogr aphical maps; plans,
sket ches, and plast ic wor ks, r elat ive t o geogr a-
phy, t opogr aphy, ar chit ect ur e, or t he sciences;
soft war e,....
114
This inclusive scope of int ellect ual pr oper t y in
t he Fr ench law appear s t o be one of t he most
all-encompassing in t he wor ld.
Simila r ly, Fr a nce ha s a ver y fa r -r ea ching
concept concer ning t he per for mance r ight s of
t he a ut hor /copyr ight owner :
Ar t icle 27. Per for mance shall consist in t he
communicat ion of t he wor k t o t he public by
any pr ocess what soever , par t icular ly:
public r ecit at ion, lyr ical per for mance,
dr amat ic per for mance, public pr esent at ion,
public pr oject ion and t r ansmission in a public
place of a t elediffused wor k;
by t elediffusion
Teledifussion shall mean dist r ibut ion by an
t elecommunicat ion pr ocess what soever of
sounds, images, document s, dat a and mes-
sages of any kind.
I o~anadian Copyright statute, ~, 4(3), fr o
m
UNESCO and WIPO, Cop yr i gh t La WS a n d Tr ea t i es of t h e Wr j r l d (Wn sh i n @on , ~:
Bur eau of Nat ional MTair s, 1987).
Ibid., sec. 10.
111 Canada Gazet t e, op. cit ., foot not e 110, sw. 1(3).
21bid., sec. 5.
1 I o~id., sees. 1, 12
I I d~w N. 57.~9~ [ Fr ance] (jn Llt emq un~ Ar t l.St ic PmPer @, Ar t . 3, fr om: UNESCO, Copyr-ght ~us and Treaties of t h e or Ld
( 1987).
Tr ansmission of t he wor k t owar ds a sat el-
lit e shall be assimilat ed t o per for mance.
Tr ansmission of a br oadcast wor k by means
of a loudspeaker or , as t he case may be, by
means of a t elevision scr een placed in a public
place.115
Th i s s t a t u t e pr es en t s t h e n ovel con cept of
t el edi fu s s i on , wh i ch wou l d a p p a r e n t l y
cover t he dist r ibut ion of sounds t hr ough any
t elecommunica t ion pr ocess.
Like t he Amer ican st at ut e, t he Fr ench copy-
r ight law dist inguishes bet ween t he t r ansfer
of per sonal and int ellect ual pr oper t y:
(
The in-
cor por ea l pr oper t y ...sha ll be independent of
pr oper t y r ight s in t he ma t er ia l object . The
per son who acquir es t his object shall not be
invest ed, by it s acquisit ion, wit h any of t he
r ight s pr ovided by t his law...
l16
On e of t h e mos t u n i qu e fea t u r es of t h e
Fr ench copyr ight la w is t he gr ea t empha sis
pl a ced on t h e r i gh t s of t h e cr ea t or a n d/or
copyr ight owner : t he int egr it y of t he cr eat or s
wor ks and t he pr ot ect ion of such cr eat ive ef-
for t s ar e of major impor t ance.
S u m m a r y
While t his sect ion is not a compr ehensive
a na lysis of int er na t iona l copyr ight la w, sev-
er al salient feat ur es of t he var ious nat ional
copyr ight syst ems have been examined. In t he
Unit ed St at es t he fir st -sale doct r ine and t he
r en t a l r ecor d a men dmen t s i l l u s t r a t e h ow
Amer ican copyr ight law has developed and r e-
s pon ded t o pa r t i cu l a r ci r cu ms t a n ces a n d
needs. In Gr eat Br it ain t he new copyr ight law
also r esponded t o changes in societ y and t ech-
nology. Alt hough t he Canadian copyr ight law
is less compr ehensive t han t he ot her st at ut es
exa mi n ed , i t t oo has been amended t o r eflect
changing t echnology. The Fr ench copyr ight
law appear s t o be one of t he most inclusive in
t he wor ld. It s scope of cover age is ver y br oad
and it is defer ent ial t o t he r ight s of cr eat ive
ar t ist s.
CHANGES TO TRADITIONAL
AMERICAN COPYRIGHT
CONCEPTS
I n t er n a t i on a l Pr ot ect i on of
Am er i ca n I n t el l ect u a l Pr oper t y
Concur r ent wit h t he r apid t echnological de-
velopment s in t he audio r ecor ding and r epr o-
duct ion indust r y, t her e ha s been a gr owing
concer n r ega r ding t he int er na t iona l pr ot ec-
t ion of Amer ica n int ellect ua l pr oper t y. Two
for ces ha ve given r ise t o t his concer ns: t he
abilit y t o pr oduce high-qualit y copies of copy-
r ight ed wor ks ea sily a nd inexpensively, a nd
t he r esult ing possibilit y of pir a cy of copy-
r ight ed wor ks t he r epr oduct ion, ma nufa c-
t ur e, and sale of copy-r ight ed wor ks wit hout
t he per mission of t he copyr ight owner .
At t he pr esent t ime t her e exist s no unifor m
int er nat ional or univer sal copy-r ight concept
t h a t wou l d en s u r e t h e pr ot ect i on of a n
aut hor s wor ks on a global basis. An aut hor s
pr ot ect i on for t h e u n a ppr oved u s e of h i s
wor ks in a for eign count r y usually is based on
t hat count r ys laws. Many for eign nat ions pr o-
vide copyr ight pr ot ect ion for wor ks cr eat ed by
for eigner s t hr ough t er ms set by var ious int er -
nat ional copyr ight agr eement s. Pr ot ect ion for
Amer ican aut hor s may exist t hr ough bilat er al
or mult inat ional t r eat ies. The Unit ed St at es is
a member of t he t wo pr incipal mult inat ional
1 l~~id., t it le II, ar t . 27.
1eIbid., ar t . 29.
copyr ight convent ions: t he Univer sa l Copy-
r ight Convent ion (UCC)
117
and t he Ber ne
Convent ion for t he Pr ot ect ion of Lit er ar y and
Ar t ist ic Wor ks (Ber ne Convent ion).
118
Befor e Congr ess enact ed legislat ion t hat en-
abled t he Unit ed St at es t o adher e t o t he Ber ne
Convent ion in 1988, t he UCC pr ovided t he
br oadest int er nat ional pr ot ect ion available t o
Amer i ca n copyr i gh t h ol der s .
119
Ma n y cou n -
t r ies belong t o bot h t he UCC and t he Ber ne
Con ven t i on . Th e UCC s t a n da r ds , h owever ,
ar e not consider ed t o be so st r ingent as t he
Ber ne Convent ions, a nd comment a t or s be-
lieve t hat t he UCC is less effect ive in pr event -
i n g copyr i gh t vi ol a t i on s .
120
Un der t h e UCC,
wor ks by a n a ut hor who is a na t iona l or a
domiciliar y of a UCC member count r y ar e eli-
gible for UCC pr ot ect ion. Any a ut hor , ir r e-
spect ive of na t iona lit y or domicilia r y, whose
wor k was fir st published in a count r y cover ed
by t he UCC, may claim pr ot ect ion under t he
UCC. Thus, under t he UCC, wor ks by Amer i-
cans and wor ks fir st published in t he Unit ed
St at es would at least be given t he same copy-
r ight pr ot ect ion as t hat accor ded t o t he wor ks
of t he for eign count r ys na t iona ls for wor ks
fir st published in t hat for eign count r y. This
copyr i gh t t r ea t men t i s u s u a l l y ca l l ed n a -
t ional t r eat ment .
121
UCC pr ot ect ion is avail-
a bl e t o Amer i ca n a u t h or s , pr ovi ded t h a t
cer t a in not ice for ma lit ies a nd ot her r equir e-
ment s ar e met .
In addit ion t o t he UCC, t he Unit ed St at es
h a s en t er ed i n t o ot h er bi l a t er a l copyr i gh t
t r eat ies or accor ds wit h count r ies t hat belong
t o neit her t he Ber ne Convent ion nor t he UCC.
In r ecent year s t he Unit ed St at es signed t r ea-
t ies wit h cer t ain nat ions wher e alleged copy-
r igh t pir a cy h a d occu r r ed. Amon g t h es e
bilat er al copyr ight t r eat y count r ies ar e Thai-
land, Taiwan, Singapor e, and Sout h Kor ea.
The most r ecent development for t he int er -
na t iona l pr ot ect ion of Amer ica n int ellect ua l
pr oper t y has been Unit ed St at es adher ence t o
t he Ber ne Convent ion. On Mar ch 1, 1989, t he
Unit ed St at es, for mally became a par t y t o t he
Ber ne Convent ion, which ha s been in exis-
t ence since 1886. The decision was made only
aft er ext ensive congr essional consider at ion of
t he implica t ions of member ship.
122
On Ma r ch
1, 1989, cer t ain copyr ight amendment s went
int o for ce t ha t br ought Amer ica n copyr ight
la w int o complia nce wit h Ber ne Convent ion
obl i ga t i on s .
l23
Fr om Ma r ch 1, 1989, onwa r d,
copyr ight s in t he wor ks of Amer ican aut hor s
will r eceive copyr ight pr ot ect ion by all of t he
I I T1he Univerd Copyright Convention consists of t wo act s, one signed in Geneva in 1952 ~d anot her signed in Par is in 1971. The
Unit ed St at es r at ified bot h agr eement s. See: Nimmer , op. cit ., foot not e 2, vol. 1, sec. 17.04 [B].
1 la~r ne Convent ion Imp}ement it ion Act of 1988, Public Law 1OO-568, Oct . 31, 1988, 102 St it . 2853.
11 Whe UCC is administ er ed by t he Unit ed Nat ions Educat ional, Scient ific, and Cult ur al Or ganizat ion WNESCO). This accor d was
est ablished for t he pur pose of pr oviding an int er nat ional copyr ight pr ot ect ion net wor k suit able for t he par t icipat ion of t he Unit ed
St at es.
1%ee: Har r ison Donnelly, Ar t ist s Right s and Copyr ight s, Con gr essi on a l Qu a r t er l ys Ed i t or i a l R esea m h R epor t s, May 13, 1988,
pp. 246, 248.
121~, Nimmer , op. cit ., foot not e 2, vO]. 1, sec. 17.04[BI.
lzzIn t h
e
l~h ConWess, five bi]]s wer e int r oduced and consider ed concer ning t he adher ence of t he Unit ed Sht es t o t he Ber ne
Convent ion: H.R. 1623, H.R. 2962, H.R. 4262, S. 1301, and S. 1971. The Subcommit t ee on Cour t s, Civil Liber t ies, and t he Administ r a-
t ion of J ust ice of t he House J udiciar y Commit t ee held hear ings on H.R. 1623. The House J udiciar y Commit t ee pr epar ed a r epor t on
H.R. 4262 (H.R. Rep. No. 100-609). H.R. 4262 was t he bill t hat was enact ed int o law. The Senat e Subcommit t ee on Pat ent s, Copy-
r ight s, and Tr ademar ks of t he Senat e J udiciar y Commit t ee held hear ings on S. 1301 and on S. 1971 and pr epar ed a r epor t on S. 1301
(S.ReP. No. 100352).
1 zs~ ~b]ic ~w 1~568, o~. 31, 1988, 102 St at . 2853. bong t he Chmges br ought abut b
y
t he Unit ed St at es adher ence t o t he
Ber ne Convent ion wer e: changes in t he for malit ies of copyr ight r egist r at ion, inclusion of ar chit ect ur al plans wit hin t he scope of
copyr ight cover age; mat t er s dealing wit h jukebox licenses, and ot her ar eas. A specific pr ovision of t he law expr essly excludes r ecog-
nit ion of t he concept of ar t ist s or mor al r ight s. See discussion below.
Ber ne Convent ions member nat ions. In ad-
her ing t o t he Ber ne Convent ion, member na-
t ions must agr ee t o t r eat nat ionals of ot her
member nat ions as t heir own nat ionals for t he
pur poses of copyr ight pr ot ect ion. Thus, under
cer t ain inst ances, Amer ican aut hor s may r e-
ceive higher levels of pr ot ect ion t han t he guar -
a n t eed mi n i mu m. Al s o, wor k s of for ei gn
aut hor s who ar e nat ionals of a Ber ne Conven-
t ion count r y and whose wor ks ar e fir st pub-
lished in a Ber ne Convent ion count r y will r e-
ceive a ut oma t ic copyr ight pr ot ect ion in t he
Unit ed St at es.
The pr imar y pur pose of t hese int er nat ional
accor ds is t o pr ovide copyr ight pr ot ect ion for
Amer i ca n n a t i on a l s i n for ei gn cou n t r i es .
While t he exact t er ms of t he accor ds var y, t he
ba sic int ent a nd funda ment a l t r ea t y pr ovi-
sions a r e simila r . Unt il fa ir ly r ecent ly, t he
Unit ed St at es was ambivalent about adher e-
ing t o t he Ber ne Convent ion. A pr imar y r ea-
son for negot iat ing t he UCC was t o pr ovide
Ber ne-like pr ot ect ion for Amer ica n na t ion-
als, and many of t he negot iat or s of t he UCC
saw it as a br idge
)
t o adher ing t o t he Ber ne
Con ven t i on .
124
The pr ovisions of t he UCC and
t he Ber ne Convent ion a r e simila r ; however
differ ences exist . Not ably, t he Ber ne Conven-
t ion ha s no for ma l not ice r equir ement s for
copyr ight r egist r at ion and t he Ber ne Conven-
t ion r ecognizes t he mor a l r ight s of a r t ist s.
Some comment at or s believe t hat t he pr imar y
differ ence bet ween t he t wo a ccor ds wa s t he
not ice of r egist r a t ion r equir ement .
125
Sever al st r ong ar gument s were a dva n ced
for t he Unit ed St at es adher ing t o t he Ber ne
Con ven t ion .
126
A pr imar y r eason was t hat
Ber ne Convent ion member ship would r est or e
t h e Un i t ed St a t es i n t er n a t i on a l copyr i gh t
leader ship r ole, which has been limit ed since
t h e Amer i ca n wi t h dr a wa l fr om UNESCO
t he administ er ing body of t he UCC in 1984.
Anot her impor t ant r eason advanced for Ber ne
Convent ion a dher ence wa s t ha t 24 na t ions
who ar e not member s of t he UCC wer e mem-
ber s of t he Ber ne Convent ion, and gr eat er pr o-
t ect ion t o Amer ican copyr ight holder s would
be ext ended t hr ough Ber ne member ship. Ar -
gu a bl y, Amer i ca n a dh er en ce t o t h e Ber n e
Convent ion would r esult in t he Ber ne Conven-
t ion it self ga ining st r engt h a nd becoming a
mor e dyn a mi c i n t er n a t i on a l for ce i n t h e
r ea lm of copyr ight pr ot ect ion.
127
Ar t i st s R i gh t s
Alt hough t he concept of ar t ist s r ight s is be-
yond t he scope of t his OTA st udy, it is a cur -
r ent issue of concer n in t he field of Amer ican
copyr ight law and will be br iefly summar ized.
The Anglo-Amer ica n common la w copyr ight
t r adit ion did not r ecognize cer t ain (mor al or
a r t i s t s
)
cr ea t ive r ight s in t heir a r t ist ic cr ea -
t ions. Thus, pr ot ect ion for ar t ist s wor ks was
a chieved pr ima r ily t hr ough ba r ga ining a nd
negot iat ion wit h publisher s, pur chaser s, and
ot her buyer s of wor ks. Hence, under common
law, when owner ship of t he object or t he copy-
r ight pa ssed fr om t he cr ea t or t o t he buyer ,
cr eat ive or ar t ist ic r ight s usually passed on t o
t he pur cha ser .
128
In t he Unit ed St at es, wher e
t her e was no st r ong t r adit ion of public sup-
por t for t he ar t s, t her e has not been st r ong
IZ4W. W]en Wa]]is, Int er nat ional Pr ot =t ion of U.S. Copyr ight s, Depa r t m en t of S t a t e Bu l l et i n , Oct ober 1987, p. 26.
Izswi]]im s. St r ong, The ~oWr ig~~ fi~: A 1%-rxtwcd Gu i d e (Cambr idge, m: MIT pr ess, 1981), P. 166.
Ize~: Wd]is, op. cit ., foot not e 124, P. 28.
T ZT~ld. w ~W: U.S. Conwess, The &r ne Con t en t i on , Hear ings befor e t he Subcommit t ee on Pat ent s, Copyr ight s and Tr ade-
mar ks of t he Senat e Commit t ee on t he J udiciar y, lot )t h Cong., 2d sess, ( 1988), pp. 5961.
~ Zaln cont r ast s= t he di~ssion of t he fir st -sale doct r ine above.

r ecognit ion of t he cr eat ive r ight s of t he ar t -
i s t .
129
I n con t i n en t a l E u r opea n cou n t r i es ,
wher e t he r ole of t he ar t ist and his wor k was
con s i der ed mor e i mpor t a n t , di ffer en t l ega l
concept s developed. Thus, in some Eur opean
count r ies a major goal of copyr ight laws is t o
pr ot ect t he connect ion bet ween t he ar t ist and
his wor k. This r ight of pat er nit y r ecognizes
t h e a u t h or s cr ea t i on of t h e wor k. Cer t a i n
Eur opean nat ions also r ecognize laws pr ohib-
it ing t he cha nge, mut ila t ion, or a lt er a t ion
of a r t ist s wor ks. These a r t ist s r ight s wer e
fir st r ecognized by t he Ber ne Convent ion in
1928.
Consider a t ion of a r t ist s r ight s or mor a l
r i gh t s h a s become a n i s s u e i n t h e Un i t ed
St at es. In t he 100t h Congr ess, bills wer e int r o-
du ced
130
and wer e ser iously analyzed and de-
ba t ed.
131
A closely r elat ed issue t o t he t r adi-
t ional concept of ar t ist s or mor al r ight s is t he
r ecent t echnologica l development of mot ion
pict ur e coloniza t ion. Thr ough va r ious elec-
t r onic means, color is added t o copies of mo-
t ion pict ur es t hat wer e or iginally pr oduced in
bla ck a nd whit e. Cur r ent ly, mor a l r ight s of
a r t i s t s a r e n ot for ma l l y r ecogn i zed i n t h e
Unit ed St at es, as t hey ar e in some Eur opean
na t ions.
I n a dher ing t o t he Ber ne Convent ion, t he
Unit ed St at es specifically did not agr ee t o t he
Ber ne Convent ions pr ovisions for mor a l/a r t -
ist s r ight s. As t he Ber ne Convent ion Imple-
ment a t ion Act pr ovided:
(b) CERTAIN RIGHTS NOT AFFECTED.
The pr ovisions of t he Ber ne Convent ion, t he
adher ence of t he Unit ed St at es t her et o, and
sat isfact ion of Unit ed St at es obligat ions
t her eunder , do not expand or r educe any r ight
of an aut hor of a wor k, whet her claimed under
Feder al, St at e, or t he common law
(1) t o claim aut hor ship of t he wor k; or
(2) t o object t o any dist or t ion, mut ilat ion, or
ot her modificat ion of, or ot her der ogat or y ac-
t ion in r elat ion t o, t he wor k, t hat would pr eju-
dice t he aut hor s honor or r eput at ion.
132
Th u s , a l t h ou gh t h e i s s u e of a r t i s t s /mor a l
r ight s has been of consider able legislat ive, po-
l i t i ca l , a n d s oci et a l con cer n i n t h e Un i t ed
St at es, no major legislat ion addr essing it has
been enact ed.
129N~d1ne Coh{xjas, Berne-Convention Bill Appr oved, Congr essional Qu a r t er l y, Apr . 16, 1988, pp. 1028, 1028-1029.
13~W{) pi~es of C[)mpanion ]e@S]atic)n were introduce] in t he 100t h Congr ess concer ning ar t ist s r ight s: H.R. ~~22 1 t infl S 16 lg.
The House Sut xommit t L* on Cour t s, Civil Liber t ies and t he Administ r at ion of J ust ice of t he House J udiciar y Commit t ee hel(l hear -
ings on H. R. 3221 The Subcom mit t ee on Pat ent s, Copyr ight s and Tr ademar ks of t he Senat e J udiciar y Comm lt t ee held hmir ings on S.
161!). Alt hough neit her hill was enact ed, negot iat ions and deliber at ions wer e in pr ogr ess at t he close of t he IOOt h Congr ess, t ind t his
legislat ion had pr oceeded far t her in t he legislat ive pr ocess t han pr ior legislat ion concer ning ar t ist s r ight s. At t he t ime oft h is wr it -
ing, legislat ion has not yet been int r oduced in t he 101st Congr ess concer ning ar t ist s r ight s.
131 w for ins~ce U.S. Conwess, Vlsuu/ Artlsls Rights Act of 1987, Hear ings befor e t he Subcommit t ee on Pat ent s, copyr ight s t ind
Tr adem&ks of t he Senat e Commit t ee on t he J udiciar y, IOOt h Cong., 1st sess. ( 1987).
I qzfiblic ~w 100-568, 102 s~t. 2&53, Oct . 31, 1988, sec. ~(b).
Ch a p t er 4
An Over vi ew of t h e
US. Recor d i n g I n d u st r y
CONTENTS
Pa ge
THE GROWTH IN THE U.S. RECORDING INDUSTRY . . . . . . . . . . . . . . . . 91
RECORDING COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Recor d Compa ny Funct ions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Differ ences Bet ween Major s and Independent s . . . . . . . . . . . . . . . . . . . . . . 94
Di s t r i bu t i on . . * . . o * O O * * 0 * * . o * . o * . . * * o . . . . . * * o * . . . . o o o * . . . . o o . . 95
Ret ail Sales * * . . . * * . * . . * , * . * * * . * e m * . * * * . . * * . * * . . * * * * . * * * * * . . * . . 96
RECORDING CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Types of Recor ding Cont r act s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Cont r act Pr ovisions . . . . . . q... *o** *oooo*o **** *. * * * * o * *, **.*,..*. 98
T a bl es
Table Page
4-1. Annual Shipment s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Ch a p t er 4
An Over vi ew of t h e U.S. Recor d i n g I n d u st r y
THE GROWTH IN THE
U.S. RECORDING INDUSTRY
The U.S. r ecor ding indust r y is a mult ibil-
lion-dollar indust r y t hat has exper ienced a cy-
clical ser ies of gains and losses (t able 4-1). For
t he past sever al year s, however , t he r ecor ding
indust r y has been exper iencing an incr ease in
r evenues: t he indust r ys dollar volume in 1987
wa s $5. 57 bi l l i on i n ma n u fa ct u r er s
)
s h i p -
ment s (based on t he suggest ed list pr ice), an
incr ea se of 19.7 per cent over 1986 figur es,
l
and t he 1988 volume was a r ecor d $6.25 bil-
lion, a 12.2-per cent incr ea se over 1987.
2
Th e
number of r ecor ds, t a pes, a nd CDs shipped,
net aft er r et ur ns fr om r et ailer s, incr eased 8
per cent t o r each an all-t ime high of 761.9 mil-
l i on
3
(t a ble 4-l). The Ha r r y Fox Agency, t he
music licensing agency, r epor t s t hat 65,525 li-
censes wer e issued in 1988, a 13.6-per cent in-
cr ease over 1987. Of t hese, 25,380 (38.7 per -
cent ) wer e fir st -t ime licensed songs, compar ed
wit h 15,088 fir st -t ime licenses in 1987.
4
Alt hough r evenues for t he r ecor ding indus-
t r y ar e expect ed t o gr ow at an aver age annual
r at e of about 6 per cent t hr ough 1993,
5
in du s -
t r y s pokes men a r e a da ma n t t h a t cu r r en t
gr owt h does not indica t e t ha t t he effect s of
home audiot aping ar e negligible. On t he con-
t r ar y, t hey asser t t hat r evenue gr owt h would
h a ve been even la r ger , i f n ot for h ome
a u di ot a pi n g.
6
A lar ge par t of t he r ecent incr ease in r eve-
nues can be at t r ibut ed t o t he int r oduct ion of
sever al new for mat s, especially compact discs
(CDs). Int r oduced in 1983, CDs account ed for
a t hir d of t he indust r ys t ot al dollar volume in
1988 (t a bl e 4-l ). Sa l es of ca s s et t e s i n gl es
r eached $57.3 million since t heir int r oduct ion
in 1987, and sales of yet anot her new for mat ,
t he 3-inch CD single amount ed t o near ly $9.8
million (t a ble 4-l).
Mea n wh i l e, t h e pr ol i fer a t i on of por t a bl e
ca s s et t e pl a yer s , Wa l k ma n -t ype s t er eos ,
a udioca sset t e decks, et c., ha s incr ea sed t he
popular it y of casset t es, which ar e now t he pr e-
dominant for mat or car r ier for pr er ecor ded
music. Casset t e sales account ed for 54 per cent
of all dollar s spent on pr er ecor ded music for
1988, while unit sales incr eased 10 per cent in
1988 t o a value of $3.38 billion
7
(t a ble 4-l).
The sales value of LPs declined t o $532.3
million, cont inuing a decline t ha t bega n in
1980. Unit sales of disk singles also declined
11 per cent in 1988 (t able 4-l).
RECORDING COMPANIES
8
The U.S. r ecor ding indust r y has six domi-
nant r ecor d companies (t he major s), each
wit h sever al affiliat ed labels. They ar e:
FUAA Mar ket , Resear ch Commit t ee, Recor ding Indust r y Associat ion of Amer ica, Inc., 1989.
ZH. ~=n, IL@]et t er t o J . Winst on, OTA, May 2, 1989. Enclosur e wit h comment s on dr afl ch. 3, p. 1.
3W M~ket ~sear ch Commit t m, Recor ding Indust r y Associat ion of Amer ica, Inc., 1989.
Edwar d P. Mur phy, Pr esident , Nat ional Music Publisher s Associat ion, Inc. and t he I-Lar r y Fox Agency, Inc., let t er t o OTA, Feb. 28,
1989,
su s ~W~ment of Commer ce, U.S . I n d u st r i a l Ou t f ook , 1989, p. 57-4.
.
U.S. Congr ess, Senat e J udiciar y Commit t ee, Vi d eo a n d Au d i o Hom e Ta pi n g, hear ings befor e t he Subcommit t ee on Pat ent s, Copy-
r ight s, and Tr ademar ks, Ser ial No. J -98-75, Oct . 25, 19&3; and U.S. Congr ess, Senat e J udiciar y Commit t ee, Home Au d i o R eco&i n gAct ,
hear ings befor e t he Subcommit t ee on Pat ent s, Copyr ight s and Tr ademar ks, Ser ial No. J -99-69, Oct . 30,1985, Mar . 25 and Aug. 4,1986.
H. Rosen, RIAA, let t er t o J . Winst on, OTA, May 2, 1989. Enclosur e wit h comment s on dr aft ch. 3, p. 2.
f3The fo]]o~ng is a ~ner ~ Ovemiew of t h
e
us, r =or r ] indust v, ~d is in no wa y m e~t t o & a comprehensive discussion Of how
r ecor ding companies funct ion. It is not an at t empt t ,o fully explain all aspect s of t he r ecor ding indust r y, but r at her highlight s some of
t he major char act er ist ics and dist inct ions of it s oper at ion.
91
\0
Table 4-1.-Annual Shipments
tv

Manufacturers' unit shipments (millions net after returns)
~
%Chg.
~
~
'74 '75 '76 '77 '78 '79 '80 '81 '82 '83 '84 '85 '86 '87 '88 '87'88
~ .
~
.....
Disc singles 204.0 164.0 190.0 190.0 190.0 195.5 164.3 154.7 137.2 124.8 131.5 120.7 93.9 82.0 65.6 -20%
Q
;:s
Q..
LP's/EP's 276.0 257.0 273.0 344.0 341.3 318.3 322.8 295.2 243.9 209.6 204.6 167.0 125.2 107.0 72.4 -32%
~
CD's 0.8
8
5.8 22.6 53.0 102.1 149.7 +47%
~
~
Cassettes 15.3 16.2 21.8 36.9 61.3 82.8 110.2 137.0 182.3 236.8 332.0 339.1 344.5 410.0 450.1 +10%
~
~
CD singles
1.6
8
NA ~ .
Cassette
~
singles 5.18 22.5 +341.% CO)
~
Total
b
592.0 531.8 590.9 698.2 726.2 701.1 683.7 635.4 577.7 578.0 679.8 653.0 618.3 706.8 761.9 +8% I ~
~
~
Q
Manufacturers' dollar value ($ millions at suggested list price)
.....
.....
~
;:s
% t;ng.
~
'74 '75 '76 '77 '78 '79 '80 '81 '82 '83 '84 '85 '86 '87 '88 '87'88 ~
.....
~
~
Disc singles 194.0 211.5 245.1 245.1 260.3 275.4 269.3 256.4 283.0 269.3 298.7 281.0 228.1 203.3 180.4 -11%
I ~
LP's/EP's 1,356.0 1,485.0 1,663.0 2,195.1 2,473.3 2,136.0 2,290.3 2,341.7 1,925.1 1,689.0 1,548.8 1,280.5 983.0 793.1 532.3 -33%
CD's 17.28 103.3 389.5 930.1 1593.6 2089.9 +31%
Cassettes 87.2 98.8 145.7 249.6 449.8 604.6 776.4 1,062.8 1,384.5 1,810.9 2,383.9 2,411.5 2,499.5 2,959.7 3,385.1 +14%
CD singles
9.8
8
NA
Cassette
singles
14.3
8
57.3 T301%
Total 2,186.4 2,378.3 2,732.0 3,500.8 4,131.4 3,685.4 3,862.4 3,969.9 3,641.6 3,814.3 4,370.4 4,387.8 4,651.1 5,567.5 6,254.8 +12%
SOURCE: RIM Markel Research Committee, 1989
a Format introduced. 1987 sales for cassette singles are for only 6 months
b RIM totals include 8-track tapes
Chapter 4An Overview of the U.S. Recording Indus try .93

1.
2.
3.
4.
5.
6.
CBS Recor ds Gr oup, which owns, among
ot her s, t he Columbia, Epic, and Por t r ait
la bels;
War ner Communicat ions, Inc., which
owns, among ot her s, War ner Br ot her s,
Elekt r a/Asylum/Nonesuch Recor ds, and
At lant ic Recor ds;
RCA Recor ds Gr oup, which along wit h
Ar ist a is a subsidiar y of Ber t elsmann
Music Gr oup (BMG) of West Ger many,
Capit ol Indust r ies-EMI, Inc., which
owns Capit ol Recor ds, EMI Amer ica, An-
gel, Manhat t an, and Blue Not e labels;
MCA, Inc.; and
Polygr am, which includes t he Mer cur y,
Polydor , Phillips, London, and Deut sche
Gr a mophone la bels.
For t he most par t , t he major s have hist or i-
cally gr own in size by t he acquisit ion of
smaller compet it or s.
9
For example, each of
t he affiliat ed labels of War ner Communica-
t ions, Inc., was at one t ime an independent
company, and MCA, Inc., just r ecent ly ac-
quir ed Mot own r ecor ds.
The major r ecor ding companies have expe-
r ienced t r emendous gr owt h over t he cur r ent
upswing. In 1988, bot h CBS and BMG Rec-
or ds exper ienced t heir biggest selling year .
10
Similar ly, War ner Communicat ions achieved
it s highest oper at ing income in t he fir st half of
1988, net t ing $143 million.
11
MCA, Inc., hit an
all-t ime high mar k of $41 mi lli on i n 1987, a
21-p er cen t incr ease over t he pr evious year .
12
Cur r ent ly, t her e ar e t wo lar ge independent
r ecor ding companies, A&M, which cont r act s
wit h BMG for it s manufact ur ing and dist r ibu-
t ion, and Chr ysalis, which cont r act s wit h
CBS. Mot own Recor ds, pr eviously anot her
lar ge independent company, was r ecent ly sold
t o MCA which had handled it s manufact ur -
ing and dist r ibut ion, and t o MCA' S invest -
ment par t ner , Bost on Vent ur es, for $61 mil-
lion.
13
These lar ge independent labels have
maint ained at least 1 per cent of t he mar ket
shar e over a per iod of year s, and wit h t he ex-
cept ion of dist r ibut ion, t hey per for m all of t he
funct ions of a major r ecor ding company.
14
Ther e ar e numer ous ot her independent la-
bels. MTS, Inc., t he company t hat r uns Tower
Recor ds, for example, car r ies over 2,600 list -
ings of independent labels.
15
These fir ms var y
in size fr om A&M and Chr ysalis t o a label
owned by just one ar t ist .
16
Most ar e small
fir ms t hat in t he aggr egat e maint ain a mar ket
shar e of less t han 1 per cent .
17
9David E. ~onemyer ~d J , Gr eWV Sidd, The St r uct ur e and Per for mance of t he U.S. Recor d Indust r y, 1986 Ent er t ainment ,
Pu bl i sh i n gu n d t h e Ar t s Ha n d book , by J ohn David Vier a and Rober t Thor ne (eds.) (New Yor k, NY: Clar k Boar dman Co. Lt d., 1986), p.
266.
IODavid L1e~r mm, ~~Now P]afing: Th
e
~und of Money: Th
e
wor d Indust r ys P]at inum Success IS Spawning Mult imedia Em-
pir es, Bu si n ess Week , No. 306586-90, Aug. 15, 198S, pp. 86-87.
1 I Mark Meh]er, IIWCI Music Nets $143 Mi] Income in Recor d 1st ~f, Bill~t i, VO]. 100, No. s 1, Ju]y so, 1988, p. b.
2Lieber man, op. cit ., foot not e 10, p. 86.
I a%&fwk pot t s, (l&aPfine~s Right : Mot Own ~]d: & Rumor ~, M(_J A Inc. TO Buy Recor d Compny, T h e Wa sh i n gt on Post , J une
29, 1988, pp. G8G9.
14Un1t ~ St it es of ~er ica ~for e F~er ~ Tr ade Commission, Docket No. 9174, In t he mat t er of War ner Communicat ions, Inc.,
War ner Br os. Recor ds, Inc., Chappell & Co., Inc., and Polygr am Recor ds, Inc., Tr ial Br iefofCounsel Suppor t ing t he Complaint , Aug. 17,
1987, p. 9.
15Russe]] M. ~lomon, president, Towe r Re cor d s , l e t t e r t o OTA, Ma y 2> 1989.
Wr oner nyer and Sidak, op. cit ., foot not e 9, p. 270; FTC hear ings, op. cit ., foot not e 14, pp. 8-9.
FTC hear ings, op. cit ., foot not e 14, pp. 8-9.
94 . Copyr i gh t a n d Hom e Copyi n g: Tech n ol ogy Ch a l l en ges t h e La w
R ecor d Com pa n y Fu n ct i on s
The pr oduct ion and sale of pr er ecor ded mu-
sic in t he Unit ed St at es compr ise t hr ee major
funct ions: pr oduct ion, manufact ur ing, and
dist r ibut ion. Pr oduct ion ent ails select ing and
r ecr uit ing ar t ist s and mat er ial for t he ar t ist t o
r ecor d, secur ing t he ar r angement , financially
managing t he r ecor ding, and r ecor ding t he
mat er ial. Manufact ur ing involves r epr oduc-
ing and packaging t he r ecor dings ont o cas-
set t es, LPs, singles, CDs, et c. Dist r ibut ion in-
cludes mar ket ing, adver t ising, pr omot ion,
and t he or der ly r elease of t he pr oduct , as well
as managing sales, invent or y, collect ion, and
wholesale pr icing.
18
While exact dat a wer e not
available t o OTA, int er views wit h r ecor ding
company execut ives suggest t hat manufact ur -
ing, packaging, and r oyalt y cost s ar e about
$2.50 t o $2.75 for a t ypical LP/casset t e, and
$3.50 t o $4.00 for CDs. Of t he wholesale pr ice
(appr oximat ely $5.00 for an LP or casset t e),
per haps $1.00 will go t o t he ar t ist and anot her
$0.55 will go t o t he music publisher and song-
wr it er .
19
Di f f er en ces Bet ween Ma j or s a n d
I n d ep en d en t s
Wher eas all of t he major labels ar e t ypically
minor subsidiar ies of diver sified cor por a-
t ions,
20
independent labels ar e gener ally in-
volved only in t he business of pr oducing r e-
cor ds.
21
The major r ecor d companies also
differ fr om t he independent s in t hat t hey ar e
ver t ically int egr at ed int o t he pr oduct ion and
dist r ibut ion of pr er ecor ded music on a na-
t ional or int er nat ional scale.
22
Thus, t hey can
pr oduce, manufact ur e, and dist r ibut e t heir
pr oduct s. Independent s, on t he ot her hand, do
not have t his capacit y, and must eit her sub-
cont r act wit h a major r ecor ding company or
r ely on an independent fir m t o manufact ur e
and dist r ibut e t heir pr oduct s. Independent
dist r ibut or s ar e limit ed t o dist r ibut ing pr od-
uct s on a r egional basis.
23
Subcont r act ing ar r angement s can be bene-
ficial t o t he major s as well as t he independ-
ent s.
24
Major r ecor ding companies have devel-
oped ext ensive manufact ur ing and
dist r ibut ion net wor ks t o t ake advant age of
lar ge economies of scale. These net wor ks r e-
quir e an adequat e flow of sound r ecor dings t o
oper at e at opt imal efficiency. The WEA (War -
ner /Elekt r a/Asylum) dist r ibut ion net wor k,
for example, employs over 1,000 people in
four r egional dist r ibut ion cent er s, and in
1987, it t r acked over 1,500 line it ems.
25
By
subcont r act ing it s facilit ies t o independent s,
t he major s ar e able t o oper at e at maximum ef-
ficiency, and, in r et ur n, t he independent s ar e
able t o pr ice t heir pr oduct s compet it ively.
26
e
Ibid., p. 7.
IgOTAs~ int e~ew wit h r ~or d company execut ive, J une 22, 1988; H. Rosen, R.I.AA, let t er t o J . Winst on, OTA, May 2, 1989. Enclo-
sur e wit h comment s on dr aft ch. 3, p. 8.
~fionemyer and Sidak, op. cit ., foot not e 9, p. 267.
21 Dick Weissmm, Recor d companies,
Th e Mu sk Bu si n ess: Ca r eer Oppor t u n i t i es a n d S ei f i Def en se (New Yor k, NY: Cr own Pub-
lisher s, Inc., 1979), p. 36.
ZZFTC hear in~, op. cit ., foot not e 14, P. 8.
z31bid., p. 8.
z4The fo]]o~ng is ~en fr om Kr onemyer and Sidak, op. cit ., foot not e 9, p. 2?0.
250TA sw inteMew with WEA execut ive, J une 22, 1988.
ze~onemyer and Sidak, op. cit ., foot not e 9, p. 270.
Chapter 4An Overview of the U.S. Recording Indus try q 9 5
Re l a t i ve Ad va n t a ge s a n d Di s a d va n t a ge s
27
The major s have compar at ive advant ages
over independent s in manufact ur ing and dis-
t r ibut ion since t hey can mor e closely coor di-
nat e t he r elease of t he pr oduct wit h mar ket -
ing, pr omot i on ,
a n d s a l e s e f f or t s .
28
T h e
independent s can, however , incur lower fixed
cost s of ma nufa ct ur ing a nd dist r ibut ion by
s u bcon t r a ct i n g wi t h t h e ma j or s . Over a l l
ma n u fa ct u r i n g a n d di s t r i bu t i on cos t s a r e
higher for major r ecor d companies, alt hough
t he major it y of t he cost s associat ed wit h r e-
cor ding music (i. e., st udio t ime, pr oducer s
fees, musicians, et c.) r emain t he same r egar d-
less of t he size of t he r ecor ding company.
29
Because of t heir st at ur e,
30
and t heir abilit y
t o offer lar ge bonuses and incr eased r oyalt y
r at es, t he major s ar e mor e able t o at t r act well-
est ablished ar t ist s t han ar e independent s. A
major label may also bet t er be able t o affor d
t o r isk a vent ur e on new t alent , and, in fact ,
ma y vi ew i t s fu t u r e i n t h a t ma r ket .
31
Al -
t hough many new act s get t heir fir st br eak
by s i gn i n g wi t h a n i n depen den t r ecor di n g
company, t he Recor ding Indust r y Associat ion
of Amer ica (RIAA) r epor t s t hat t he major dis-
t r ibut or s sell most of t he new t alent on t he
mar ket and t hat t he vast major it y of r ecor ds
r eleased by t he major dist r ibut or s ar e not by
t he pr oven successes.sp Sales fr om a few new
t alent s may r epr esent huge pr ofit s for r ecor d
companies, since new ar t ist s r ar ely r eceive t he
high r oyalt y r at es of well-est ablished ar t ist s.
At t he same t ime, new t alent may also r epr e-
sent a subst ant ial loss for a r ecor d company
since most new r ecor dings fail t o make a
pr ofit .
Di st r i bu t i on
Dist r ibut ion involves t he sale of t he pr od-
uct t o r et ailer s, wholesaler s, subdist r ibut or s,
and somet imes, dir ect ly t o t he consumer s. It
also involves war ehousing and invent or y con-
t r ol, and t r acking of consumer buying habit s.
Music is per ishable in t he sense t hat sales
depend on closely coor dina t ing a dver t ising,
mar ket ing, pr omot ion, and pr icing. The bulk
of a r ecor dings sales ar e gener at ed dur ing t he
shor t t ime in which it is a hit . Thus, it is
cr it ical t hat an adequat e supply of t he pr od-
uct be available when demand peaks.
33
The major s dist r ibut e over 83 per cent of t he
r ecor ding indust r ys t ot al volume,
34
appr oxi-
mat ely 10 per cent of which is for independent
labels.
35
Wit h t he except ion of r ecor dings t he
ar t ist sells in conjunct ion wit h per for mances,
independent dist r ibut or s account for t he r e-
maining 17 per cent . Independent dist r ibut or s
oper at e r egionally in t he Unit ed St at es. Most
car r y pr oduct s fr om some of t he lar ger inde-
pendent labels, in addit ion t o a lar ge number
fr om t he smaller ones.
2TThe fo]]owlng is ~ken fr om Kr onemyer and Sidak, op. cit ., fcx]t not e 9, pp. 267-270.
2aIhid., p. 270.
2gIbid.
30~c heuinw, Op. cit ., foot not e 14, p. 10
31 H. ~Sen, ~, letter t[j J. Winston, OTA, May ~, lf)~~, Enc]osllre with c~mments on draft ch ~~, p. 7
321bid.
sa~c hear inW, op. cit ., fOOt ,not e 14, p. 14.
341bid., p. 52.
351bid,, p. 19.
All of t he major s wit h t he except ion of
MCA, which has a for eign dist r ibut ion con-
t r act wit h War ner Communicat ions, Inc.
dist r ibut e t heir r ecor dings out side of t he
Unit ed St at es and ear n as much as half of
t heir r evenue fr om for eign sales. For eign mar -
ket s pr ovide a gr eat er oppor t unit y for r ecor d-
ing companies t o spr ead t heir init ial pr oduc-
t ion cost s and gener at e higher r evenues.
36
R et a i l S a l es
37
Recor d st or es ar e r esponsible for over 60
per cent in dollar volume sales of pr er ecor ded
music. Lar ge-scale out let s ar e supplied di-
r ect ly by t he r ecor ding companies; smaller op-
er at ions pur chase t heir mer chandise at a
slight mar kup fr om subdist r ibut or s, known
a s one-st ops. One-st ops st ock pr oduct s
fr om a wide r ange of labels, especially t hose of
t he major r ecor ding companies. One-st ops of-
fer r ecor d r et ailer s t he convenience of pur -
chasing most , if not all, of t heir music fr om
one sour ce. Some one-st ops specialize in one
par t icular t ype of music; ot her s car r y a wide
r ange of select ions.
Mass mer chandiser s, such as depar t ment
and discount st or es, sell a high volume of
pr er ecor ded music, par t icular ly hit r ecor ds.
Most mass mer chandiser s do not buy dir ect ly
fr om t he r ecor ding company, but r at her enlist
t he ser vices of a r ack jobber t o supply t heir
music. Rack jobber s car r y a nar r ow select ion
of pr er ecor ded music, usually t he t op albums
on t he music t r ade paper char t s, and t hus
limit t heir select ions t o cur r ent hit s. In some
cases t he r ack jobber act ually leases t he space
in t he depar t ment or discount st or e and owns
as well as oper at es t he r ecor d depar t ment .
38
Recor ding companies also sell t heir pr oduct
dir ect ly t o t he consumer via dir ect mail. Cur -
r ent ly, t her e ar e t wo r ecor d clubs oper at ed by
t he major r ecor ding companies:
39
t he Colum-
bia Recor d Club, par t of Columbia House, a
division of CBS, Inc., which dist r ibut es music
fr om all t he major labels wit h t he except ion of
RCA; and RCA which dist r ibut es it s music
along wit h t he pr oduct s of ot her companies
such as A&M, Ar ist a, Capit ol, Mer cur y, and
London.
40
Smaller r ecor ding companies also
oper at e t heir own mail or der syst ems, but of-
fer a nar r ower select ion.
RECORDING CONTRACTS
Types of R ecor d i n g Con t r a ct s
Cr ucial t o t he r ecor ding business ar e t he
cont r act s t hat define t he business ar r ange-
ment s under lying r ecor d pr oduct ion and t he
allocat ion of r evenues fr om t he r ecor ded ma-
t er ial. Alt hough t her e is no one st andar d r e-
cor ding cont r act t oday, r ecor ding agr eement s
t end t o be negot iat ed wit hin one of four cat e-
gor ies:
41
t he exclusive ar t ist r ecor ding con-
t r act , t he all-in ar t ist cont r act , t he pr oduc-
Wbid., pp. 30-31.
sTThe fo]]ofingis ~en fr om mat er ial incor por at ed in t he FTC hear in~; Dick Weissman,
HowRecor ds Ar e Sold and Dist r ibut ed,
Th eMu si cBu si n ess: Ca n wr Oppor t u n i t i es a n d S el f Def en se (New Yor k, NY: Cr own Publisher s, Inc., 1979), pp. 60-67, and Adam Whit e
(&.), InSi&~he RemdingInduStT: An IntmduCtion toherimSMuSicBuSineSS (Washingt on, DC: Recor ding Indust r y Associat ion of
Amer ica, 1988).
38weissm~, op. cit., foot not e 37, P. 62.
39H. ~=n, FUAA, ]etter to J . Winst on, OTA, May 2, 1989. Enclosur e wit h comment s on dr aft ch. 3, p. 12.
4%idney Shemel and M. William Kr asilovsky, Th i s Bu si n ess of Mu si c (New Yor k, NY: Billboar d Publicat ions, 1985), wit h 1987 up-
dat e, p. 56.
41 The fo]]o~ng is inmr pr a~ fr om Am H. ~mser ~d Fr ~ E. ~ldr ing, cur r ent Tr ends in kor d Deals, l!?&?4 En t er t a i n m en t ,
Pu bl i sh i n g, a n d t h eAr t s Ha n d book , Michael Myer and J ohn David Vier a (eds.) (New Yor k, NY: Clar k Boar dman Co. Lt d., 1984), pp.
168- 169; Shemel and Kr asilovsky, op. cit ., foot not e 40, p. 47; I%r old Vogel, The Music Business, En t er t a i n m en t I n d u st r y Econ om i cs:
A Gu i d e For Fi n a n ci a /%a l ysi s (New Yor k, NY: Cambr idge Univer sit y Pr ess, 1986), p. 145; and H. Rosen, RLA.A, let t er t o J . Winst on,
OT~ May 2, 1989 (enclosur e wit h comment s on dr aft ch. 3, pp. 12-16).
Photo Credit: Ed Asmus, Courtesy of MTS, Inc.
Casset t es have become t he most popular audio for mat .
t i on c on t r a c t , or t h e m a s t e r p u r c h a s e or
mast er license cont r act . Under t he exclusive
a r t ist r ecor ding cont r a ct , t he r ecor ding com-
pany signs t he ar t ist dir ect ly t o t he label, and
a n in-house or independent pr oducer is a s-
signed t o guide t he pr oject . Under an all-in
a r t ist cont r a ct , t he r ecor ding compa ny con-
t r act s dir ect ly wit h t he ar t ist , who fur nishes
his own independent pr oducer . The ar t ist is
paid a lump sum, and t hen must pay t he pr o-
ducer and ot her cost s.
42
Under t he pr oduct ion
cont r a ct ,
43
t he r ecor ding company cont r act s
wit h an independent pr oduct ion company
r epr esent ing t he ar t ist . The pr oduct ion com-
pany need not be a music pr oducer per se, and
in some cases may simply be t he ar t ist s man-
ager .
44
Under t he mast er pur chase or mast er li-
cense cont r act , t he ar t ist pr ovides finished
42
H. Rosen, RIAA, let t er t o J . Winst on, OTA, May 2, 1989. Enclosur e wit h comment s on dr aft ch. 3, p. 13.
4aFor a mor e dehi]~ dixussion of pr oduct ion cont r act s, see Bomser and Goldr ing, op. cit ., fOOt nOt e 41, PP. 168-169.
44H. ~sen, RH, ]etter to J . Wi n s t on , OTA, Ma y 2 , 1 9 8 9 . E n cl os u r e wi t h c o m m e n t s o n dr t i ch. 3, P. 12.
98 . Cop y r i g h t a n d H om e Cop y i n g: Te ch n ol ogy Ch a l l e n ge s t h e L a w
mast er r ecor dings t o a pr oduct ion company
which t hen sells or licenses t hem t o a r ecor d-
ing company.
45
Wit hin t hese cat egor ies, specific cont r act
pr ovisions ar e based on negot iat ions bet ween
t he r ecor ding company and t he individual ar t -
ist or t he pr oduct ion company r epr esent ing
him. These pr ovisions may be cont ingent on
t he r elat ive bar gaining power of t he r ecor ding
ar t ist i.e., whet her he is a new or well-est ab-
lished ar t ist .
Con t r a ct Pr ovi si on s
Len gt h of Con t r a ct
In t he past , a r ecor ding ar t ist s cont r act
t ypically r an for 1 year , wit h t he r ecor ding
company having t he opt ion t o ext end t he con-
t r act per iod for up t o four addit ional l-year
per iods. Now, however , r ecor ding cont r act s
usually specify t he number of albums t o be
deliver ed, wit h opt ions for an addit ional num-
ber of albums t o be deliver ed in t he fut ur e.@
Dur ing t his cont r act per iod, t he ar t ist is obli-
gat ed t o r ecor d exclusively for t hat r ecor ding
company. This pr ovision pr ot ect s t he r ecor d-
ing company fr om having it s ar t ist st ar t r e-
cor ding for anot her company aft er t he or igi-
nal company has invest ed a gr eat deal of t ime
and money in developing t hat ar t ist s car eer .
47
Alt hough t he cont r act s usually bind t he r e-
cor d company t o r ecor d t he ar t ist , t hey do not
r equir e t hat t he r ecor dings act ually be r e-
leased. Cont r act negot iat ions might st ipulat e
t hat t he ar t ist is fr ee of cont r act ual obliga-
t ions if t he r ecor ding company fails t o r elease
t he ar t ist s wor k aft er a specified per iod (e.g.,
6 mont hs).
Ot her issues t hat t he ar t ist and t he pr oduc-
t ion company or r ecor ding company negot iat e
include default clauses, condit ions under
which a cont r act can be r eassigned t o anot her
per son or company, for eign r elease commit -
ment s, owner ship of publishing r ight s, and
t he ar t ist s r ight t o audit t he r ecor ding com-
panys books.
48
Owner ship and Use of Mast er s
49
Since a r ecor ding agr eement is a cont r act
for employment bet ween t he r ecor ding ar t ist
and t he r ecor ding company, t he company
owns t he r ecor ded pr oduct as a wor k-made-
for -hir e under t he U.S. copyr ight laws, un-
less ot her wise pr ovided.
50
Cont r act negot ia-
t ions det er mine whet her t he mast er s and t he
copyr ight s of t he sound r ecor ding would r e-
ver t t o t he ar t ist aft er a cer t ain per iod. Most
cont r act s also cont ain language addr essing r e-
lease, r emast er ing, r eissues, et c.
Recor ding Cost s and Advances
In t he Unit ed St at es, as in all count r ies but
Fr ance,
51
all cost s of r ecor ding and pr oducing
a musical wor k ar e r ecoupable out of an ar t -
ist s r oyalt ies. It can cost fr om $100,000 t o
$500,000 or mor e t o r ecor d and pr oduce an al-
bum.
52
The init ial invest ment for a new ar t ist
is usually over $200,000, excluding t he cost s of
mar ket ing, adver t ising, and pr oducing a pr o-
45~mser ~d ~]dring, o p , c i t . , f o o t n o t e 41, p . 1 6 8 ; Vogel, Op. Cit., f o o t n o t e 41, P. 145.
46~m~er ~d @]dr ing, op. cit ., foot not e q 1, P. 172.
4TSheme] ~d fiasi]ovsky, op. cit ., foot not e 40, p. 10.
4EIVOP1, op. cit ., foot not e 41, pp. 15~-154.
4gMat er ial t aken fr om Bomser and Goldr ing, op. cit ., foot not e 41, p. 172; Shemel and Kr asilovsky, op. cit ., foot not e 40, pp. 12-13.
~~mser & ~]dr ing, op. cit ., f~t not e 41, p. 172; Shemel ~d Kr asilovsky, W. cit ., foot not e 40) P. 12.
S1 H, ~wn, ~ ]et t er t . J . Winst on, OTA, Ma
y
2, 1989. Enc]osur e wit h comment s on dr afl ch. 3, p. 18.
52H. ~sen , ~, ]et t er t . J Winst on, OTA, May 2, 1989. Enc]osur e wit h comment s on dr afl Ch. 3, p. 18.
Mast er ing r oom
mot ional video. Music videos have pr oduct ion
cost s of appr oximat ely $50,000 t o $80,000 for
new ar t ist s, and ar ound $130,000 t o $250,000
or mor e
53
for well-est ablished ar t ist s. Over all,
t he cost s of r ecor ding, manufact ur ing, adver -
t ising, pr oducing a video, a nd pr omot ing a n
a lbum ca n r un a nywher e fr om $300,000 t o
$750,000 or mor e.
54
The ar t ist does not nor mally r eceive income
fr om t he sale of his r ecor dings unt il all r ecor d-
ing and some ot her cost s ar e r ecover ed.
55
Ther efor e, an ar t ist , especially one who is just
beginning, may need financial assist ance t o
cover expenses. The r ecor ding company will
oft en advance payment s t o t he ar t ist t o assist
wit h init ial expenses. The size of an advance
var ies wit h each ar t ist and each sit uat ion. In
pr inciple, t hese advances ar e r ecoupable fr om
fut ur e r oyalt ies, but accor ding t o RIAA, ar t -
ist s ar e seldom for ced t o r epay t he advance if a
53H. ~sen , I /MA, l et t er t o J . Winst on, OTA, May 2, 1989. Enclosur e wit h comment s on dr all ch. 3, p. 19.
54H. ~Wn, R~, let t er t . J , Winst on, OTA, May 2, 1989. Enc]osur e wit h comment s on dr aft ch. ~, p. 18.
551n addition t. rwordingcosts, the rworr] company may be able to r~over ~la] ~work, pr omot ion], packaging, and/or adver t is-
ing fees.
r ecor ding does not sell.
56
Many albums do fail
t o r ecoup t heir r ecor ding cost s; t he r ecor ding
indust r y est imat es t hat 85 per cent of all pop
albums and 95 per cent of all classical t it les fail
t o r ecover t heir cost s.
57
In addit ion, some cont r act s may allow t he
r ecor ding company t o r ecover it s cost s for all
pr ior r ecor dings made by t he ar t ist . In ot her
wor ds, if t he ar t ist had r ecor ded t hr ee pr evi-
ous albums for which t he r ecor ding company
had been unable t o r ecoup cost s, t he company
might be able t o r ecoup all losses befor e pay-
ing out any of t he r oyalt ies made fr om t he last
and only successful album. Whet her t his is t he
case depends on cont r act negot iat ions and t he
r elat ive bar gaining power of t he ar t ist ; ac-
cor ding t o t he RIAA it seldom occur s.
58
WH. ~wn, RIAA, ]et ~r t o J . Winst on, OT~ May 2, 1989. Enclosur e wit h comment s on dr aft ch. 3, p. 20.
S7whit e, op. cit ., fOOt nOt e 3
7
, P. 35
S8M. cover , hor ding Indu@V ~=iat ion of ~er im, t e]ephone ~nver ~t ion wit h D. Wong, OT~ May 11, 1989.
Ch a p t er 5
Cop yr i gh t Roya lt i es for
Mu si c a n d Sou n d Recor d i n gs
CONTENTS
Pa ge
ROYALTIES FROM THE SALE OF RECORDINGS . . . . . . . . . . . . . . . . . . . . 103
Recor ding Cont r act s and Royalt ies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Recor ding Cont r act s. ...o. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Royalt y Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Royalt ies Fr om t he Sale of CDs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
ROYALTIES FROM MUSIC USED IN RECORDINGS . . . . . . . . . . . . . . . . . . 109
Compulsor y Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Mechanical Royalt ies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Har r y Fox Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
ROYALTIES FROM THE PERFORMANCE OF RECORDED MUSIC . . . . . 111
Per for ming Right s Societ ies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Songwr it er Or ganizat ions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Copyr ight Royalt y Tr ibunal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
PERFORMANCE RIGHTS IN SOUND RECORDINGS . . . . . . . . . . . . . . . . . 117
Per for mance Right s Under U.S. Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Ar gument s for and Against Per for mance Right s . . . . . . . . . . . . . . . . . . . . 119
ROYALTIES FROM HOME TAPING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Pr oposals for a Home-Taping Levy in t he Unit ed St at es . . . . . . . . . . . . . . 120
Int er nat ional Per spect ives on Tape Levies . . . . . . . . . . . . . . . . . . . . . . . . . 120
5-A
5-B.
5-c.
5-D.
5-E.
T a bl e
5-1.
5-2.
5-3.
B o x e s
Pa ge
Per for ming Right s Societ ies: Logging Pr ocedur es . . . . . . . . . . . . . . . . . . 116
Per for ming Right s Societ ies: Dist r ibut ion of Royalt ies t o Member s . . . 118
How Per for mance Royalt ies Ar e Dist r ibut ed in Ot her Count r ies . . . . . 121
Copyr ight Clear ance Cent er . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Det ails of Pr oposed Blank-Tape Levy in S.1739 . . . . . . . . . . . . . . . . . . . 124
T a bl es
Pa ge
Pr ivat e Copying Royalt ies - Legislat ion and Implement at ion . . . . . . . . 132
Taxat ion on Pr ivat e Copying . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Pr ivat e Copying Royalt ies - Dist r ibut ion . . . . . . . . . . . . . . . . . . . . . . . . . 134
Ch a p t er 5
Cop yr i gh t Roya lt i es for Mu si c a n d Sou n d Recor d i n gs
A r oyalt y is a payment made t o a copyr ight
owner or per for mer for t he use of his pr op-
er t y. It maybe based on an agr eed-on per cent -
age of t he income ar ising fr om t he use of t he
pr oper t y or on some ot her measur e. This
chapt er descr ibes t he differ ent syst ems t hat
have been devised or pr oposed t o collect and
dist r ibut e r oya lt y pa yment s t o copyr ight
owner s and per for mer s.
The fir st sect ion addr esses how r ecor ding
companies pay r oyalt ies t o per for mer s.
The second sect ion discusses how copy-r ight
owner s of musical wor ks (e.g. songwr it er s,
publisher s) collect r oyalt ies on compulsor y
and mechanical licenses gr ant ed t o t he
companies t hat make r ecor dings of t heir mu-
sic. It also examines how t hese copyr ight own-
er s r eceive r oyalt ies fr om public per for m-
ances of t heir r ecor ded music.
Var ious per for ming r ight s or ganizat ions
collect and dist r ibut e r oyalt ies. The t hir d sec-
t ion descr ibes t hese or ganizat ions and t he
mechanisms t hey use t o pr ovide t hese ser v-
ices.
In t he Unit ed St at es, copyr ight owner s of
sound r ecor dings (e.g., r ecor d companies, per -
for mer s) do not have t he r ight t o be compen-
sat ed for public per for mances of t heir wor k.
The four t h sect ion discusses t he ar gument s
for and against pr oviding compensat ion t o
copyr ight owner s in sound r ecor dings.
As home copying has become mor e pr eva-
lent , t her e have been pr oposals in t he Unit ed
St at es t o place a fee on blank t apes or r ecor d-
ing equipment t o compensa t e composer s,
aut hor s, musicians, ar t ist s, r ecor ding compa-
nies, and pr oducer s or pr oduct ion companies
for pr ivat e copying. The final sect ion pr ovides
a det ailed discussion of one pr oposed blank-
t ape levy scheme and t he pr oposed syst em for
allocat ing t he r oyalt ies it would gener at e. In
addit ion, t he final sect ion over views t ape-levy
schemes eit her pr oposed or implement ed in
Fr ance, Aust r alia, Belgium, t he Unit ed King-
dom, Hungar y, Iceland, West Ger many, and
Sweden. Tape-levy schemes for Aust r ia, Fin-
land, Por t ugal, Spain, and Nor way ar e also
consider ed.
ROYALTIES FROM THE SALE
OF RECORDINGS
Recor ding ar t ist s ar e compensat ed in t hr ee
ways for t heir ser vices. First, t hey ar e paid un-
ion scale for t heir per for mances as det er -
mined, for vocalist s by t he Amer ican Feder a-
t ion of Television and Radio Ar t ist s (AFTRA)
and, for inst r ument alist s by t he Amer ica n
Feder at ion of Musicians (AFM). Rat es for fea-
t ur e ar t ist s ar e negot iable; backups ar e cov-
er ed by labor agr eement s.
2
S econd, ar t ist s ar e
eligible t o r eceive a shar e of t he r oyalt ies fr om
t he sale of t he r ecor ding. This shar e is det er -
mined by t he cont r a ct ua l a gr eement negot i-
at ed eit her bet ween t he ar t ist and t he r ecor d-
i n g compa n y or t h e a r t i s t a n d h i s or h er
pr oducer , depending on t he t ype of cont r act s
Third, ar t ist s r eceive advances, r anging fr om
Mat er ial for t his sect ion is incor por at ed fr om: Alan H. Bomser and Fr ed E. Goldr ing, Cur r ent Tr ends in Recor d Deals, 1984
En t er t a i n m en t , Pu bl i sh i n g, a n d t h e Ar t s Ha n d book , Michael Myer and J ohn David Vier a (eds.) (New Yor k, NY: Clar k Boar d man Com-
pany, Lt d., 1984), pp. 167-173; Sidney Shemel and M. William Kr asiloVsky, Th i s Bu si n ess of Mu si c (New Yor k, NY: Billboar d Publica-
t ions, 1985) (wit h 1987 updat e) ;Alan Siegal, (Si Si)J e Suis un ~kSt ~,B~hingin t o t he~usic Business (por t Chest er , NY: Cher r y
Lane Books, 19S6), pp. 89-133; Har old Vogel, The Music Business, En t er t a i n m en t I n d u st r y Econ om i cs: A Gu i d e f or Fi n a n ci a l An a l y-
si s (New Yor k, NY: Cambr idge Univer sit y Pr ess, 1986), pp. 131- 157; Dick Weissman, Recor d Company Cont r at is, The Music ~ust -
n ess: Ca r eer Oppor t u n i t i es a n d S el f -Def en se (New Yor k, NY: Cr own Publisher s, Inc. 1979), pp. sz-~g; Adam whit e (~.), lnsi~ t he
Recod i n g I n d u st r y. -An I n t r od u ct i on t oh er l m .v Mu t si c Bu si n evs (Washingt on, DC: Recor d ingIndust r y Associat ion of Amer ica, 1988);
and int er views wit h r ecor d company execut ives.
ZJ . ~]~ner , ~r son~ communicat ion, advisor y panel meet ing at OTA, Apr . 2A, 1989.
3
See ch. 4 for a mor e det ailed descr ipt ion of r ecor ding cont r act s.
103
104 q Copy right and Hom e Copyi n g: Tech n ol ogy Ch a l l en ges t h e La w
$15,000 t o well over $1,000,000 for est ab-
lished a r t ist s, t o help t hem wit h init ia l ex-
penses.
4
These advances ar e, however , r ecoup-
able fr om t he ar t ist s fut ur e ear nings.
R ecor d i n g Con t r a ct s a n d R oya l t i es
The four gener al t ypes of r ecor ding con-
t r act s t ypically used in negot iat ions, eit her be-
t ween t he ar t ist and t he r ecor ding company or
t he ar t ist and t he pr oducer , ar e convent ions
agr eed t o by bot h par t ies befor e wor k com-
mences on a par t icular albums The ar t ist s
bar gaining power may be cont ingent on such
fact or s as whet her he is a beginning ar t ist or a
super st ar . Each t ype of cont r act st ipulat es
what r equir ement s each par t y must fulfill and
how payment is t o be made t o t hose ent it led
t o a shar e of t he r oyalt ies.
R ecor d i n g Con t r a ct s
In t he exclusive artist r ecor ding cont r act ,
wher e t he r ecor ding company dir ect ly signs
t he ar t ist t o t he label, t he r ecor ding company
pays all cost s of pr oduct ion and advances
some money t o t he ar t ist t o help him pay for
init ial expenses. The ar t ist r eceives r oyalt ies
dir ect ly fr om t he r ecor ding company, but only
aft er all pr oduct ion cost s and advances have
been r ecover ed.
In t he all-in artist contract, t he ar t ist is
signed t o t he r ecor ding company, but fur -
nishes his own independent pr oducer . Royal-
t ies fr om t he sales of r ecor dings (aft er all cost s
and advances ar e r ecouped) ar e paid dir ect ly
t o t he ar t ist , who t hen pays t he pr oducer fr om
his shar e. The aver age r oyalt y for a beginning
pop/r ock ar t ist is 12 t o 13 per cent of t he r et ail
sale pr ice, wit h 2 t o 3 per cent of t hat going t o
t he pr oducer ; for a well-known ar t ist , t he
minimum is 14 t o 15 per cent , and oft en 17 t o
20 per cent ,
6
wit h 4 per cent going t o t he pr o-
ducer .
7
These r at es, however , may escalat e af-
t er a specified number of sales.
In t he production contract, t he r ecor ding
ar t ist wor ks wit h an independent pr oduct ion
company, which t hen signs wit h a r ecor ding
company. The pr oduct ion company pays for
t he cost s of t he demos or mast er s, which
ar e t hen submit t ed t o t he r ecor ding company.
The r ecor ding company pays all cost s of pr o-
duct ion eit her dir ect ly or indir ect ly: it eit her
advances funds t o t he pr oduct ion company or
pays t he cost s dir ect ly. The pr oduct ion com-
pany, pr oducer , and/or t he ar t ist may als o be
gr ant ed an advance t o help cover any addi-
t ional cost s. Aft er all cost s ar e r ecover ed and
all advances ar e r ecouped, t he r ecor ding com-
pany pays t he pr oduct ion company an all-in
r oyalt y, out of which t he pr oduct ion company
pays t he ar t ist and/or pr oducer . The ar t ist and
pr oducer ar e paid t he per cent age of t he r oyal-
t ies st ipulat ed in t heir cont r act s.
8
Roya lt y
payment s for t he ar t ist t ypically r ange fr om
10 t o 12 per cent of t he 13 t o 18 per cent t hat
t he pr oduct ion company r eceives fr om t he r e-
cor ding company.
9
Under t er ms of a master purchase contract,
t he pr oduct ion company sells t he mast er s of a
sound r ecor ding t o t he r ecor ding company.
The pr oduct ion company is r eimbur sed for all
cost s incur r ed in t he manufact ur ing of t he
mast er s. Befor e any r oyalt ies ar e paid t o t he
pr oduct ion company, however , t hese cost s
H. Rosen, Recor ding Indust r y Associat ion of Amer ica, let t er t oJ . Winst on, OTA, May 2, 1989. Enclosur e wit h comment son dr aflch.
4, p. 1.
3H. ~~n, FUAA, let t er t o J . Winst on, OT~ May 2, 1989.
BH. ~Wn, ~ let t er t o J . Winst on, OT~ May 2, 1989. Enclosur e wit h comment s on dr afl ch. 4, p. 2-
T~t iing ~ompy exmt ive, ~r son~ communicat ion, Feb. 29, 1988.
8H- ~=n, ~ ]et t er t . J . Winst on, OTA, Ma
y
2, 1989. Enclo~r e Mt h comment s on dr afl ch. 4, p. 3.
Ibid.
Chapter 5Copy right Roy alties for Mus ic and Sound Recordings q 1 0 5
Photo Credit: The Robb Family, Cherokee Recording Studio
Modem r ecor ding st udio.
and any ot her advances paid t o t he pr oduct ion
company must be r ecouped. Then, t he pr o-
duct ion company r eceives r oyalt ies based on
100 per cent of t he r ecor dings sold, which usu-
ally account for 85 t o 90 per cent of ship-
ment s.
10
The ar t ist , in t ur n, is paid t hr ough
his pr oduct ion company.
R oya l t y Ba se
Royalt ies ar e eit her based on t he manufac-
t ur er s suggest ed r et ail list pr ice (e.g., $8.98)
or ar e doubled when based on t he wholesale
pr ice ($3.90 t o $4.00), which could r esult in
near ly a 28-per cent r at e for t he ar t ist (since
wholesaling does not involve any packaging
deduct ions).
11
Recor ding compa nies pa y r oya lt ies not on
t h e n u mber of r ecor di n gs s h i pped, bu t on
t hose r ecor dings a ct ua lly sold.
12
Most r ecor d-
ing companies will also wit hhold a cer t ain per -
ce n t a ge of r oya l t i e s f or wh a t t h e y ca l l
Ibid.
I I ~m~erand ~]dring, ~p. ~it.,fmtnote ], p. 170, r=ord Compny ex~utive, person~communication, F e b . 2 9 , 1 9 8 8 .
Izsheme] ~d Krasi]ovsky, op. cit ., fOOt nOt e 1, p. 4.
20-900 - 89 - 4
r easonable r et ur ns in ant icipat ion of unsold
r ecor dings likely t o be r et ur ned. If r ecor dings
ar e not r et ur ned, r oyalt ies ar e paid.
13
Oft en-
t imes, r et ur ned r ecor dings ar e eit her r ecycled
or r edist r ibut ed at r educed pr ices. The ar t ist
r eceives minimal or no r oyalt ies on r edist r ib-
ut ed albums, since t hey ar e sold at t he manu-
fact ur ing cost or less.
14
Ar t ist s r eceive no r oyalt ies on r ecor dings
given t o r adio st at ions or r ecor d st or es for
pr omot ion. Recor ding companies believe t hat
t hese fr ee pr omot ional albums expose t he r e-
cor ding t o a wider audience, which may t hen
pur chase it s own copies.
Re c or d Cl u b Sa l e s
15
Ar t ist s ar e usually paid half of t he r ecor ding
companys r eceipt s for r ecor d club sales,
16
and
no r oyalt y on bonus or fr ee albums given
away t o t he clubs subscr iber s. Recor d clubs
nor mally obt ain a license for t he mast er s and
pay a r oyalt y t o t he r ecor ding company based
on 85 per cent of sales a r oyalt y of appr oxi-
mat ely 9.5 per cent of t he clubs member pr ice,
less a packaging deduct ion.
17
Recor d club
owner s ar gue t hat t hey should not have t o pay
r oyalt ies for fr ee albums since t hey ar e pr o-
viding t he r ecor ding company wit h an alt er na-
t ive means for dist r ibut ion. They deem it nec-
essar y t o make special offer s and bonuses as
incent ives t o subscr iber s because of lar ge
member ship t ur nover s. An ar t ist can, how-
ever , negot iat e a clause in t he cont r act t hat
limit s t he number of albums t hat can be given
away as bonuses.
F or e i gn Sa l e s
Royalt ies fr om for eign sales ar e usually
comput ed at a r at e appr oximat ely half t hat of
sales in t he Unit ed St at es. The lower for eign
r oyalt y r at e r eflect s t he fact t hat companies
wit hout for eign affiliat es must lease t heir
pr oduct s t o ot her fir ms for for eign dist r ibu-
t ion. The U.S. r ecor ding company r eceives t he
r oyalt ies and t hen dist r ibut es a por t ion t o t he
ar t ist based on 100 per cent of sales. In cases
wher e t he company has it s own for eign sub-
sidiar y, t her e is no r oyalt y paid t o a t hir d
par t y, and t he ar t ist r eceives up t o 75 per cent
of t he domest ic r at e. Some companies wit h
t heir own for eign affiliat es may lease t heir
pr oduct s t o a subsidiar y if it is believed t hat
t he pr oduct will not sell in t he for eign t er r i-
t or y.
18
P a c k a g i n g
Packaging deduct ions ar e par t of t he con-
t r act negot iat ions and may var y consider -
ably.
19
Deduct ions t ypically r ange fr om 10 t o
12 per cent of t he r et ail pr ice for r ecor ds, 15 t o
20 per cent for casset t es, and 25 t o 30 per cent
for compact disks, depending on t he cost of
t he cover and ar t wor k.
20
Since t he r ecor ding
company assumes t he packaging cost s, it be-
lieves t hat t he ar t ist should be paid r oyalt ies
only on t he music and not on t he ar t wor k. Yet ,
except in inst ances wher e t her e ar e ver y low
r ecor d or t ape sales, t he cost s for t he cover and
ar t wor k ar e much lower t han t he packaging
deduct ion.
21
13H. ~=n, ~ ]et t er t o J . Winst on, OTA, May 2, 1989. Enclosur e wit h comment s on dr t i ch. 4, p. 4.
Ibid.
13Mat er i~ ~en fr om Sheme] and Kr asilovsky, OP. cit ., foot not e 1, p. 57.
IBH. fisen, ~ ]et t er t o J . Winst on, OTA, May 2, 1989. Enclosur e wit h comment s on dr aft ch. 4, p. 5.
1 TSheme] and Kasi]ovsky, op. cit ., fmt not e l) P 57.
16Weissm~, op. cit ., foot not e IJ P-
55
19H. ~sen, ~ ]etter t. J. Winston, OT~ May z, 1989. Enc]o~re ~th ~mments on dr aft ch. 4, p. 6.
~~m ser ~d &l d r @, op. cit ., foot not e 1, P. 170.
2Ibid.
Chapter 5Copy right Roy alties for Mus ic and Sound Recordings . 107
R oya l t i es Fr om t h e S a l e of CDs
22
When compact discs (CDs) wer e fir st int r o-
duced in t he Unit ed St at es in 1983, t heir r et ail
selling pr ice was somewher e in t he 30 dollar
r a ng
23
because of t heir high manufact ur ing
and pr oduct ion cost s. Since r ecor ding compa-
nies did not expect a high volume of CD sales
for t he fir st few year s, t hey paid t he same r oy-
alt y on CDs t hat t hey paid on compar able vi-
nyl LPs, r egar dless of t he differ ences in t heir
pr ices. They usually followed t his pr act ice for
t he fir st 3 year s of t he cont r act , aft er which
t hey r enegot iat ed t he r oyalt y on CD sales t o
r eflect any changes in t he mar ket place.
24
Some companies, however , r enegot iat ed r at es
3 year s fr om t he r elease of t he ar t ist s fir st CD
r at her t han fr om t he beginning of t he cont r act
per iod.
25
Recor ding companies deduct ed 25
per cent for packaging, a higher per cent age
t han t he t ypical deduct ion for convent ional
LPS.
26
This pr act ice cont inued for 2 or 3 year s.
Some successful ar t ist s wer e able t o negot iat e
a favor ed-nat ions clause t hat would aut o-
mat ically incr ease t heir r oyalt y payment s if
t he r ecor ding company incr eased it s r oyalt y
r at es for newly signed ar t ist s.
Recor ding companies have r ecent ly had t o
r econsider t he issue of CD r oyalt ies. Wit h t he
init ial cost s of r esear ch and development now
r ecover ed, t he cost of r aw CD pr oduct ion has
dr opped.
27
Pr ice mar gins ar e decr easing
28
and
manufact ur ing cost s for t he discs t hemselves
ar e down t o about $1.29 As a r esult , CD pr ices
ar e gr adually beginning t o dr op as sales r ise.
The for mat s enor mous success has come in
lar ge par t fr om sales t o r elat ively affluent ,
older consumer s who pur chase CD player s
and t hen r eplace t heir favor it e LPs wit h CDs.
Wit h higher pr ofit mar gins t han r ecor ds or
t apes, CDs have become t he most pr ofit able
for mat for companies: a CD t hat may have
cost $5 t o $6 t o pr oduce and dist r ibut e will sell
for $10 or mor e. Ar t ist s ar e beginning t o de-
mand higher r at es for CD r oyalt ies now t hat
t he cont r act ual clauses allowing for aut o-
mat ic incr eases ar e beginning t o expir e.
30
Recor ding companies, for ced t o r eevaluat e
t heir r oyalt y payment syst ems, face sever al
pr oblems. Fir st , t her e ar e no suggest ed r et ail
list pr ices per se for most CDs,
31
as compar ed
t o t he suggest ed r et ail pr ices list ed for LPs.
Most r ecor ding companies pay a r oyalt y r at e
on LPs based on t heir suggest ed r et ail list
pr ices, which r emain fair ly const ant , r at her
t han on t heir wholesale pr ices, which con-
st ant ly change. Using t his r oyalt y basis,
wholesale pr ices can be r aised wit hout affect -
ing r et ail pr ices. For CDs wit hout a suggest ed
r et ail pr ice, however , t he r ecor ding companies
base r oyalt ies on t he const ant ly changing
wholesale pr ices of CDs.
22Mat er ia] for t his ~=t ion ~a~ ~en f
r om:
St eve Fiot t , ~]wat lon of Independent s, @$~l Au&o, VO]. 5, No. 3, November 1988, p.
36, Sidney Shemel and M. William Kr asilovsky, Th i s Bu si n ess of Mu si c, op. cit ., foot not e 1, pp. 7-8; J ean Rosenblut h and Ken Ter r y,
CD Royalt ies on t he Upswing: Most Act s Benefit Fr om Lower Cost s, Bi l l boa t i , vol. 100, No. 4, J an. 23, 1988, pp. 1, 84; Alan Siegal,
(Si Si) J e Suis un Rock St ar , op. cit ., foot not e 1 , pp. 120-123, and int er views wit h r ecor d com~y execut ives.
23Siegal, (Si Si) J e Suis un Rock St ar , op. cit ., foot not e 1, p. 121.
z4~1d., p. 121; int er view.
ZsSleW], ~t (si S1) J
e
Suis un ~k St ar , Op. Cit ., foot not e ~) P. 121.
zGSheme] and fiasi]ovsky, op. cit ., foot not e 1, p. 7, R.menblut h and Ter r y, op. cit ., foot not e 22, P. 84.
27Fiot t , op. cit ., fOOt nOt e 22, P 36
zaIbid.
awcor d ~ompy exWut ive, ~r sona] communicat ion, J une 21, 1988.
O~senblut h and Ter r y, op. cit ., foot not e 22, pp. 1, 84, int efiew.
31 The fo]]o~ng is bas~ on ~r ~ona] communicat ion Wit h a r ecor d company exmlt ive, Dec. 13, 1988.
Ther e was some disagr eement among advisor y panel member s as t o t he pr evalence of CD list pr ices and t he degr ee t o which t hey
cor r espond t o r et il pr ices.
108 . Copy right and Home Copy ing: Technology Challenges the LAw
Photo Credit: Ed Asmus, Courtesy of MTS, Inc.
Compact discs have become a pr ofit able for mat
The pr oblem is fur t her complicat ed be-
cause r ecor ding companies char ge var ious
dist r ibut or s differ ent pr ices. Ret ailer s ar e
char ged higher pr ices for it ems t han ar e sub-
dist r ibut or s, since subdist r ibut or s must also
war ehouse t he mer chandise. Subdist r ibut or s
compr ise 95 per cent of a r ecor ding companys
client s; t he ot her 5 per cent ar e r et ailer s. To
compensat e for t he decr ease in r oyalt ies
caused by t he lower pr ices char ged t o sub-
dist r ibut or s (t he cur r ent subdist r ibut or pr ice
is appr oximat ely $9.00),
32
a pr ovision called a
CD uplift is usually applied t o t his pr ice.
The CD uplift incr eases t he wholesale pr ice
125 p er cen t over t h e or i gi n a l wh olesa le p r i ce,
less a p a ck a gi n g d ed u ct i on of a p p r oxi ma t ely
20 t o 25 p er cen t . Usi n g t h e i n cr ea sed wh ole-
sa le p r i ce, t h e r oya lt y r a t e i s t h en ba sed on a
p er cen t a ge of sa les. Th e a r t i st i s p a i d a p er -
cen t a ge of t h a t r oya lt y ba se u su a lly 12 t o 15
p er cen t d ep en d i n g on t h e p r ovi si on s of t h e
r ecor d i n g con t r a ct . No r oya lt i es a r e p a i d on
fr ee or p r omot i on a l cop i es of CDs.
Wit h t he uplift , an ar t ist might ear n mor e
r oyalt ies fr om a pr emium CD t han fr om t he
same analog r ecor ding.
33
Once a CD is dis-
count ed, however , r oyalt ies may be dr ast i-
sa~or d compny execut ive, per sonal communicat ion, k. 13, 1988.
ss~or d Compy ex~t ive, per sonal communicat ion, J une 21, Iw.
Chapter SCopy right Roy alties for Mus ic and Sound Recordings q 1 0 9
cally r educed.
34
As in t he case of LP album
cut -out s, t he ar t ist is ent it led t o only half of
t he full r oyalt y r at e, less a packaging deduc-
t ion.
In gener al, r ecor ding indust r y obser ver s see
CD r oyalt y r at es cont inuing t o r ise, especially
now t hat t he init ial r esear ch and development
cost s of t he CD have been wr it t en off.
35
ROYALTIES FROM MUSIC
USED IN RECORDINGS
Com pu l sor y Li cen ses
36
The Copyr ight Act of 1976 gr ant s t he copy-
r ight owner of a musical composit ion t he ex-
clusive r ight t o be t he fir st t o r ecor d and dis-
t r i b u t e p h on or e cor d s of t h e p r ot e ct e d
composit ion wit hin t he Unit ed St a t es, or t o
a ut hor ize ot her s t o r ecor d a nd dist r ibut e.
37
Once t ha t r ight ha s been exer cised, a nyone
who makes and dist r ibut es a compet ing r en-
dit ion of t he musica l composit ion must ob-
t a i n wh a t i s ca l l ed a compu l s or y l i cen s e
fr om t he copyr ight owner and must pay r oyal-
t ies on phonor ecor ds ma de a nd dist r ibut ed
under t he license. While ensur ing copyr ight
owner s t he oppor t unit y t o be t he fir st t o r e-
cor d and dist r ibut e t heir wor ks and pr oviding
t hem pa yment for a ll subsequent uses, t he
compu l s or y l i cen s i n g s ys t em a l s o pr even t s
copyr ight owner s fr om monopolizing t he fu-
t ur e use of a musical composit ion.
Licenses set for t h t he condit ions and r oyal-
t ies for each r ecor ding made and dist r ibut ed.
The new r ecor ding must be dist inguisha ble
fr om t h e or igin a l-du plica t ion or dir ect
r er ecor ding of t he or iginal wit hout per mis-
sion of t he copyr ight owner const it ut es copy-
r ight infr ingement . In addit ion, t he phono-
r ecor d must be dist r ibut ed t o t he public for
pr ivat e use only. A compulsor y license does
not a ut hor ize t he licensee t o dist r ibut e
phonor ecor ds for commer cial use, such as
ba ckgr ound music ser vices, nor does it
aut hor ize t he public per for mance of t he musi-
cal composit ion.
To obt ain a compulsor y license, t he in-
t ended user must not ify t he copyr ight owner
wit hin 30 days aft er t he phonor ecor ds ar e
manufact ur ed and befor e t hey ar e dist r ib-
ut ed. If t he copyr ight owner is not known, t he
licensee files a not ice wit h t he U.S. Copyr ight
Office. Gener ally, a copyr ight owner must be
ident ified in t he r egist r ar or ot her public r e-
cor ds of t he Copyr ight Office in or der t o col-
lect r oyalt ies fr om a compulsor y license.
Alt hough t he int ended pur pose behind t he
compulsor y license was t o encour age t he flow
of cr eat ivit y by ensur ing cer t ain r ight s t o t he
copyr ight owner , some people t hink t hat com-
pulsor y licenses r est r ict cr eat ivit y. Canada r e-
cent ly abolished t heir compulsor y license for
just t his r eason.
38
Mech a n i ca l R oya l t i es
Recor d companies must make aut omat ic
payment s t o songwr it er s and publisher s for
t he r ight t o make and sell copies of t heir r e-
cor ded wor ks. A copyr ight owner r eceives a
st at ut or y r oyalt y r at e depending on t he lengt h
of t he song, t he number of songs on t he al-
aA~senb]ut h and Ter r y, op. cit ., foot not e 22, P. ~.
351bid.
36 Mat er i~ for t his -t ion is t aken fr om: ~~fi Thor ne, Compu]soW Licensing The Music Maker s as Money Maker s, 1985~nter-
t a i n m en t , Pu bl i sh i n g a n d t h e Ar t s Ha n d book , J ohn David Vier a and Michael Meyer (eds. ) (New Yor k, NY: Clar k Boar d man Co., Lt d.,
1985), pp. 281-294.
aTTit ]e 17, U.S. Code, sect ion 115.
~SW mem~r of Copyr ight Oflice, per sonal communicat ion, Feb. 6, 1989.
bum, and net sales of t he r ecor ding.
39
These
deduct ions, called mechanical r oyalt ies, ar e
t aken fr om t he r ecor d companys r eceipt s,
and not fr om t he ar t ist s shar e.
40
The Copyr ight Royalt y Tr ibunal det er -
mines mechanical r oyalt y r at es, which it ad-
just s ever y 2 year s on t he basis of t he Con-
sumer Pr ice Index. The cur r ent r at e is 5.25
cent s for each musical composit ion or one
cent per minut e or fr act ion t her eof, whichever
is gr eat er . The r at e cannot be adjust ed below 5
cent s per musical composit ion or .95 cent s per
minut e, nor can it r ise mor e t hat 2 per cent per
adjust ment per iod.
41
Compulsor y mechanical license fees ar e sel-
dom set at t he st at ut or y level, however . The
user can oft en negot iat e a lower r at e wit h t he
copyr ight owner . For example, when t he
owner is r elat ed t o t he r ecor ding ar t ist , t her e-
cor d company may pay r at es only t hr ee-quar -
t er s of t he st at ut or y r at e. Also, cer t ain classes
of r ecor dings, such as r ecor dings dist r ibut ed
fr ee, may be exempt ed.
42
In addit ion, an ar t -
ist s cont r act oft en pr ovides for fut ur e songs
eit her wr it t en or cowr it t en by him t o be
br ought under t he r ecor ding companys con-
t r ol. Recor ding companies oft en secur e r e-
duced mechanical r oyalt y r at es for t hese con-
t r olled composit ions.
Ha r r y Fox Agen cy
43
The Har r y Fox Agency was est ablished in
1927 and is a wholly-owned subsidiar y of t he
Na t ion a l Mu s ic Pu blis h er s As s ocia t ion
(NMPA).
44
It cur r ent ly r epr esent s over 6,000
publisher s, not all of whom belong t o NMPA.
The agency is r esponsible for aut hor izing r e-
cor ding companies t o make and dist r ibut e
phonor ecor ds of copyr ight ed music owned or
cont r olled by t he publisher s. It licenses ap-
pr oximat ely 75 per cent of U.S. music on r e-
cor ds, t apes, CDs, a nd impor t ed phono-
r ecor ds, plus music used in films, on T.V., or
in commer cials. The agency also collect s and
dist r ibut es mechanical r oyalt ies for most U.S.
publisher s.
The Har r y Fox Agency licenses copyr ight ed
musica l composit ions for commer cia l r e-
cor ds, t apes, CDs, et c. dist r ibut ed:
t o t he public for pr ivat e use;
for use in audio/visual wor ks (synchr oni-
zat ion), including mot ion pict ur es,
br oadcast and cable T.V. pr ogr ams, and
CD videos;
for use in br oadcast commer cial adver -
t ising;
sgNet ~]es eW~ ~OSS ~es, ]ess r et ur ns. Recor d compan
y
execut ive, per sonal communicat ion, J une 2, 1989.
4CI H. ~sen , R I @]et t er t ,o J . Winst on, OTA, May 2, 1989. Enclosur e wit h comment s on dr afl ch. 4, P. 13.
4 The Har r y Fox Agency, Inc.: Licensing Ser vice of t he Nat ional Music Publisher s Associat ion, pamphlet published by t he Har r y
Fox Agency, Inc., 1988, p. 6.
Qz~an H. sled, Lexicon P]us,
Bn xa k i n g i n t o t h e Mu si c Bu si n ess (Por t Chest er , NY: Cher r y Lane Books, 1986), p. 14.
dsThe fo]]owing is t ~en fr om mat er i~ cont iined in Shemel and Kr asilovsky, op. cit ., foot not e 1; The *W FOX Agency, Inc.: Licens-
ing Ser vice of t he Nat ional Music Publisher s Associat ion, op. cit ., foot not e 41; and The Nat ional Music Publisher s Associat ion,
pamphlet published by t he Nat ional Music Publisher s Associat ion.
44The Nation~ Mu5ic ~bli5her5~ A5m1ation i5 one of t hr = music publishers trade associations in the united St at es. The ot her
t wo ar e: t he Music Publisher s Associat ion of t he U. S., specializing in educat ional and concer t music, and t he Chur ch Music Publish-
er s Associat ion.
for use in r ecor dings for public use (i.e.,
backgr ound music, in-flight music, com-
put er chips, syndicat ed r adio ser vices,
and even novelt y gr eet ing car ds).
It also licenses per for ming r ight s for t heat r i-
cal mot ion pict ur es in t he Unit ed St at es.
In addit ion t o issuing licenses and collect ing
r oyalt ies, t he Har r y Fox Agency r epr esent s
publisher s in pr oceedings against delinquent
licensees and infr inger s, and audit s all li-
censed r ecor d companies and licensees who
use copyr ight ed musical composit ions. The
agency ser ves as an infor mat ion sour ce, clear -
inghouse, and monit or ing ser vice for licensing
musical copyr ight s. It maint ains ext ensive
files of infor mat ion on t he public domain
st at us of composit ions for pur poses of issuing
licenses. It also wor ks wit h t he int er nat ional
collect ion societ ies.
The Har r y Fox Agency r et ains a commis-
sion fr om t he r oyalt ies collect ed on behalf of
it s member s: 4.5 per cent fr om mechanical li-
censes fr om music; 10 per cent on synchr oni-
zat ion licenses for films, wit h a maximum of
$250 per composit ion; 10 per cent of r oyalt ies
on T.V., home video, and commer cial syn-
chr onizat ion licenses, wit h a maximum of
$2,000 per composit ion; and 10 per cent on
elect r ical t r anscr ipt ion licensing (syndicat ed
r adio, backgr ound music, et c.), wit h a maxi-
mum of $2,000 per composit ion.
ROYALTIES FROM THE
PERFORMANCE OF
RECORDED MUSIC
The 1976 Copyr ight Act gives copyr ight
owner s t he exclusive r ight t o per for m t heir
wor ks publicly. The Act defines a public
per for mance as one per for med or displayed in
a place open t o t he public or a place wher e a
subst ant ial number of per sons out side of a
nor mal cir cle of family and social acquain-
t ances is gat her ed, or any per for mance t hat is
t r ansmit t ed or ot her wise communicat ed t o
t he public, by any means or pr ocess, r egar d-
less of whet her t he public r eceives t he t r ans-
mission in t he same locat ion or t ime as t he
or iginal per for mance.
45
Musical wor ks ar e included as par t of t his
r ight , but sound r ecor dings ar e not . Thus, t he
copyr ight owner of a r ecor ded song, such as
t he composer or music publisher , is ent it led
t o be compensat ed for public per for mances,
wher eas t he copyr ight owner of t he sound r e-
cor ding, such as a r ecor d company, is not . Vir -
t ually ever y user ot her t han t he copyr ight
owner who publicly per for ms music must ob-
t ain a license fr om t he copyr ight owner , or be
liable for infr ingement . The user is obligat ed
t o seek out t he copyr ight pr opr iet or and ob-
t ain per mission, or t o cont act t he appr opr iat e
per for ming r ight s societ y t o obt ain a license.
46
a5Tit ]e 17, U.S. Code, ~. 1O1.
46&r nar d ~r man ~d I, Fr ~ ~ni~~r g, per for ming Right s in Music ~d per for ming Right s Societ ies, J ou r n a l of t h e Copy-
r i gh t S oci et y of t h e US A, vol . 33, No. 4, J uly 1986, pp. 347-348.
Per for ming r ight s or ganizat ions wer e cr e-
at d t o make t he licensing of music bot h eas-
ier and mor e economical for t he hundr eds of
t housands of commer cial user s of music.
47
Thr ough t he use of blanket licenses, user s
of music ar e able t o per for m copyr ight ed mu-
sic wit hout having t o negot iat e a separ at e li-
cense wit h each copyr ight owner , or having t o
keep logs t o account for each per for mance.
48
Per f or m i n g R i gh t s S oci et i es
49
Ther e ar e t hr ee per for ming r ight s or ganiza-
t ions in t he Unit ed St at es t he Amer ican So-
ciet y of Composer s, Aut hor s, and Publisher s
(ASCAP), Br oadcast Music Inc. (BMI), and
t he Societ y of Eur opean St age Aut hor s and
Composer s (SESAC). Each has it s own syst em
of det er mining how much air play each r ecor d-
ing r eceives and t o how much of t he collect ed
r evenues each copyr ight owner is ent it led.
ASCAP, founded in New Yor k in 1914, cur -
r ent ly includes appr oximat ely 40,000 com-
poser s, lyr icist s, and music publisher s.
50
It is
t he oldest and lar gest (in t er ms of billings)
51
per for ming r ight s licensing or ganizat ion in
t he Unit ed St at es and is wholly owned and op-
er at ed by it s member s. It s boar d of dir ect or s
includes 12 wr it er dir ect or s, who ar e elect ed
by wr it er member s, and 12 publisher dir ec-
t or s, who ar e elect ed by publisher member s.
Br oadcast Music, Inc.
52
was for med in 1940
by a gr oup of about 600 br oadcast er s who
boycot t ed ASCAP music. BMI st r esses an
open door policy, invit ing all wr it er s t o join,
especially t hose in t he fields of count r y and
soul music. Cur r ent ly, BMI has a member ship
of appr oximat ely 90,000 composer s, wr it er s,
and publisher s and a r eper t oir e of over 1.5
million t it les.
53
It is t he wor lds lar gest music
licensing or ganizat ion in t er ms of member s or
afllliat es.
54
Toget her , ASCAP and BMI collect over 95
per cent of all U.S. per for ming r ight s r oyalt ies.
SESAC, Inc.,
55
which r epr esent s a ppr oxi-
mat ely 2,200 wr it er s and 1,200 publisher s,
collect s t he r emaining 5 per cent of U.S. per -
for min g r igh t s r oya lt ies .
56
SESAC has a
smaller , mor e specialized r eper t or y t han t hat
of ASCAP and BMI
57
about 155,000 songs.
58
Or ganizat ionally, SESAC also differ s fr om
ASCAP and BMI. As a pr ivat e licensing com-
pany owned and r un by t he Heinecke family
since 1930,
59
SESAC, aft er deduct ing oper at -
7
The ASCAP License: It Wor ks for You, pamphlet published by ASCAP; BMI and t he Br oadcast er : Br inging Music t o Amer ica,
pamphlet published by BMI, 1988.
4eKor m~ and Koenigshr g, op. cit ., foot not e 46, p. 335.
4gMat er i~ for t his ~t ion was @ken fr om: Kor man and Koenigsber g, op. cit ., foonot e 46, pp. 332-367; Shemel ~d Kr asilovsky, OP.
cit ., foot not e 1, pp. 182-201.
ASCAP: The Fact s, a pamphlet published by ASCAP, 1987.
51VOW1, op. cit ., foot not e 1, P. 135
52Mat er i~ for t his s=t ion is Men fr om BMI ~d t he Br oadcast er
:
Br inging Music t o Amer ica, op. cit ., foot not e 47.
53BMI and t he Br oadcast er : Br inging Music t o Amer ica, op. cit ., foot not e 47.
54BMI, Your Br idge t o t he Wor lds Gr eat est Music: A Guide t o Music List ening, a pamphlet published by BMI, 1987.
55SESAC, inc. was for mer ]y know as t he &iet y of Eur opem St age Aut hor s ~d Composer s. In t hose days, it s r eper t oir e was
compr ised most ly of Amer ican and Eur opean classics, along wit h r eligious and count r y music. They have since changed t heir name t o
r eflect t he expansion in t heir r eper t oir e t o include all cat egor ies of music. (SESAC: Infor mat ion for Pr ospect ive Wr it er s and Publish-
er s, a pamphlet published by SESAC)
56vOW1, op. cit ., foot not e 1, PP. 135-136.
S7J ack c, @ldst ein, (~For t h
e
~or d: Quest ions ~d Answer s On t he per for m~ce of Copyr ight ed Music (Houst on, ~: Ar nold,
Whit e & Dur kee, 1987), p. 1.
581nt eMew ~t h SESAC execut ive, Feb. 9, 1989.
S.Q~~SESAC: Infor mat ion for Pr osFt ive Wr it er s and Publisher s, a pamphlet published by SESAC.
ing cost s and over head expenses fr om t he
r evenues it collect s, dist r ibut es only half of
t he r emainder t o t he copyr ight owner and r e-
t ains t he balance. GO ASCAP and BMI, on t he
ot her hand, ar e nonpr ofit or ganizat ions. Aft er
deduct ing oper at ing expenses fr om r oyalt y
r evenues collect ed, t hey dist r ibut e t he bal-
ance t o t heir member s or affiliat es.Gl Re-
cent ly, ASCAPs oper at ing expenses have r un
about 18 t o 19 per cent of it s t ot al r evenues
62
and BMIs 15 t o 16 per cent .
63
Li ce n s e s
64
Bot h ASCAP and BMI char ge r adio and
t elevision br oadcast er s a licensing fee based
on a per cent age of t he br oadcast er s net r eve-
nues, r at her t han on t he ext ent of t he use of
t heir music. Br oadcast er s pay fees eit her on a
blanket license, which is based on a small
per cent age of t he net r evenues fr om sponsor s
of all pr ogr ams, or on a per pr ogr am license,
which is based on a lar ger per cent age of net
r evenues, but only on t he specific pr ogr ams li-
censed.
65
Bot h t he blanket license and t he
per pr ogr am license cover t he ent ir e r eper -
t or y of songs for a per iod of year s. BMI also
offer s br oadcast er s a license for noncommer -
cial use and one for noncommer cial educa-
t ional use.
66
SESAC, like ASCAP and BMI, licenses vir -
t ually t he ent ir e br oadcast ing indust r y.
67
But
wher eas ASCAP and BMI base t heir br oadcast
licensing fees on t he gr oss r eceipt s of t he st a-
t ion, SESAC bases it s licenses on fixed det er -
minant s such as st at ion locat ion, hour s of mu-
sic br oadcast ing, and t he st at ions adver t ising
r at es.
Ot her user s of musicbar s, r est aur ant s,
t aver ns, et c. ar e also r equir ed t o obt ain a li-
cense fr om each per for ming r ight s societ y
t hat r epr esent s t he copyr ight holder s of t he
music t hey ar e using. In t he case of live per -
for mances, per for ming r ight s societ ies license
t he est ablishment owner r at her t han t he mu-
sicians because t hey believe t hat it is t he es-
t ablishment owner who der ives t he ult imat e
benefit fr om t he per for ma nce.
68
It is also
mor e pr act ical and much easier t o t r ack per -
for mances in est ablishment s t han t o locat e
and license t he musicians, who ar e r ar ely ever
in t he same place for a long per iod of t ime.
69
Because t hese user s of music ar e har der t o
ident ify, locat e, and cont act t han ar e br oad-
cast er s, who ar e licensed by t he Feder al Com-
municat ions Commission (FCC), per for ming
r ight s or ganizat ions somet imes send field
r epr esent at ives t o visit est ablishment s t hat
might be using t heir music.
70
Oft en t hey lear n
about t hese est ablishment s t hr ough local
newspaper s or magazines, or t hr ough wor d of
mout h. ASCAP has 23 dist r ict offlces
71
lo-
%her nel and Kr asilovsky, op. cit ., foot not e 1, p. 1S4.
61&]dste1n, ~p. cit., fmt not e 57, ~r mm ~d ~n i W&r g, op. cit ., f~t not e46, p, 363; Sheme] ~d fiasi]ovsky, op. cit ., foot not e 1, p.
184.
Eiz~r mm ~d ~ni~~r g, op. cit ., fOOt nOt e 46, p. 363
MBM1 ex~t lve, ~r wn~ communicat ion, J uly 12, 1~~.
64Materi~ for this ~ion iS t~en f
rom:
~rmm ~d ~nigs~rg, op. cit., foot not e 46, pp. 332-367.
es~r m ~ ~d ~n i gsk r g, op. cit ., foot not e 46, p. 359.
M~~BM1 ~d t h
e
B
r oa
d
ca
s t
er :
Br inging Music t o Anler iCa, op. cit ., foot not e 47.
sTSheme] and Kr asilovsky, op. cit ., foot not e 1, P. 156.
6a~r mm ~d ~nigs~r g, op. cit ., foot not e 46, p. 3~.
eg~id,; see a]so @]dst ein, op. cit ., foot not e 57, pp. 6-7.
TO~r mm and ~nigs~r g, op. cit ., foot not e 46, p. 3~.
7 Ibid.
114 q Copyr i gh t a n d Home Copy ing: Technology Challenges the Law
cat ed t hr oughout t he count r y, and BMI has 9
r egional offices,
72
whose job it is t o locat e and
license t hese est ablishment s.
If an est ablishment r efuses t o obt ain a li-
cense, yet cont inues t o use copyr ight ed music
wit hout per mission, legal act ion may follow.
73
Copyr ight infr inger s oft en end up paying
mor e in st at ut or y damages t han t hey would
have paid in licensing fees.
74
In addit ion, t he
infr inger is st ill r equir ed t o obt ain a license t o
cont inue playing copyr ight ed music at t he es-
t a blishment .
For eign Licenses
75
All t hr ee per for ming
t o t heir licensees t he
r ight s societ ies gr ant
r ight t o per for m all
wor ks cont ained in t heir r eper t or y, including
wor ks of for eign or igin. Each has it s own
agr eement s wit h for eign per for ming r ight s so-
ciet ies. Most count r ies only have one per for m-
ing r ight s societ y r epr esent ing it s wr it er s and
publisher s, so t hat a single for eign societ y will
usually r epr esent all t hr ee U.S. societ ies. AS-
CAP, BMI, and SESAC collect fees in t he
Unit ed St at es fr om user s of copyr ight ed for -
eign music on behalf of t heir r espect ive for -
eign societ ies, and in r et ur n, t hese for eign so-
ciet ies collect fees in t heir count r y fr om user s
of copyr ight ed Amer ican music.
S on gwr i t er Or ga n i z a t i on s
Songwr it er s may get addit ional help in col-
lect ing t heir r oyalt ies t hr ough member ship in
t he Songwr it er s Guild.
76
The Songwr it er s
Guild
77
is a volunt ar y nat ional songwr it er s
associat ion, compr ising appr oximat ely 4,000
songwr it er s wor ldwide and r epr esent ing all
t ypes of music, including mot ion pict ur e and
t elevision scor es as well as commer cials. For
t hose member s who do not cont r ol t heir own
publishing r ight s, t he Songwr it er s Guild col-
lect s r oyalt ies fr om publisher s for sheet mu-
sic, song por t folios, r ecor dings, t apes, mot ion
pict ur e, and t elevision uses. Each year , t he
Guild select s one major music publisher and
sever al small and medium-sized publishing
fir ms and conduct s t hor ough audit s of t heir
books. Accor ding t o t he Guild, over t he year s,
t hey have r ecover ed over $6 million t hat
might not ot her wise have been paid t o wr it -
er s. The Guild also maint ains r ecor ds of r oy-
alt y payment s for 6 year s and a file of all con-
t r act s submit t ed.
One st at ed goal of t he Songwr it er s Guild is
t o develop t he t alent s of young songwr it er s
78
and t o pr ot ect t hem in t heir dealings wit h
publisher s.
79
It holds special seminar s and
wor kshops wher e wr it er s shar e t heir ideas or
72A ~nwriters ~d CopWight : Quest ions ~d Answer s,
a pamphlet published by BMI, 1987.
73~r mm ~d ~ni~~r g, op. Cit ., foot not e 46, p. 362; Goldst ein, op. cit ., foot not e 57, P. 2.
74~r mm ~d ~niw~r g, op. cit ., fmt not e 46, p. 363; Goldst ein, op. cit ., foot not e 57, p. 8; The ASCAP License: It Wor ks for You,
op. cit ., foot not e 47.
T~Mat er l~ for t his ~t ion is bas~ on: Sheme] and Kr asilovsky, op. cit ., foot not e 1, pp. 196- 197; BMI, Your Br idge t o t he wor lds
Gr eat est Music: A Guide t o Music List ening, op. cit ., foot not e 54; and ASCAP: The Fact s, op. cit ., foot not e 50.
Ts~er icm Gui]d of Aut hor s ~d Composer s,
Recor d Wor ld Salut es t he 50t h Anniver sar y of AGACfIhe Songwr it er s Guild,
newslet t er published by t he Songwr it er s Guild, Apr . 10, 1982.
TTThe ~nWr it er s Gui]d has gone t hr ough a number of name changes since it s incept ion in 1931. It was fir st knOwn as t he %ngwr lt -
er s Pr ot ect ive Associat ion unt il t he mid-sixt ies, when it s name was changed t o t he Amer ican Guild of Aut hor s and Composer s, and
just r ecent ly it was expanded t o AGACAhe Songwr it er s Guild.
T~The Gui]d m~n~ns t he AGAC Foundat ion, a nonpr ofit educat ional or ganizat ion t hat pr ovides young wr it er s wit h t he oppor t u-
nit y t o lear n about t he music business t hr ough univer sit y scholar ship gr ant s and var ious Guild pr ogr ams.
Two Pr ot =t t h
e
r ight s of son~r it er s in t heir de~ings wit h publishers, the ~ngwriters child r ecommends t he uw of a st idd
guild cont r act (developed over t he year s), t hat ext ends t he per iod in which t he wr it er may r ecapt ur e his/her for eign copyr ight s fr om
28 year s t o 40 year s fr om t he dat e of agr eement (or 35 year s fr om t he init ial r elease of t he sound r ecor ding, whichever is ear lier ). In
addit ion, t he Guild cont r act cont ains pr ovisions t hat give t he wr it er a r ight of r ecapt ur e if t he publisher fails t o obt ain a r ecor ding of a
song wit hin a specified t ime per iod (not t o exceed 12 mont hs). Alt hough t he Guild encour ages songwr it er s t o use t his for m of cont r act
in all of t heir dealings wit h publisher s, songwr it er s do not make fr equent use of t his cont r act . Copyr ight Policy Planning Advisor , U.S.
Copyr ight Oflice, per sonal communicat ion, Feb. 6, 1989.
mat er ials wit h peer s and r eceive advice fr om
pr ofessional songwr it er s, pr oducer s, r ecor d-
ing ar t ist s, and music publisher s.
For wr it er s who choose t o cont r ol t heir pub-
lishing r ight s, t he Guild offer s a ser vice called
t he Cat alogue Administ r at ion Plan (CAP).
CAP assist s songwr it er s in r egist er ing, assign-
ing, and r enewing copyr ight s; collect s and
pays r oyalt ies; and r egist er s songs wit h one of
t he t hr ee per for ming r ight s societ ies. The fee
for t his ser vice is 2 per cent of t he publisher s
per for mance income and 7.5 per cent of all
ot her income.
In addit ion t o a copyr ight r enewal ser vice,
t he Guild also pr ovides ot her ser vices, such as
secur ing medical and life insur ance, r eviewing
songwr it ing cont r act s, financially evaluat ing
song cat alogues, and administ er ing est at es t o
pr ot ect t he heir s of it s member s. The Song-
wr it er s Guild also pr omot es legislat ion affect -
ing songwr it er s copyr ight s. It has advocat ed
legislat ion r aising t he mechanical r at es paid
t o publisher s and songwr it er s by user s of t heir
songs.
Anot her major songwr it er s or ganizat ion,
t h e Na t ion a l Aca demy of Son gwr it er s
80
(NAS), for mer ly known as t he Songwr it er s
Resour ces and Ser vices, does not become in-
volved dir ect ly in t he dist r ibut ion of r oyalt ies
t o it s member s. NAS is a nonpr ofit or ganiza-
t ion dedicat ed t o suppor t ing and encour aging
songwr it er s and t o advancing t he songwr it ing
pr ofession. It was founded in 1973 wit h t he
goal of pr oviding songwr it er s t he oppor t unit y
t o meet and est ablish impor t ant r elat ionships
wit h music indust r y pr ofessionals and ot her
songwr it er s. It s member ship consist s not only
of songwr it er s, but also of publisher s, pr oduc-
er s, ar t ist s, and r ecor ding company execu-
t ives.
NAS manages sever al ser vices t hat mat ch
songwr it er s t o collabor at or s or songwr it er s t o
publisher s, pr oducer s, and ar t ist s who ar e
looking for songs. NAS also sponsor s man
y
ac-
t ivit ies t hat give member s t he oppor t unit y t o
wor k wit h ot her s in t he songwr it ing commu-
nit y. It sponsor s weekly wor kshops wher e
member s can have t heir songs cr it iqued by
peer s and r epr esent at ives of major publishing
and r ecor ding companies. For a nominal fee,
songwr it er s out side of t he Los Angeles ar ea
can mail in songs t o be cr it iqued. In addit ion
t o oper at ing a t oll-fr ee line for music-r elat ed
quest ions, it also conduct s seminar s, wher e
guest s ar e invit ed t o discuss t he var ious as-
pect s of songwr it ing.
NAS also assist s in t he development of local
songwr it ing or ganizat ions t hr oughout t he
count r y, and pr ovides member s wit h healt h
insur ance cover age, discount s on legal ser v-
ices, books, and t apes, and a 10-per cent dis-
count on classes offer ed in t he UCLA Ext en-
sion Songwr it ing Pr ogr am.
Copyr i gh t R oya l t y Tr i bu n a l
81
The Copyr ight Royalt y Tr ibunal (CRT) was
cr eat ed by t he Copyr ight Act of 1976 and be-
gan oper at ions shor t ly befor e t he effect ive
dat e of t he act . It cur r ent ly is made up of t hr ee
Commissioner s,
82
who ar e appoint ed by t he
Pr esident of t he Unit ed St at es wit h t he advice
and consent of t he Senat e, t hr ee assist ant s,
and a gener al counsel.
~Nat ion~ Academy of Songwr it er s member ship infor mat ion.
81Mat er i~ for t his -ion is ~~ on: Offlce of t he Feder al Regist er , Nat ional Ar chives and Recor ds Administ r at ion, The Unikd
S t a t es Gou em m en t Ma n u a l 1988/89 (Washingt on, DC: U.S. Gover nment Pr int ing Office) J une 1, 1988, p. 62; Copyr ight Royalt y Tr ibu-
nal, Copyr ight Royalt y Tr ibunal Summar y Fact Sheet , November 1988; and Rober t Cassler , CRT, let t er t o OT~ Apr . 28, 1989.
~he CRT is aut hor ized t o have five Commissioner s, but since Sept ember 1984, t he Tr ibunal has never had mor e t han t hr ee a
ball, H.R. 1621, is pending t o r educe per manent ly t he number of Commissioner s t o t hr ee. Two of t he five init ial Commissioner s t er ms
wer e for 5 year s; t he ot her t hr ee Commissioner ss t er ms ar e for 7 year s t he pur pose of t his was t o st agger t he Commissioner s
t er ms. (Rober t Cassler , CRT, let t er t o OTA, Apr . 28, 1989. )
Box 5-APer f or m i n g Ri gh t s S oci et i es Loggi n g Pr oced u r es
ASCAP
Each per for ming r ight s societ y has it s own met hod of logging pr ogr ams t o det er mine t he amount of r oyalt ies
t o be paid t o it s const it uent s. Amer ican Societ y of Composer s, Aut hor s and Publisher s (ASCAP) sur veys it s user s
of r ecor ded music t o obt ain a r ough est imat e of how much air play a par t icular song r eceives. It conduct s a com-
plet e census of all per for mances on net wor k t elevision, and in concer t halls, educat ional inst it ut ions, cer t ain
wir ed-music ser vices, and a gr oup of nonbr oadcast , nonconcer t licensees such as cir cuses and ice shows. ASCAP
must r andomly sample all ot her per for mances.
For example, local t elevision st at ion per for mances ar e sampled by means of audiot apes, TV Gu i d e list ings,
and cue sheet s, which ar e det ailed list ings of all music on a pr ogr am, usually fur nished by t he pr ogr am pr oducer .
Each year 30,000 hour s of local t elevision pr ogr ams ar e sur veyed.
ASCAP samples over 60,000 hour s of local r adio hour s each year . Local r adio st at ions ar e t ape-r ecor ded in
6-hour segment s. Out side consult ant s send t aping schedules dir ect ly t o t he people in t he field, so neit her t he
st at ions nor ASCAPs office st aff know in advance which st at ions ar e being t aped or when. This syst em r elies
heavily on t he abilit y of ASCAPS st aff t o cor r ect ly ident ify each song when t he t apes ar e analyzed-a t ime-
consuming and cost ly t ask. I
The major it y of ASCAPs gener al licensees (e.g., r est aur ant s, bar s, et c. ) ar e not sur veyed because of t he
t ime and cost fact or s. Inst ead, ASCAP uses feat ur e per for mances on r adio and t elevision as pr oxies for t he
dist r ibut ion of t hese shar es.
BMI
Br oadcast Music Inc. (BMI) uses music br oadcast by a scient ifically chosen sample of st at ions as t he basis for
it s quar t er ly dist r ibut ion of r oyalt ies t o songwr it er s, composer s, and copyr ight holder s.
2
Each licensee is asked t o
supply a st at ion-pr epar ed log of all music per for med in a par t icular week, pr edet er mined by BMI. The names of
t he wr it er s and publisher s as well as t he name of t he ar t ist ar e r ecor ded on t his log, t hus eliminat ing t he pr oblems
wit h ident ifying each song. The st at ion is not ified in advance which week t o log, and BMI st r ives t o keep t he list
secr et fr om publisher s and wr it er s, An independent account ing fir m det er mines which st at ions ar e being logged
and when, so t hat no BMI employee has pr ior knowledge of what st at ions ar e being logged.
For per for mances shown on t elevision, BMI uses an ext ensive nat ional dat abase of infor mat ion about net -
wor k, syndicat ed, and cable pr ogr amming and det ails t he use of music in t hose pr ogr ams list ed by TV Gu i d e.
SESAC
The Societ y of Eur opean St age Aut hor s and Composer s (SESAC) does not have a syst em of accur at e local
st at ion logging pr ocedur es. It r elies inst ead on r eviews of net wor k logs, limit ed spot checking of local st at ions, and
t r ade paper char t s t o det er mine t he amount of air play r eceived by a par t icular song.
I Dick Weissman, Per for ming Right s Societ ies, Th e Mu si c Bu si n ess: Ca r eer Oppor t u n i t i es a n d S el f -Def en se (New Yor k,
NY: Cr own Publisher s, Inc., 1979), p. 83.
2BMI and t he Br oadcast er : Br inging Music t o Amer ica, op. cit ., foot not e 47.
Under t he compulsor y licensing pr ovisions but ion of t he r oyalt ies, in t hese cases, is left up
of t he Act , t he Tr ibunal is r esponsible for de- t o t he par t ies involved. These t r ansmissions
t er mining and dist r ibut ing t he copyr ight r oy- involve t he use of published, nondr amat ic
alt ies collect ed for r et r ansmissions of br oad- composit ions a nd pict or ia l, gr a phic, a nd
cast signals by cable syst ems and t he public sculpt ur al wor ks by noncommer cial br oad-
per for mance of music on jukeboxes. It is also cast ing st at ions. Royalt ies collect ed fr om t he
r esponsible for det er mining t he r oyalt y r at es compulsor y licenses for making and dist r ibut -
or ph on or ecor ds a n d for cer t a in pu blic ing phonor ecor ds ar e dist r ibut ed eit her di-
br oadcast t r ansmissions, alt hough t he dist r i- r ect ly t o t he copyr ight owner s or t heir desig-
nat ed agent s (in most cases, t he Har r y Fox
Agency).
In r ecent year s t he Tr ibunal has been given
t he addit ional r esponsibilit ies of:
q
q
dist r ibut ing t he sa t ellit e ca r r ier copy-
r ight r oya lt ies gr a nt ed by t he Sa t ellit e
Home Viewer Act of 1988, which allows
for t he r et r ansmission of br oadcast sig-
nals dir ect ly t o sat ellit e dish owner s for
pr ivat e viewing; and
monit or ing pr ivat e negot iat ions bet ween
music owner s and jukebox oper at or s for
pr ivat e jukebox licenses int ended t o su-
per sede t he jukebox compulsor y license.
The CRT pr oceedings ar e int ended t o bal-
ance t he r elat ive har ms and benefit s among
owner s a nd user s of copyr ight ed ma t er ia ls
a n d t o i n cr ea s e pu bl i c a cces s t o cr ea t i ve
wor ks. Sever al year s ago, however , t he Tr ibu-
nal was cr it icized for having failed t o r egulat e
copyr ight compulsor y licenses as t hey wer e in-
t ended t o be administ er ed.
83
Accor ding t o t he
CRT, h owever , t h es e cr i t i ci s ms a r e u n -
founded, especially given t he lit igious nat ur e
of t he par t ies involved.
84
PERFORMANCE RIGHTS IN
SOUND RECORDINGS85
Per f or m a n ce R i gh t s Un d er U.S . La w
Sound r ecor dings, as defined by public law,
include all wor ks t hat r esult fr om t he fixat ion
of a ser ies of sounds (excluding t hose accom-
panying mot ion pict ur es or ot her audio-visual
wor ks) r egar dless of t he nat ur e of t he mat e-
r ial object s in which t hey ar e embodied (i.e.,
disks, t apes, or ot her phonor ecor ds).
86
Unit ed St at es copyr ight law does not pr o-
vide for copy-r ight owner s of sound r ecor d-
ings usually per for mer s, pr oducer s, or r e-
cor ding companies t o r eceive compensat ion
for public per for mances of t he r ecor ding.
Aut hor s and composer s ar e, however , com-
pensat ed for t he public per for mance of t heir
wor ks t hr ough per for ming r ight s or ganiza-
t ions.
Per for mer s and pr oducer s have ar gued ve-
hement ly t hat U.S. copyr ight law should be
amended t o include a per for mance r ight .
They believe t hat copyr ight holder s of sound
r ecor dings do not r eceive fair compensat ion
83The copyr ight my~t y Tr ibunal Sunset Act of 1985 was r efer r ed t o t he House Commit t ee on t he J udiciar y ~d It s su~ommit t ee
on Cour t s, Civil Liber t ies, and t he Administ r at ion of J ust ice. This bill sought t o t er minat e t he ser vices of t he Copyr ight Royalt y Tr i-
bunal and t r ansfer it s funct ions t o t he Regist er of Copyr ight s. Hear ings wer e held, but no legislat ion emer ged fr om t he commit t ee.
For mor e infor mat ion, see U.S. Congr ess, House J udiciar y Commit t ee, Copyr i gh t Roya l t y Tr i bu n a l a n d U.S . Copyright Of f i ce, hear -
ings befor e t he Subcommit t ee on Cour t s, Civil Liber t ies, and t he Administ r at ion of J ust ice, J uly 11, Sept . 18, and Oct . 3, 1985 (Wash-
ingt on, DC: U.S. Gover nment Pr int ing Ofllce, 1985).
M~~A Cassler , CRT, let t er t o OTA, Apr . 28, 1989, p. 4.
8~Mat er ia] for t his sect ion follows: Gar y L. Ur win, Paying t he Piper : Per for mance Right s in Musical Recor d ings, Com m u n i ca t i on s
a n d t h e La w, vol . 5, Wint er 1983, pp. 3-57, U.S. Congr ess, House J udiciar y Commit t ee, Pe+or m a n ce Ri gh t s i n S ou n d Recor d i n gs, hear -
ings befor e t he Subcommit t ee on Cour t s, Civil Liber t ies, and t he Administ r at ion of J ust ice, Ser ial No. 83, Mar . 29 and 30, May 24 and
25, 1978, U.S. Congr ess, House J udiciar y Commit t ee, Per f or m a n ce Ri gh t s i n S ou n d Recor d i n gs, hear ings befor e t he Subcommit t .eeon
Cour t s, Civil Liber t ies, and t he Administ r at ion of J ust ice, Commit t ee Pr int No. 15, J une 1978, in par t icular pp. 100-105, 114-117,
254-259, 328-351,366-369,570-576, and 580-589.
~Sie@, t Lexicon PIus,
op. cit ., foot not e 42, p. 20.
Box 6-BPer f or m i n g Ri gh t s S oci et i es Di st r i bu t i on of Roya l t i es t o Mem ber s
1
Both ASCAP and BMI have developed t heir own complex for mulas for conver t ing t he amount of air play fr om
a par t icular st at ion int o an index of nat ional play dur ing t he t ime sur veyed.
2
ASCAP
The Amer ican Societ y of Composer s, Aut hor s and Publisher s (ASCAP) assigns each per for mance a value
depending on what t ype of per for mance it is, i.e., a feat ur e, backgr ound, et c. Each per for mance is t hen weight ed
accor ding t o t he size and impor t ance of t he logged st at ion, t ime of day of pr ogr am, et c. t o det er mine t he t ot al
number of per for mance cr edit s. Each quar t er , t he t ot al per for mance cr edit s for wr it er s as a gr oup, and for pub-
lisher s as a gr oup, ar e divided int o t he r espect ive dollar s of dist r ibut able r evenue t o yield t he dollar value of a
per for mance cr edit for each gr oup. On payment , ASCAP issues a det ailed st at ement showing t he t it le of t he wor k
sur veyed, t he number of per for mance cr edit s ear ned, and t he media on which t he per for mance appear ed.
ASCAP has t wo syst ems of payment for it s wr it er s. The cur r ent per for mance plan dist r ibut es t he wr it er s
shar e of t he money on t he basis of his per for mance over t he past four quar t er s. New wr it er member s ar e init ially
paid on t he cur r ent per for mance plan, wit h t he opt ion of swit ching t o t he four -fund basis aft er 3 full sur vey
year s. The four -fund syst em is a defer r ed payment plan based par t ly on cur r ent per for mances, but most ly on
an aver age of per for mances over a per iod of 5 or 10 year s.
Dist r ibut ion of r oyalt ies t o publisher s is det er mined on a cur r ent per for mance basis only, in which t he
publisher is paid on an on account basis for t he fir st t hr ee quar t er s, wit h adjust ment s being made in t he four t h
quar t er .
BMI
Br oadcast Music Inc. (BMI) affiliat es ar e paid accor ding t o a published r oyalt y payment schedule, which dis-
t inguishes bet ween r adio and t elevision per for mances and bet ween feat ur e, t heme, and backgr ound musical
per for mances. A per for mance index is calculat ed for each per for mance, based on t he number of t imes it is played
on t he r adio and t elevision st at ions, and t he t ot al r evenue ear ned paid t o t he affiliat es. BMIs r oyalt y payment
schedule allows for bonus cr edit s based on t he number of t imes ones wor ks ar e played on t he r adio or t elevision.
Bonus cr edit s ar e calculat ed on a song-by-song basis.
SE SAC
The Societ y of Eur opean St age Aut hor s and Composer s (SESAC) dist r ibut ion syst em places less emphasis
on act ual sur veys of per for mances on t he air , and r elies mor e heavily on t he availabilit y, diver sit y, gr owt h, senior -
it y, and commer cial value of a publisher s cat alog and t he pr omot ional effor t of t he publisher himself. SESAC
pays it s wr it er s and publisher s incent ives of $240 each for any song r ecor ded on a pop single and $100 each for any
song r ecor ded on a pop album.
3
Bonus cr edit s ar e also awar ded for song longevit y, cr ossover s (songs appear ing on
mor e t han one char t ), and car r yover s (t hose having ear ning power over a l-year per iod).
t ASCAP: The Fact s, OP. cit ., foot not e 50; BMI and t he Br oadcast er : Br inging Music t o Amer ica, op. cit ., foot not e 47;
Kor man and Koenigsber g, ~p. cit ., foot not e 46, pp. 332-367; Shemel and Kr asilo%ky, op. cit ., foot not e 1; The ASCAP Sur vey
and Your Royalt ies, pamphlet published by ASCAP, 1986; and Dick Weissman, Per for ming Right s Societ ies, op. cit ., foot -
not e 76, pp. 82-87.
2Weissman, Per for ming Right s Societ ies, op. cit ., foot not e 76, p. 83.
3Sheme] and kasi]ovsky, op. cit ., foot not e 1, p. 185.
fr om br oadcast er s and ot her commer cial user s, r adio st at ions, and backgr ound music
er s of t heir wor ks. Per for ming r ight s in sound ser vices t o pay fees for t he r ight t o play copy-
r ecor dings has long been a hot ly cont est ed is- r ight ed sound r ecor dings in commer cial op-
sue, wit h t he fir st of many per for mance r ight s er at ions. The syst em pr oposed in H.R. 1805
bills being int r oduced in 1925. A bill pr oposed (97t h Congr ess) would be administ er ed by t he
in 1987 (H.R. 1805) would r equir e br oadcast - Copyr ight Royalt y Tr ibunal, wit h t he assis-
Chapter SCopy right Roy alties for Mus ic and Sound Recordings . 119
t ance of or ganizat ions such as t he Amer ican
Feder at ion of Musicians, which maint ains r e-
cor ds of r ecor ding sessions, and per for ming
r ight s societ ies (ASCAP, BMI, SESAC), which
t r ack per for mances of copy-r ight owner s
wor ks. Half of t he license fees would be dis-
t r ibut ed t o t he copyr ight owner s of t he sound
r ecor dings. The ot her half would be dist r ib-
ut ed t o t he per for mer s on t he r ecor ding, t o be
divided equally among all t he par t icipant s.
Under t he pr oposed syst em, user s of sound
r ecor dings would have t he opt ion of paying li-
cense fees eit her on a blanket , or per -use pr o-
r at ed basis. The blanket license fee for r adio
and t elevision st at ions would be based on t he
licensees net r eceipt s fr om adver t ising spon-
sor s dur ing t he year ; ot her t r ansmit t er s of
sound r ecor dings would be subject t o fees
equal t o 2 per cent of t heir gr oss r eceipt s fr om
subscr iber s. The fee for r adio st at ions wit h
net r eceipt s of $25,000 t o $100,000 would be
$250, $750 for net r eceipt s of $100,000 t o
$200,000, and 1 per cent of net adver t ising r e-
ceipt s for amount s over $200,000. Television
st at ions wit h net r eceipt s of $1 million t o $4
million would be subject t o license fees of
$750, and $1,500 for r eceipt s over $4 million.
Commer cial user s, such as bar s and r est au-
r ant s, would pay $100 each year for each loca-
t ion in which sound r ecor dings ar e used. Blan-
ket licenses for all ot her user s (wit h t he
except ion of jukebox oper at or s) would be es-
t ablished by t he Copyr ight Royalt y Tr ibunal
wit hin 1 year aft er t he bill t akes effect . Under
t he pr or at ed per -use license, t he CRT would
det er mine t he amount based on t he ext ent of
a licensees use of r ecor dings, wit h a maxi-
mum of 1 per cent of gr oss r eceipt s for r adio
and t elevision br oadcast er s, and 2 per cent for
all ot her user s.
87
Ar gu m en t s f or a n d Aga i n st
Per f or m a n ce R i gh t s
Br oadcast er s ar gue t hat per for mance r oyal-
t ies would pose a financial bur den so sever e
t hat st at ions would be for ced t o choose high-
income pr ogr amming and abandon or cur t ail
cer t ain kinds of pr ogr amming, such as public
ser vice or classical pr ogr ams, t hat do not gen-
er at e a set amount of adver t ising r evenue.
They fur t her ar gue t hat t hey compensat e per -
for mer s wit h fr ee air t ime, t hus pr omot ing r e-
cor d sales and incr easing t he popular it y of t he
ar t ist s. Fur t her mor e, t he br oadcast er s ar gue
t hat a per for mance r ight would only exacer -
bat e any injust ices in t he st at us quo by in-
cr easing t he income only of t hose who ar e al-
r ea dy wor kin g a n d n ot t h os e wh o a r e
st r uggling t o find wor k.
Per for mer s, on t he ot her hand, ar gue t hat
even if t hey do benefit fr om fr ee air play,
br oadcast er s never t heless der ive a commer -
cial benefit fr om t he per for mance, and per -
for mer s ar e ent it led t o be compensat ed for
t hat use. They ar gue t hat br oadcast er s r ar ely
announce t he names of songs over t he air ,
much less t he names of t he ar t ist s per for ming
t he songs. They fur t her ar gue t hat by allowing
br oadcast er s t o use t heir music on t he air ,
t hey r isk over exposing t heir wor ks. In t his
sit uat ion per for mer s ar gue t hat t hey ar e be-
ing for ced t o compet e wit h, and r isk being
dr iven out of wor k by, t heir own r ecor ded per -
for mances. They ar gue t hat if it wer e not for
t he widespr ead availabilit y of t heir r ecor d-
ings, t hey would have many mor e oppor t uni-
t ies t o per for m t heir wor ks in per son. Br oad-
cast er s ar gue, on t he ot her hand, t hat a
8TFor mor e infor mat ion, s= U.S. con~ess, House J udiciar y Commit t ee, Pe~or m a n ce Ri gh t s i n S ou n d R em ~i n gs, op. ci t ., foot not e
90, U.S. Congr ess, House J udiciar y Commit t ee, Per f or m a n ce Ri gh t s i n S ou n d Recor d i n gs, op. cit ., foot not e 90, pp. 100-105, 114-117,
254-259,328-351,366-369, 570-576, and 580-589.
per for mer cannot possibly per for m in per son
as many t imes as a r ecor ding is played over
t he r adio and t hat air play pr omot es, r at her
t han subst it ut es for , live per for mances.
The per for mer s also ar gue t hat t he many
backgr ound singer s or inst r ument alist s in t he
band, who ar e also par t of t he r ecor ding, ar e
not given any cr edit on t he air . They believe
t hat a per for mance r ight would pr ovide at
least some compensat ion t o t hese per for mer s
since t he pr oposed r oyalt y would dist r ibut e
equal income t o all per for mer s r egar dless of
t heir r ole in t he r ecor ding.
ROYALTIES FROM HOME
TAPING
Pr oposa l s f or a Hom e-Ta pi n g Levy
i n t h e Un i t ed S t a t es
Much of t he debat e on home copying has fo-
cused on imposing some t ype of levy scheme
t o compensat e r ight s holder s for t he imput ed
losses t hey suffer fr om t he widespr ead avail-
abilit y and convenience of r ecor ding t echnolo-
gies. The U.S. music communit y has r epeat -
edly pr oposed t hat a levy be imposed on blank
t apes as well as on t he r ecor ding equipment it -
self t o compensat e ar t ist s and ot her s for
losses due t o home t aping. The income gener -
at ed fr om t his levy would be dist r ibut ed as
r oyalt ies among t hose involved in t he cr eat ion
of r ecor dings t he composer s, aut hor s, musi-
cians, ar t ist s, and r ecor d companies, as well as
t he pr oducer and/or pr oduct ion company.
One pr oposed blank-t ape levy scheme and t he
pr oposed syst em for allocat ing t he r oyalt ies
gener at ed by it , ar e discussed in det ail in box
5-E.
Pr oponent s of a levy scheme for t he
Unit ed St at es oft en point t o t he int er nat ional
scene, wher e levy schemes ar e alr eady in use.
They fur t her ar gue t hat if Amer ican ar t ist s
ar e t o expect t o be r ight fully compensat ed for
expor t ed music pr oduct s, t hen it is imper at ive
t hat t he Unit ed St at es impose some sor t of r e-
cipr ocal syst em so t hat ot her count r ies will be
able t o r eceive compensat ion for t heir wor ks
dist r ibut ed in t he Unit ed St at es. It is impor -
t ant t o not e, however , t hat int er nat ional levy
schemes will not have t he same r esult s in t he
Unit ed St at es t hat t hey have in Eur opean
count r ies because of t he polit ical, legal, social,
and commer cial/mar ket differ ences t hat exist
wit hin t he var ious societ ies.
88
I n t er n a t i on a l Per spect i ves on
Ta pe Levi es
At t he t ime of t his wr it ing, no r et r ospect ive
compar at ive or evaluat ive st udies examining
exist ing levy schemes wer e available t o OTA.
Sever al of t he levy schemes have been put int o
effect fair ly r ecent ly, and an adequat e per iod
of t ime has not yet elapsed t o yield a compr e-
hensive or definit ive evaluat ion of t heir long-
t er m effect s. Some figur es have been r eleased
as t o how much r evenue has been collect ed by
t he var ious count r ies, however , and available
st at ist ics ar e incor por at ed wher ever appr opr i-
at e (see also t ables 5-1 and 5-2). Effor t s con-
t inue abr oad t o implement home-copying fees
for a udio a nd video copying.
89
Th e fol l owi n g
sect ions spot light some of t he syst ems t ha t
have been put int o place.
F r a n ce
Under Fr ench copyr ight law, r ight holder s
(aut hor s, per for mer s, and pr oducer s) ar e
gr ant ed t he r ight t o r eceive fair compensat ion
~Mike Gr ubbs, TMdy Elect r onics, let t er t o OTA, Apr . 27, 1989.
a9For exmp]e, ~ ~endment t . t he Net her ]~ds copflight law has ~n pr oposed t o int r oduce a blmk-t t ip f=. (I n t el l ect u a l Fm p-
er t y i n Bu si n ess Br i ef i n g, vol . 1, Issue 4, May 1989, pp. 3-4. )
Box 6-CHow Per f or m a n ce Roya l t i es Ar e Di st r i bu t ed i n Ot h er Cou n t r i es
1
En gla n d England guar ant ees t he r ight of public per for mance for sound r ecor dings t o t he pr oducer s of t he
wor k, but not t o t he per for mer s appear ing on t he r ecor ding. Per for mer s ar e, however , pr ot ect ed by cr iminal laws,
which impose sanct ions on t hose who violat e t he per for mer s r ight t o public per for mance. Pr oducer s and per -
for mer s assign t heir per for mance r ight s t o Phonogr aphic Per for mance Limit ed (PPL), which t hen licenses t his
r ight t o user s. PPL negot iat es sound r ecor ding licensing fees wit h br oadcast er s and ot her user s of copyr ight ed
music.
Under Br it ish law, per for mer s fr om ot her count r ies have no int ellect ual pr oper t y r ight s in t he public per -
for mance of t heir wor ks, and t hus, England does not make payment s for t he public per for mances of U.S. r ecor ds
eit her , alt hough some companies do pay t heir Amer ican affiliat es t hr ough cont r act .
Den ma r k Like most Eur opean count r ies, Denmar k does not consider per for ming r ight s for sound r ecor d-
ings a dir ect copyr ight , but r at her a neighbor ing or r elat ed r ight . As such, t he per for mance r ight is gr ant ed
for a t er m of 25 year s, r at her t han for t he full t er m of copyr ight , which is life plus 50 year s.
Denmar k has st r ict r ules r egar ding t he eligibilit y r equir ement s of per for mer s and pr oducer s making claims
t o a shar e of t he per for mance r oyalt ies. To r eceive r enumer at ion for t he public per for mance of t heir copyr ight ed
wor ks, copyr ight owner s must become member s of GRAMEX, t he Danish collect ing societ y, which r epr esent s t he
int er est s of t he copyr ight holder s in licensing negot iat ions wit h br oadcast er s and ot her user s of copyr ight ed mu-
sic.
Revenues fr om t he r oyalt y scheme ar e divided equally bet ween t he per for mer and t he pr oducer . Per for m-
er s, however , ar e r esponsible for paying t wo-t hir ds of t he administ r at ive cost s, since t he calculat ion of per for m-
er s r oyalt ies r equir es mor e t ime and effor t t han t hat of pr oducer s r oyalt ies. Payment s t o pr oducer s ar e t r ans-
fer r ed t o t he nat ional r ecor ding-indust r y gr oup, which t hen makes payment s t o individual labels based on r ecor d
sales. For eign pr oducer s r eceive payment s eit her t hr ough Danish subsidiar ies or affiliat es.
West Ger ma n y Like Denmar k, West Ger many t r eat s t he per for mance r ight as a secondar y r ight and not
as an exclusive r ight , t her eby limit ing pr ot ect ion t o 25 year s r at her t han t he full t er m of copyr ight . But unlike
ot her count r ies, West Ger many r ecognizes t he per for mer as t he pr imar y copyr ight holder of a sound r ecor ding,
alt hough t he pr oducer is eligible t o shar e in t he pr oceeds.
West Ger manys syst em of collect ing and dist r ibut ing per for mance r oyalt ies is similar t o t hat of most coun-
t r ies in t hat t he copyr ight owner assigns his r ight s t o a per for mance r ight societ y, which in t ur n, licenses t his
r ight t o br oadcast er s and ot her user s of copy-r ight ed music. But wher eas most ot her count r ies calculat e payment s
on t he basis of air play or play t ime, West Ger many does not . This eliminat es t he high administ r at ive cost s associ-
at ed wit h having t o det er mine air play. This t ype of syst em, however , does have implicat ions for t he dist r ibut ion
of r oyalt ies among for eign nat ionals. Because most count r ies do not det er mine payment s based on t he aut hor s
r ecor ding-r elat ed ear nings as in West Ger many, it is har d t o compar e syst ems.
Mat er ial for t his sect ion is t aken fr om: U.S. Congr ess, House J udiciar y Commit t ee, Per f or m a n ce Ri gh t s i n S ou n d Recor d -
~n gs, op. cit ., foot not e 90, pp. 178-186, 195-202, 202-207.
for t he pr ivat e r epr oduct ion of t heir copy- audiot apes and 2.25 FF (37 cent s) per hour
r i gh t ed r ecor di n gs .
90
I n December 1986 t he playing t ime for videot apes. Sevent y-five per -
Fr ench Gover nment imposed a levy on bot h cent of income is dist r ibut ed t o t he individual
audiot apes and videot apes. The levy is set at r ight owner s; t he r emaining 25 per cent must
1.50 FF (25 cent s) per hour playing t ime for b e u s e d f o r t h e p r o m o t i o n o f a u d i o /
Mat er ial for t his sect ion was t aken fr om: Yvonne Bur ckhar dt ., Legislat ion On Pr ivat e Copying in Eur ope and It s Implement a-
t ion, lect ur e given by t he Gener al Secr et ar y of FIM in Zur ich, J une, 1988; and Yvonne Bur ckhar dt , New Right of Per for mer s
(Zur ich, Swit zer land: Int er nat ional Feder at ion of Musicians, Mar ch 1987).
Box 6-D Copyr i gh t Cl ea r a n ce Cen t er
1
One example of a U.S. or ganizat ion t hat collect s r oyalt ies for pr ivat e copies is t he Copyr ight Clear ance Cen-
t er (CCC). Alt hough t he CCC (t o dat e) has focused on dist r ibut ing income fr om licenses for phot ocopying r ight s,
r epr esent at ives feel t hat t he CCC could also be adapt ed t o t he dist r ibut ion of income fr om a home-copying levy.
2
The Copyr ight Act of 1976 gr ant s copyr ight owner s t he exclusive r ight t o dist r ibut e and r epr oduce t heir pub-
lished wor ks; t hus, t he law r equir es t hat user s of copyr ight ed mat er ials fir st obt ain per mission fr om t he copy-
r ight owner s befor e making copies beyond t he fair use pr inciple, subject t o exempt ions for r epr oduct ions by
libr ar ies and ar chives.
3
The t ask of obt aining per mission befor ehand, however , can be t imeconsuming and ineffi-
cient on an individual basis. The CCC est imat es t hat over 800 million pages of phot ocopies ar e made fr om copy-
r ight ed wor ks each year by major cor por at ions, and t hat most U.S. cor por at ions r ar ely, if ever , obt ain per mission
for t heir gener al phot ocopying needs.
4
The CCC was est ablished as a nonpr ofit agency in 1977 by publisher s, aut hor s, and user s of phot ocopies in
r esponse t o t he needs of businesses r equir ing t he immediat e use of infor mat ion. It was designed t o acceler at e t he
pr ocess of obt aining copyr ight per mission while compensat ing copy-r ight owner s for copies of t heir wor ks.
The CCC oper at es t wo ser vices: 1) t he Tr ansact ional Repor t ing Ser vice, wher e each or ganizat ion keeps
t r ack of how many copies ar e made of each wor k, and pays a license fee based on t he number of t r ansact ions; and
2) t he Annual Aut hor izat ions Ser vice, a blanket license in which t he company makes a single payment for
aut hor izat ion t o make limit less copies of t he wor ks cover ed by t he CCC.
The Tr ansact ional Repor t ing Ser vice is designed t o ser ve t he needs of smaller or ganizat ions t hat only occa-
sionally make copies of copyr ight ed mat er ial. User s of t his ser vice ar e r equir ed t o r ecor d t he number of copies
made of specific wor ks. Because user s must r ecor d and r epor t all copies made wit hin t he year , t her e ar e enor -
mous administ r at ive cost s bot h in t ime and in effor t .
The Annual Aut hor izat ions Ser vice was est ablished in 1983 in r esponse t o t he needs of major U.S. cor por a-
t ions t hat r epr oduce subst ant ial amount s of copyr ight ed mat er ial. The list of par t icipant s in t his ser vice has
gr own t o 75 and includes sever al lar ge cor por at ions. A license obt ained t hr ough t his ser vice per mit s or ganiza-
t ions t o make as many copies of par t icipat ing publicat ions as needed wit hout t he administ r at ive bur den of hav-
ing t o r ecor d each t r ansact ion. Pr oject ed annual use is calculat ed fr om t he sur veys by using st at ist ical models.
This ser vice is cur r ent ly t he major sour ce of payment s t o t he CCC.
The licenses ar e gr ant ed for 1 year and ar e r enewable for a second. The cost of t he license is based on dat a
fr om copying sur veys conduct ed at cor por at e sit es. Accor ding t o Eamon T. Fennessey (Pr esident , CCC) t he cost
of t hese licenses can r ange fr om five t o six figur es.
5
Cor por at ions ar e limit ed t o copying ar t icles, jour nals, and
par t s of books; t he copying of an ent ir e book is pr ohibit ed. Licenses ar e gr ant ed for copying publicat ions t hat ar e
r egist er ed wit h t he ser vice and apply only t o copies made for int er nal use.
Over 900,000 publicat ions of appr oximat ely 6,200 publisher s ar e cur r ent ly r egist er ed wit h t he CCC.
6
By join-
ing, a publisher designat es t he CCC t o act as agent for t hose wor ks t hat t he publisher r egist er s. No r oyalt y can be
collect ed for t he copying of a wor k not r egist er ed. The CCC is r esponsible for licensing a nonexclusive r ight t o
cor por at ions, handling license r enewals, and pr ocessing publicat ion addit ions, delet ions, and fee changes. The
fees ar e st at ed by t he publisher , who r eceives r epor t s on billings and collect ions as well as on each par t icipat ing
cor por at ions pr oject ed use of t he publisher s wor ks.
One st at ed goal of t he CCC is t o incr ease cor por at ions awar eness of copyr ight pr ot ect ion. The CCC is a
member of t he Int er nat ional Feder at ion of Repr oduct ion Right s Or ganizat ions and shar es r ight s agr eement s
wit h int er nat ional or ganizat ions such as t he Copyr ight Licensing Agency in England, Cent r e Fr ancais du Copy-
r ight in Fr ance, and Copyr ight Agency Lt d. in Aust r alia. It also has agr eement s wit h West Ger many and Nor way.
The CCC is cur r ent ly consider ing collect ing r oyalt ies for t he copying of comput er soft war e, t he copying of
t ext ual and dat abase mat er ial by any t ype of t echnology via elect r onic access, and t he collect ing of r oyalt ies fr om
univer sit ies and gover nment bodies.
Mat er ial for t his sect ion is t aken fr om: Income fr om Copying, and Publisher s Execut ive Summar y: Royalt y Payment s
Owed Under U.S. Law t o Publisher s Wor ld-Wide for Phot ocopying in U.S.A.) pamphlet s published by t he Copyr ight Clear -
ance Cent er , and Edwin McDowell, Royalt ies fr om Phot ocopying Gr ow, New Yor k Ti m es. J une 13, 1988.
2
CCC
reprewntative, ~rson~ commu n i ca t i on , Ap r . 28, 1989.
Wit le 17, U.S. Code, Sect ion 108.
publisher s Execut ive Summar y: Royalt y Payment s Owed Under U.S. Law t o Publisher s Wor ldWide for Phot ocopying in
t he U. S.A., op. cit ., foot not e 1 above.
5Mc~we]], Op. Cit ., f~t not e 1
WCC r epr esent at ive, per sonal communicat ion, Apr il 28, 1989.
a u di ovi s u a l pr odu ct i on s a n d l i ve per for m- fr om t he bla nk-t a pe levy it self a mount ed t o
ances. The pr oceeds of t his levy ar e paid t o a
collect ing societ y t o be dist r ibut ed among t he
va r i ou s copyr i gh t h ol der s : a u t h or s r ecei ve
one-ha lf of t he pr oceeds fr om t he a udiot a pe
levy, wit h t he per for mer s and pr oducer s shar -
ing t he r emaining half equally bet ween t hem.
Pr oceeds fr om t he videot ape levy ar e dist r ib-
ut ed equally t o all t hr ee par t ies.
Reven u e fr om Fr a n ces bl a n k-t a pe l evy
boost ed t he gr oss income of t he Societ e des
Au t e u r s , Comp os i t e u r s , e t E d i t e u r s d e
Musique (SACEM), t he Fr ench aut hor s soci-
et y, by 9. 5 per cen t t o 1. 84 bi l l i on fr a n cs
($305. 9 mi l l i on ) i n 1987.
91
Of t h is a mou n t ,
1.23 billion fr ancs ($203.6 million) wer e col-
lect ed in per for mance income, an incr ease of
7.3 per cent over 1986, and 615 million fr ancs
($101. 8 mi l l i on ) i n mech a n i ca l i n come, u p
14.3 per cent fr om t he pr evious year . Revenue
68.2 million fr ancs ($1 1.28 million) of t he me-
chanical r ight s income. Of t he 1.84 billion
fr ancs collect ed, 1.3 billion fr ancs ($215 mil-
lion) wer e dist r ibut ed among appr oximat ely
50,000 aut hor s, composer s, and publisher s for
t he per for mance of about 450,000 wor ks.
In 1988, Fr a nce collect ed 400,860,313
fr ancs ($63,377,125) fr om it s blank-t ape levy.
Of t his amount , 103,185,757 ($16,313,954)
came fr om it s audiot ape levy.
92
The r ecent addit ion of t he blank-t ape levy
was par t ially offset by t he r educt ion of t he
value-added t axes (VAT) on bot h pr er ecor ded
and blank videocasset t es and audiot apes.
93
The r ecor ding indust r y believes t hat t his r e-
duct ion will r esult in less r evenue for t he copy-
r ight holder s, which r uns count er t o t he aim
behind t he blank-t ape levy. They feel t hat in-
st ea d of focusing on t he pr oducer s of bla nk
glThe fol]owlng is ~ken fr om Mike Hennessey, Tape Levy Helps Lift SACEM Income, Bi l l boa r d , VO1. 100, No. 30, J UIY 23, 1988, p.
60.
92J. L. Tournler, president, SACEMJ SDRM, let t er t o OTA, May 25, 1989 (enclosur es 1-3: IFPI ~bles).
93Mat er 1~ for t his s-ion was ~ken f
r om:
Phi]ipp Cr mq, Fr ench TO Cut VAT Rat es for Casset t es: Move AfTect s pr er ecor ded
Videos, Blank Audiot apes, Bi l f boa t i , vol . 100, No. 43, Oct . 22, 1988, p. 91; and Philippe Cr ocq, Fr ench VAT Cut on Pr er ecor ded Vial:
Not All It Was Cr acked Up t o Be, Bi Wma r d , vol. 100, No. 49, Dee. 3, 1988, p. 53.
Box 5-EDet a i l s of Pr oposed Bl a n k -Ta p Levy i n S .1739
A bill was pr oposed in t he 99t h Congr ess, S. 1739,
1
t o amend Tit le 17 of t he U.S. Code wit h r espect t o home
audio r ecor ding and audio r ecor ding devices. If enact ed, t he Home Audio Recor ding Act would legalize t he home
t aping of copyr ight ed music in exchange for a modest levy on bot h t he r ecor ding equipment and blank t apes. The
one-t ime levy would be imposed on equipment and blank-t ape manufact ur er s and impor t er s and would be dis-
t r ibut ed t hr ough t he Copyr ight Royalt y Tr ibunal t o t he appr opr iat e copyr ight holder s of t he r ecor ded mat er ials.
Det er mi n a t i on of t h e Roya lt y Ra t e: The Home Audio Recor ding Act would r equir e manufact ur er s and
impor t er s of r ecor ding equipment and blank audiot apes t o pay a one-t ime levy per unit on t he fir st sale or dist r i-
but ion of t heir pr oduct in t he Unit ed St at es. The levy for audio r ecor ding devices would be set at 5 per cent of t he
pr ice for t he fir st domest ic sale, 20 per cent of t he pr ice char ged for dual audio r ecor ding devices, and 1 cent per
minut e of t he maximum playing t ime or a fr act ion t her eof in t he case of blank media.
These fees would be subject t o adjust ment ever y 5 year s, cont ingent on many differ ent fact or s, among t hem,
t he following
1.
2.
3.
4.
5.
t he value t o t he individual of t he r ight t o r epr oduce copyr ight ed wor ks;
t he compensat ion t hat would have been r eceived by t he copyr ight holder s if home copying wer e not pos-
sible;
t he benefit s der ived by t he consumer s, manufact ur er s, and impor t er s fr om t he use and dist r ibut ion of
t hese audio-r ecor ding devices or media;
t he pr oject ed impact on bot h copyr ight owner s and consumer s, as well as t he impact on t he st r uct ur e and
financial condit ion of t he var ious indust r ies involved; and
t he r elat ive r oles of copyr ight owner s, impor t er s, and manufact ur er s wit h r espect t o cr eat ive and t echno-
logical cont r ibut ion t o-t he development -of sound r ecor dings and musical wor ks.
Ot her fact or s t o be consider ed would include t he object ive of maximizing t he cr eat ion of new sound r ecor d-
ings and musical wor ks, r easonable est imat es of t he amount of audio r ecor ding devices or media not used for
infr inging pur poses, and t he development of new t echnologies for making audio r ecor dings for pr ivat e use.
Because t hese fact or s would be const ant ly changing, it might be necessar y t o dist inguish among differ ent
kinds of audio r ecor ding devices or audio r ecor ding media and t o est ablish differ ent levies t o ensur e fair compen-
sat ion t o t he copy-r ight holder s.
Collect i on of t h e Roya lt i es: The r oyalt ies fr om t he levy would be collect ed by t he Regist er of Copy-r ight s,
t o be deposit ed int o t he Tr easur y of t he Unit ed St at es aft er r easonable administ r at ive cost s had been deduct ed.
This pool of money would t hen be invest ed in int er est -bear ing U.S. secur it ies, ult imat ely t o be t ur ned over t o t he
Copyr ight Royalt y Tr ibunal for dist r ibut ion.
Ad mi n i st r a t i on of t h e Roya lt y Syst em: The monies collect ed fr om t he compulsor y license fee would be
dist r ibut ed ever y year . The Copyr ight Tr ibunal would specify a 30-day per iod in which any per son ent it led t o
r eceive par t of t he r oyalt y would file a st at ement of account for t he pr evious year . To be eligible t o r eceive a shar e
of t he r oyalt y fees, t he claimant would have t o be t he owner of t he copyr ight of a musical wor k or sound r ecor ding
t hat was included in eit her r adio or t elevision t r ansmissions, or dist r ibut ed t o t he public in t he for m of
phonor ecor ds or copies.
The claimant s would t hen have t o negot iat e in good fait h among t hemselves in an effor t t o r each a volunt ar y
agr eement on t he dist r ibut ion of t he r oyalt ies. A number of opt ions could be exer cised in t he negot iat ions
claimant s might agr ee t o t he pr opor t ionat e division of compulsor y licensing fees among t hemselves, t hey might
consolidat e t heir claims and file t hem joint ly or as a single claim, or t hey might appoint a common agent t o r e-
ceive payment on t heir behalf.
The Tr ibunal would t hen have t o det er mine whet her a cont r over sy exist ed among t he claimant s over t he
dist r ibut ion of t he r oyalt ies. If no such cont r over sy appear ed t o exist , t he Tr ibunal would dist r ibut e all r oyalt ies,
less administ r at ive cost s, t o t he ent it led copyr ight holder s, or t o t heir designat ed agent s. If a cont r over sy did ex-
ist , t he Tr ibunal would conduct an evident iar y pr oceeding t o det er mine how t he r oyalt ies should be dist r ibut ed.
All involved par t ies would be given t he oppor t unit y t o pr esent t heir views t o t he Tr ibunal. In t he meant ime, t he
Tr ibunal would be allowed t o dist r ibut e all fees t hat wer e not in cont ent ion, as long as it wit hheld an amount
sufficient t o sat isfy all claims st ill in disput e.
The Tr ibunal would be r esponsible only for t he fir st phase of r oyalt y dist r ibut ion, t o t he owner s of t he t wo
copyr ight s encompassed in ever y r ecor ded t une: t he musical composit ion and t he sound r ecor ding. The monies
collect ed fr om t he implement at ion of t his bill would t hen be shar ed among all ot her s r esponsible for t he cr eat ion
and pr oduct ion of a musical wor k on t he basis of negot iat ed cont r act ual agr eement s.
P r op osa l of t h e Mu si c Commu n i t y: The music communit y, consist ing of r ecor d companies, songwr it er s,
music publisher s, and per for mer s developed a model for t he shar ing and dist r ibut ion of t he home-t aping r oyal-
t ies gener at ed by t his bill, which t hey believed would be fair and r easonable t o all par t ies involved. They ar gued
t hat t heir plan would ensur e just compensat ion t o t hose whose wor ks wer e being r epr oduced wit hout aut hor iza-
t ion and would pr ovide incent ives for t he cr eat ion and disseminat ion of new musical wor ks. To accomplish t his
goal, t hey pr oposed t hat a Musical Ar t s Endowment be cr eat ed for t he benefit of aspir ing songwr it er s, musicians,
and vocalist s whose wor ks have not yet been published or r ecor ded. They also pr oposed t hat Cr eat ive Incent ive
Gr ant s be awar ded t o t hose whose r ecor ded wor ks had not yet achieved widespr ead popular it y.
Di st r i bu t i on of t h e Roya lt i es: The fir st st ep in t he pr oposed dist r ibut ion syst em, aft er t he r oyalt ies had
been t ur ned over t o t he Copyr ight Royalt y Tr ibunal, would be t o allocat e 2 per cent of t he r oyalt y pool t o t he Musi-
cal Ar t s Endowment t o encour age and nur t ur e new songwr it er s and r ecor ding ar t ist s, and t o pr omot e t he devel-
opment of new and exper iment al t ypes of music. The money would be divided equally bet ween The Songwr it er s
Guild Foundat ion (for lyr icist s and composer s) and t he Nat ional Endowment for t he Ar t s (for aspir ing vocalist s
and musicians).
The r emaining r oyalt ies would t hen be dist r ibut ed among bot h copyr ight holder s of t he musical composit ion
and sound r ecor ding and t he union or ganizat ions r epr esent ing musicians and vocalist s. Fir st , 2 per cent of t he
r oyalt ies would be designat ed for funds t o suppor t musicians and vocalist s (funds now in exist ence or t o be est ab-
lished by t he Amer ican Feder at ion of Musicians (AFM) and t he Amer ican Feder at ion of Television and Radio
Ar t ist s (AFTRA). Of t hat 2 per cent , 1 3/4 would be assigned t o AFM funds and 1/4 assigned t o AFTRA funds.
The r emaining r oyalt ies would be divided bet ween t he t wo copyr ight pools. Twent y-t hr ee per cent of t he
r oyalt ies would be allot t ed t o t he Musical Composit ion Pool t o be dist r ibut ed among t he lyr icist s, composer s, and
publisher s, and 75 per cent of t he r oyalt ies would be allot t ed t o t he Sound Recor ding Pool t o be dist r ibut ed among
t he r ecor ding ar t ist s and r ecor d companies.
Each of t hese copyr ight pools would be fur t her divided int o separ at e fundst he air play and r ecor d-sales
pools. An annual sur vey would be conduct ed t o det er mine what pr opor t ion of t he r oyalt ies would be used t o com-
pensat e copy-r ight holder s for t heir losses based on t he amount of air play a musical r ecor ding had r eceived and for
t he sales t hat t he r ecor ding had enjoyed. The r oyalt ies would be divided bet ween t hese t wo funds based on t he
per cent ages dict at ed by t he sur vey.
The air play funds in bot h copyr ight pools would fur t her be weight ed t o r eflect t he size of t he audience.
Eit her ASCAP or BMI would be able t o pr ovide t he necessar y infor mat ion t o achieve t he appr opr iat e weight s.
Bot h societ ies have developed t heir own for mulas for dist r ibut ing r oyalt ies t o t he appr opr iat e copyr ight holder s
for t he public per for mances of live music and music per for med over t he r adio or t elevision.
The weight ing of t he r ecor d sales pool would t ake int o account t he differ ent economic impact t hat home
t aping would have if it displaced t he sale of a fr ont -line album as compar ed wit h t he sale of a budget -line album.
To account for t he differ ent ial in loss, weight ing would be done based on t he pr ice cat egor y of t he phonor ecor d.
The necessar y pr icing infor mat ion could be obt ained fr om r ecor d companies.
Of t hese r oyalt ies, 80 per cent would be based on dir ect pr opor t ion and 20 per cent on Cr eat ive Incent ive
Gr ant s. These gr ant s would be awar ded t o t hose most in need of addit ional incent ives. Cr eat ive Incent ive Gr ant s
would encour age t he cr eat ion and disseminat ion of new musical wor ks and would benefit cr eat or s, r ecor d compa-
nies, and music publisher s. Eligibilit y for a Cr eat ive Incent ive Gr ant would be det er mined on t he basis of t he
t ot al pr evious payment s made on a pr opor t ional basis fr om t he r oyalt y pools for each musical r ecor ding. Those
r eceiving t he lowest per cent age would be eligible for gr ant s.
See U.S. Congr ess, Senat e J udiciar y Commit t ee, Hom e Au d i o R ecor d i n g Act s hear ings befor e t he Cor n m it t ee on t he J udici-
ar yand it s Subcommit t ee on Pat ent s, Copyr ight s, and Tr ademar ks, Ser ial No. J -99-69, Oct . 30,1985, Mar . 25 and Aug. 4, 1986.
t apes, t he finance minist r y should t ar get t he
audio and video car r ier s. They suggest t hat
t h e VAT r a t e be cu t on r ecor ds a n d
pr er ecor ded t apes, fr om 18 t o 7 per cent , so
t hat t he r ecor ding indust r y can cont inue it s
economic gr owt h. It is est imat ed, however ,
t hat a cut in t he VAT r at e on r ecor ds and
pr er ecor ded t apes would cost t he gover nment
$315 million a year in lost r evenue.
94
Officials fr om t he Fr ench IFPI (Int er na-
t ional Feder at ion of Phonogr aphic Indus-
t r ies) gr oup, Syndicat Nat ional de lEdit ion
Phonogr aphique (SNEP), also fear t hat t ax
r educt ions for blank audiot apes could fur t her
har m t he r ecor ding indust r y, alt hough t hey
believe t he r educt ion for videot apes may help
spur sales of t he new CD video for mat . A simi-
lar cut in VAT for r ecor ded and pr er ecor ded
t apes in December of 1987 has been gener ally
per ceived as having helped r evive t he com-
mer cial r ecor d indust r y.
95
Au s t r a l i a
96
Aust r alia is t he fir st English-speaking coun-
t r y t o appr ove a blank-t ape levy. Aft er a dec-
ade of lobbying by t he r ecor d indust r y, t he
Aust r alian Gover nment imposed a blank-t ape
levy on audiot apes and legalized home t aping
of audio r ecor dings. The Aust r alian Gover n-
ment will not r eceive benefit s fr om t he levy,
nor will it be r esponsible for it s administ r a-
t ion. A nonpr ofit agency monit or ed by t he
Aust r alian Cont empor ar y Music Develop-
ment Co. has been est ablished and a boar d of
dir ect or s, chosen fr om t he ent er t ainment in-
dust r y, has been appoint ed t o administ er col-
lect ion and dist r ibut ion of t he levy. The init ial
funding was pr ovided by t he Depar t ment of
Employment , Educat ion, and Tr aining, and it
is expect ed t hat 15 per cent of t he r evenues
gener at ed fr om t he blank-t ape r oyalt y will be
used t o fund t he pr ogr am.
Royalt ies will be dist r ibut ed on t he basis of
alr eady exist ing syst ems designed t o calculat e
t he amount of sales and air play a par t icular
r ecor ding enjoys. The amount of t he levy has
not yet been det er mined, but it is expect ed t o
be in t he r ange of 20 t o 50 Aust r alian cent s for
each 60-minut e casset t e sold. Special excep-
t ions will be made for gr oups and individuals
who will not be using blank t apes t o copy
copyr ight ed music gr oups such as schools
and inst it ut es for t he blind. The Aust r alian
Recor d Indust r y Associat ion est imat es t hat
t he levy will r aise millions of dollar s, but
much less t han t he 30 million Aust r alian dol-
lar s per year t hat t he r ecor ding indust r y
claims t o lose because of home t aping.
97
Most
of t he r oyalt ies will be dist r ibut ed t o Aust r a-
lian ar t ist s, alt hough r oyalt ies will also be dis-
t r ibut ed t o t hose count r ies t hat oper at e under
t he same t ype of r oyalt y syst em, including
West Ger many and Fr ance. The Unit ed St at es
and England, alt hough major supplier s of for -
eign music, will not be eligible t o r eceive any
r evenues since t hey do not have r ecipr ocal ar -
r angement s wit h Aust r alia.
B e l g i u m
98
In Belgium, a pr oposed levy on blank t apes
would be based on 8 per cent of t he r et ail pr ice
of a blank t ape. Revenues gener at ed fr om t his
levy would be divided int o equal par t s, wit h
Wr ocq, Fr ench To Cut VAT Rat es for Casset t es: Move AfTect s Pr er ecor ded Videos, Blank Audiot apes, op. cit ., foot not e 93, p. 91.
s
I bid.
96Mat er i~ for t his s-ion is ~ken f
r om:
G]enn A. Baker , Aust r alian Cbvt Appr oves Blank-Tape ~y~t y pl~~ B~l~~~ vol. 1~>
No. 24, J une 11, 19S8, p. 76; and Debbie Kr ueger ,
(
OZ Imposes a Blank-Tape Levy Giving Royalt ies t o Disk Ar t i st s, Va r i et y, vol.331,
No. 6, p. 84, J une 1, 1988.
g7fi=r ) op. cit ., foot not e @P. .
*Mat er i~ for t his ~t ion is ~en fr om: Mar c Maes, Belgium Eyes Blank Tape LwY, Bi l l bcxd , vol . I Q No. 44, Od . 29, 19~, pp.
86, 88.
one par t being dist r ibut ed among t he aut hor s,
ar t ist s, and manufact ur er s; and t he ot her par t
going t o t he t hr ee language communit ies
(Flemish, Fr ench, and Ger man), who would
use t he money t o suppor t ar t ist s and cult ur al
inst it ut ions in each communit y. The pr oposal
also calls for an ext ension of t he copyr ight pe-
r iod on aut hor s wor ks fr om 50 t o 70 year s,
t her eby enabling t he t hr ee communit ies t o
benefit fr om t he addit ional 20 year s.
Belgr amex, t he Belgium feder at ion of ar t -
ist s and manufact ur er s, has welcomed t he
pr oposals, but t hinks t hat t he levy should be
based on t he act ual playing t ime of t he t ape,
r at her t han t he r et ail pr ice. It would also like
t o s ee a levy on r ecor din g equ ipmen t .
Belgr amex believes t hat t he r evenues should
be used t o compensat e t hose t hat ar e har med
(t he manufact ur er s, ar t ist s, and aut hor s)
r at her t han dist r ibut ed t o t he t hr ee language
communit ies. It will be some t ime befor e new
legislat ion is dr aft ed, if at all.
Un i t ed Ki n gd om
In England, t he new Copyr ight , Pat ent , and
Design Law of 1988 does not change t he legal-
it y of home t aping of copyr ight ed music, con-
sider ed an infr ingement of copyr ight law.
99
Nor does t he law impose a levy or t ax on blank
audiot ape and videot ape t o compensat e copy-
r ight owner s for har ms fr om home t aping.
100
The Br it ish Gover nment s decision not t o sup-
por t a blank-t ape levy came 2 year s aft er it
had, in a whit e paper , det er mined t he impo-
sit ion of a blank-t ape levy t o be t he best solu-
t ion t o t he home-t aping pr oblem and had
pr omised t o enact legislat ion accor dingly.
101
The U.K. Tr ade and Indust r y Minist er ,
Kennet h Clar ke, had ar gued t hat such a levy
would be bot h wr ong and indefensible, lop
wit h t he gr eat est weight falling unfair ly on
consumer s, especially on gr oups such as t he
visually handicapped. He fur t her ar gued t hat
t he inequit ies placed on t he consumer would
far out weigh any benefit s r esult ing fr om t he
levy, wit h t hose t hat ar e alr eady financially
well-off r eceiving most of t he benefit s. In addi-
t ion, he ar gued t hat administ r at ive cost s
would be high and t he collect ion and dist r ibu-
t ion of t he pr oceeds would r equir e a new bu-
r eaucr acy.
Suppor t for a levy was voiced by such
gr oups as t he Br it ish Music Copyr ight Re-
for m Gr oup (MCRG), t he Br it ish r ecor d in-
dust r y, and even t he consumer s t hemselves.
The r esult s of a U.K. opinion poll, announced
on J une 20, 1988 by t he Music Copyr ight Re-
for m Gr oup, indicat ed t hat 60 per cent of con-
sumer s r egar ded a 10-pence (18 cent s) levy on
blank t ape as t he best solut ion t o t he home-
t aping pr oblem, 15 per cent suppor t ed a
spoiler device in pr er ecor ded mat er ial, 2 per -
cent favor ed pr osecut ing home t aper s, and 23
per cent had no opinion. The st udy also indi-
cat ed t hat t he mor e act ively consumer s ar e
engaged in home t aping, t he mor e likely t hey
ar e t o suppor t t he r oyalt y solut ion, which
would legit imize home t aping.
103
Some est imat e t hat a home-t aping r oyalt y
would pr oduce t he equivalent of $12.25 mil-
lion a year .
104
Accor ding t o one est imat e, t he
Whe following is t aken fr om: Nick Rober t shaw, U.K Govt Reject s Home-Tape Levy, Bi l l bom d , vol . 100, No. 20, pp. 3, 84; and
U.K Kills Tape Tax, TVDi gest , vol. 27, No. 44, Nov. 2, 1987, p. 15.
% ch. 3, pp. 35-38 for a mor e det ailed descr ipt ion of t he new copyr ight law.
loI ~&fiShaw, lJ.K Gvt Reject s Home-Tape Levy, op. cit ., foot not e ~, P. 3.
102~id.
10qM1ke Hennessey,
UK Poll Shows Consumer s Favor Blank Tape Levy, Bi l l boa r d , vol. 100, No. 27, J uly 2, 1988, p. 84.
104u.K Group Ur&s Home Taping ~w: Musiclms J oin Ma j or Dr i ve t o Wi n Over ~vt , Bi l J ~~, V()]. 100, No. 10, MEU. b, 1!)88,
p. 4. .
r ecor ding indust r y suffer s losses of appr oxi-
mat ely $1.3 billion due t o home t aping, and 80
million of t he blank t apes sold in 1987 wer e
u s ed t o copy copyr igh t ed mu s ic.
105
T h e
MCRG est imat es t hat 2.5 t imes as much mu-
sic is being copied as is being sold.
106
Yet despit e imput ed home-t aping losses,
st at ist ics r eleased in 1988 by t he Br it ish Pho-
nogr aphic Indust r y show t hat t he r ecor ding
indust r y is enjoying subst ant ial gr owt h and
t hat t he LP business is act ually enjoying a r e-
sur gence. The sales value of shipment s of U.K.
r ecor dings r ose 23 per cent t o $1.04 billion
over all, wit h album sales r ising 27 per cent t o
$887.7 million, CD sales up 75 per cent t o
$238.9 million, and casset t e sales r ising 24
per cent t o $365.7 million.
107
Hopes wer e r evived for a levy on May 24,
1988, when member s of a par liament ar y com-
mit t ee vot ed 12-10 in favor of an amendment
empower ing t he gover nment t o int r oduce t he
cont r over sial levy.
108
However , t he House of
Commons appr oved a gover nment amend-
ment r eject ing t he levy pr ovision, on J une 25,
by a vot e of 134 t o 37.
109
The MCRG t hen t ook
it s fight for a levy t o t he Eur opean Economic
Communit y (EEC), wit h t he aim of lobbying
t he EEC t o adopt t he levysolut ion.110 But t he
EEC, in a gr een paper , decided inst ead t hat
each gover nment should follow it s own views
on t he issue.111
C a n a d a
112
The Canadian Gover nment r ecent ly
placed it s 1924 Copyr ight Act wit h a new
r e-
act
t hat gr ant s ar t ist s t he r ight t o cont r ol t heir
wor ks and ext ends copyr ight pr ot ect ion t o
comput er pr ogr ams as well.113 The Copyr ight
Act of 1924 cont ained pr ovisions for a com-
pulsor y license, wher eby r ecor ding compa-
nies could aut omat ically obt ain t he r ight t o
r ecor d any song made and sold in Canada sim-
ply by paying a st at ut or y r oyalt y of 2 cent s per
playing sur face.
IO~Nick ~~~shaw, ~ot ing Simon Coombs, Conser vat ive Par liament Member , U.K Cbvt Reject s Home-Tape LevY, op. cit .,
foot not e 99, p. 3.
1~U.K Gr oup Ur ges Home TapingLeW: MusiciansJ oin Mqjor Dr ive t o Win Over Govt ,Z3iMoc@ vol. 100, No. IO, Mar ch 5,1988,
p. 4.
IOTPet er J ones, U,K Sales ~]ie Dir e pr ~i~ions: Despit e Pr oblems, Music Biz Shows Gr owt h, BiUboat i, VOI. 100, No. 22, May 28,
1988, pp. 1,83.
mNick Rober t shaw, Hopes Revived for U.K Tape Levy, Bi l h xm d , vol. 100, No. 24, J une 11, 1988, p. 76.
IOgMike H
enne
ss
ey
, U.K Commons mj~t s Tape Levy: IFPI Decr ies Mor al Injust ice,
Bi l l boa r d , vol. 100, No. 31, Aug. 6, 1988, p.
3.
1 I o J
e r e m y
CooPrnan,
Two Set backs Hit U.K St r uggle for Blank Tape Levies, Va r i et y, vol . 332, No. 5, Aug. 24, 1988, p. 104.
11 lcommission of t h
e
Eur oPm Communit ies, Gr een Pa per on Copyr i gh t a n d t h e Ch a l l en ge of T ech n ol ogy Copyr i gh t I ssu es R e-
qu i r i n g I m m ed i a t e Act i on , COM (88) 172 final, Br ussels, J une 7, 1988.
1 lzMat er i~ for t his ~t ion is incor Wr at ~ fr om: Ear l Gr een, Canada at Long Last is Replacing Copyr ight Act ar ound since 1924,
Va r i et y, vol . 331, No. 8, J une 15, 1988, p. 31; Kir k LaPoint e, Canada Passes Copyr ight Refor ms, BiWoat i, vol. 100, No. 24, J une 11,
1988, pp. 1, 78; Kir k LaPoint e, Commons: No Mor e Delay Refor m Bill Ret ur ns t o Senat e, BiUboaml, vol. 100, No. 22, May 28,1988,
p. 75; Kir k LaPoint e, Copyr ight Act Opens Door for New Mechanical Rat es, Bi l l boa r d , vol. 100, No. 26, J une 25, 1988, p. 71; Kir k
LaPoint e, New Elect ions Kill Br oadcast Plan: Deal t o Scr ap Tar iffs on Hold, Bi l l bou m 2, vol . 100, No. 42, Oct . 15, 1988, p. 72; Kir k
La.Point e, Senat e Blast ed for Copyr ight St and: CRIA Head Decr ies Cult ur al Assassins, Bi l l boa r d , vol. 100, No. 21, May 21, 1988, p.
66; Kir k La.Point e, Senat e Digs In: Showdown May Loom on Copyr ight Bill, Bi l f boa t i , vol. 100, No. 12 Mar . 19, 1988, p. 84; Kir k
LaPoint e, Senat e: No Deal on Copyr ight Bill Refor m Advocat es Suffer Major Set back, BiUboaml, vol. 100, No, 20, May 14, 1988, p.
70; Kir k LaPoint e, Senat e Soft ens on Copyr ight Amendment Issue, Bi l l boa ml , vol . 100, No. 23, J une 4, 1988, p. 58; Chr is Mor r is,
Canada Near s Mechanical Rat es, Bi l l boa t d , vol . 100, No. 30, J uly 23, 1988, pp. 1, 76; OTA st afTint er view wit h and mat er ials r eceived
fr om t he Canadian Musical Repr oduct ion Right s Agency Lt d.
11 sw Ch. 3, pp. 3M9 for a det ailed descr ipt ion of t he new copyr ight law.
The new Copyr ight Act gives publisher s t he
r ight t o gr ant a license on t er ms and at a r at e
st ipulat ed by t hem, or t o r efuse t o issue a me-
chanical license. The new act also pr ovides a
syst em t o help wr it er s and publisher s negot i-
a t e a nd collect copyr ight fees. The 2-cent -a -
song compulsor y license has been abolished,
giving cr eat or s and r ecor d companies t he op-
por t unit y t o negot iat e new r at es t hat ar e in
line wit h r at es in ot her count r ies.
114
In addit ion, t he new Copyr ight Act pr ovides
har sher penalt ies for copyr ight infr ingement .
The pr evious ma ximum pena lt y wa s a $200
fine. It is now set at $25,000 and 6 mont hs in
ja il on summa r y indict ment a nd $1,000,000
and 5 year s in jail upon convict ion on indict -
ment .
The second inst allment of copyr ight legisla-
t ion is expect ed t o deal wit h t he home copying
of r ecor ds , vi deot a pes , a n d compu t er pr o-
gr a ms , t h e di s t r i bu t i on of r oya l t i es fr om
video r ent a ls, ca ble fees for r et r a nsmission,
and copyr ight pr ot ect ion for comput er chips.
The r ecor ding indust r y, ar guing t hat home
t aping has depr ived t hem of millions of dol-
lar s in r evenues, has fought long and har d for
r evisions t o t he old Copyr ight Act . The r esult s
of a r ecent consumer sur vey commissioned by
t he Music Copyr ight Act ion Gr oup, which in-
cludes t he count r ys lea ding t r a de or ga niza -
t ions, indicat e t hat home-t aping losses t o t he
r ecor ding indust r y ma y exceed $600 million
(Ca n a di a n ) or 68 mi l l i on i n u n i t a l bu m
sdes.115 pr evious st udies est imat ed losses be-
t ween $50 million and $100 million.116 In t his
fir st -ever consumer sur vey by t he music busi-
ness, appr oximat ely 60 quest ions wer e asked
of about 500 people in t elephone conver sa-
t ions t hat aver aged about 14 minut es. The
findings r evealed not only high incidence of
home t aping (63 per cent of t hose sur veyed in
t he 15 t o 54 age gr oup had made a home t ape
wit hin t he pr evious year ), but also st r ong sup-
por t for compensat ion t o t he copyr ight owner
for income lost due t o home t aping, wit h t he
heaviest t aper s favor ing a blank-t ape levy.
Despit e t hese est imat ed losses, t he Cana-
dian r ecor ding indust r y has enjoyed it s fift h
st r aight year of r evenue gr owt h. The r esult s of
a St at ist ics Canada st udy
117
show t hat in t he
year ending Mar ch 1987, bot h Canadian im-
por t s and expor t s had incr eased subst ant ially
and t he indust r y exper ienced a 10.5 per cent
incr ease in r evenues, despit e a decline in t he
mar ket shar e of albums, fr om 78 t o 31 per -
cent , wit h a slight r ise in t he mar ket shar e for
casset t es. CD sales t r ipled fr om 4
cent , pr oviding t he major boost in
Ot her Count r ies
118
Hu n ga r y. Hungar y imposed
t o 12 p e r -
r even u es.
a levy on
blank t apes in 1983 t hat amount s t o 8 per cent
of t he selling pr ice of a blank t ape. Revenues
fr om t he levy syst em a r e dist r ibut ed a mong
t he copyr ight holder s of r ecor dings, wit h 50
per cent going t o t he aut hor s, 30 per cent t o t he
per for mer s, and 20 per cent going t o t he pr o-
du cer s of a u di o r ecor di n gs . I n t h e ca s e of
video r ecor dings, 70 per cent is dist r ibut ed t o
t he aut hor s and 30 per cent t o t he per for mer s.
The per for mer s sha r es a r e not individua lly
I I d~er months of neWtiatlon, the new rnechanic~ r at es (in effect unt il Oct ober 1990) wer e f~ed at 5.25 Canadian cent s per t r ack
for all r ecor ds sold aft er Oct . 1, 1988, r egar dless of when t he r ecor d was r eleased. Ext ended wor ks of mor e t han 5 minut es will r eceive
1.05 cent s for each addit ional minut e or fr act ion t her eof.
11 scanadi~ Independent Recor d pr oduct ion Associat ion (CIRPA), A S t u d y On Hom e Ta pi n g, pr epr ed on ~half of The Music
Copyr ight Act ion Gr oup, ISBN 0-921777-02-7, 1987.
1 IS& ~rk ~Ointe, Canada St udy: Copying IS Rampant , Bd l boa m l , VO]. 100, No. 12, Mar . 19, 1988, pp. 1, 106.
1 T 7~r k ~olnt e, ~~st at s Canada Sumeys 8&87 Music Wene: Rewlr t ReVea]s over ~} St r engt hening of Indust r y, Bi l l bocmi , VO]. 100,
No. 31, J u]y 30, 1988, p. 62.
1 18Materia] fc)r this s=tjon taken fr om: Yvonne Bur ckhar dt , Legislat ion on pr ivat e Copying in Eur ope and It s Implement at ion,
and Yvonne Bur ckhar r lt , New Right s of Per for mer s, op. cit ., foot not e 90.
dist r ibut ed, but r at her used for social pur -
pos es .
119
The Bur eau for t he Pr ot ect ion of
Aut hor s Right s collect s t he r evenues fr om
t he levy and t hen t r ansfer s t he amount due
per for mer s t o t he Associat ion of Hungar ian
Ar t Wor ker s Unions, which dist r ibut es t he
funds. The pur pose of t he Associat ion is t o
pr ovide suppor t t o t he pr ofession, t o per for m-
er s of all ages, and t o sponsor st udy t r ips,
scholar ships, fest ivals, et c.
I cel a n d .
120
Iceland int r oduced a levy on
blank audiot apes and videot apes, as well as on
r ecor ding equipment in 1984. The levy was set
a t 10 I cela n dic Kr on en (19 cen t s ) for
audiot apes and 30 Icelandic Kr onen (57 cent s)
for videot apes. The r ecor ding equipment is
levied at four per cent of t he impor t pr ice or
t he manufact ur ing pr ice. Eight y-five per cent
of t he t ot al r evenue collect ed is dist r ibut ed;
t he r emaining 15 per cent is put int o a cult ur al
fund super vised by t he Minist r y of Educat ion.
The pr oceeds fr om t he audiot ape levy ar e col-
lect ed by one body, and dist r ibut ed t o t he per -
for ming ar t ist s and pr oducer s (46 per cent ),
music aut hor s (46 per cent ), and lyr ic wr it er s
(8 per cent ). The per for mer s shar e is depos-
it ed int o a fund for t he pr omot ion of t he pr o-
fession, par t icular ly for music schools.
121
West Ger m a n y. West Ger many has a levy
on blank t apes in addit ion t o one on r ecor ding
equipment . Er ich Schulze, Pr esident and
Gener al Manager of Ges el l s ch a ft fu r
musikalische Auffuhr ungs - und mechanische
Ver vielfalt igungsr echt e (GEMA), has com-
ment ed t hat t he int r oduct ion of a blank-t ape
levy has not had a negat ive impact on t he
compet it ive sit uat ion of West Ger man or for -
eign t ape manufact ur er s. On t he cont r ar y, he
asser t s t hat pr oduct sales have r isen st eadily,
while r et ail pr ices have act ually declined con-
sider ably.
122
The levy is set at 2.50 Deut sche mar ks
($1.35) for audio r ecor ding equipment , 18 DM
($9.78) for video equipment , .12 DM (6 cent s)
per hour of r ecor ding t ime for audiocasset t es,
and .17 DM (9 cent s) per hour of r ecor ding
t ime for videocasset t es. Revenues fr om t his
syst em, which t ook effect J uly 1, 1985, ar e dis-
t r ibut ed among t he var ious collect ion socie-
t ies for music aut hor s (42 per cent ), per for m-
er s and pr oducer s (42 per cent ), and lyr ic
aut hor s (16 per cent ). Gesellschaft zur Ver wer -
t ung von Leist ungsschut zr et ht en (GVL), t he
per for mance r ight s societ y, dist r ibut es t he
pr oceeds accor ding t o t he same scheme used
for t he dist r ibut ion of r evenues fr om t he
br oadcast ing of commer cial r ecor ds, wit h t he
per for mer s r eceiving 64 per cent of t he shar e
and t he pr oducer s r eceiving t he r emaining 36
per cent .
In 1985, West Ger many collect ed 50 million
DM ($27,174,000),16 million DM ($8,695,000)
of it in t he audio field and 34 million DM
($18,000,000) of it in t he video field. Of t his
amount , t he per for ming r ight s societ y r e-
ceived 3.9 million DM ($2.1 million) fr om it s
audio r ecor ding equipment levy, and 2.4 mil-
lion DM ($1.3 million) fr om it s bla nk-
audiot ape levy. In addit ion, GVL r eceived 4.5
million DM ($2.4 million) fr om it s video
equipment levy, and 2.1 million DM ($1.1 mil-
lion) fr om it s blank-videot ape levy. Of t his
amount , t he per for mer s r eceived 64 per cent
and t he pr oducer s 36 per cent , which r esult ed
in 8.2 million DM ($4.4 million) being dist r ib-
ut ed among t he per for mer s.
123
I IgJ . L. Tour nier , op. cit ., foot not e 92, t able 2.
~he following sect ion is t aken fr om J .L. Tour nier , op. cit ., foot not e 92, t able 2.
121yvonne Burcfiwdt,~~~~~]ationon privateCopfing in Europ ~d Its Imp]emen~tion, op. cit ., foot not e ~, p. 10.
lzzEr ich &-hu]ze, pr esident and Gener al Manager , GEMA, let t er t o 0IA, J une 7, 1989.
1 z~vonne BUr cW~t , ~t ~~s]at ion on pr ivat e Copfing i
n
Eur ope ~d It s 1mp]emen~t ion, op. cit ., foot not e W, pp. 5-6.
In 1987, Wes t Ger ma n y col l ect ed
93,500,000 DM ($50,080,343) in t ot al blank-
t ape r evenues; 28,600,000 DM ($15,318,693)
in t he audio field.
124
S wed en . Sweden, unlike t he ot her coun-
t r ies discussed a bove, ha s int r oduced a t a x
syst em on blank t apes, in which t he r evenues
collect ed fr om t he t ax go t o t he gover nment ,
which decides what t o do wit h t he funds. The
r at e is set at 1.50 SKr (23 cent s) per audiot ape,
a nd 15.00 Skr ($2.35) per Videot a pe.
125
Two-
t hir ds of t he r evenues collect ed ar e used for
unspecified pur poses; 80 per cent of t he r e-
maining one-t hir d is put int o a cult ur al fund
and t he r emaining 20 per cent divided among
t he a ut hor (40 per cent ), per for mer (30 per -
cent ) and t he pr oducer (30 per cent ). The r eve-
nues due t he per for mer ar e t r ansfer r ed t o t he
per for mer s collect ion societ y (SAMI ), which
deduct s half for administ r at ion cost s and di-
vides t he ot her ha lf a ccor ding t o t he sa me
scheme used for dist r ibut ing r evenues fr om
t he br oa dca st ing of r ecor ds. This lea ves t he
per for mer wit h a r elat ively small shar e of t he
r evenues fr om t he t ape t ax.
In 1986, t he per for mer s collect ing societ y,
SAMI collect ed 900,000 SKr ($154,800) fr om
it s t ape t ax, half of which was used for collec-
t ive pur poses and t he r est dist r ibut ed indi-
vidually t o per for mer s.
126
Fr om J une 1987 t o
J une 1988, Sweden collect ed 130,000)000 SKr
($20,300,000) fr om it s blank-t ape t ax. Of t his
amount , 3,000,000 SKr ($470,000) was dis-
t r ibut ed t o r ight s holder s in t he music field,
and 848,000 SKr ($132,700) t o pr oducer s of
phonogr ams. The st at e r et ained 127,000,000
SKr (19)830,000) as fiscal r evenue.
127
The In-
t er nat ional Feder at ion of Phonogr aphic In-
dust r ies not es t hat t he amount dist r ibut ed t o
r ight owner s has r emained unchanged for t he
past t hr ee year s, while t he t ot al r evenue col-
lect ed has incr eased subst ant ially.
128
Tables 5-1,5-2, and 5-3 summar ize t he leg-
islat ion and implement at ion of levies and
t axes on pr ivat e copying in Aust r alia, Aust r ia,
Finland, Fr ance, West Ger many, Hungar y,
Iceland, Nor way, Por t ugal, Spain, and Swe-
den.
124J. L. Tollrn icr, op. cit ., foot not e 92, t able 2.
251hid., t able 3.
I z~vr jnne BU r c k h~r (] t , Legi sl at i on On Pr ivat e Copying In Eur ope and It s Implement at ion, op. cit ., foot not e ~, P. 12.
IZ7J . L, Tounier , op. cit ., foot not e 92, table 3.
1 2 8 ~ 1 ~ .
Table 5-1 .Private Copying Roya lt i es - Legislation and Implementation
Count r y Dat e of law Basis of r oyalt y Rat e of r oyalt y Benef i c i ar i es
Australia Copyright Amendment Blank audio tape: Not yet decided Producers of phonograms
Act 1989 Aut hor s
Austria Law No. 321 of Blank audio tape: AS 1.60/h (USD 0.12) Producers audio/video
2 July 1980 Special rate:AS 2.40/h (USD 0.18), Authors
when no contract Performers
Blank video tape: AS 2.56/h (USD 0.19)
Special rate:AS 3.85/h (USD 0.29),
when no contract.
Finland Law No. 442 of Blank audio tape: FM 1.8/h (USD 0.41) Authors
8 June 1984 FM 0.03/min
Blank video tape: FM 3.6/h (USD 0.82) Performers
FM 0.06/min
Producers audio/video
France Law No. 85-660 of Blank audio tape: FF 1.5/h (USD 0.24) Authors
3 July 1985 Blank video tape: FF 2.25/h (USD 0.36) Performers
Germany 1965 Copyright Law , Blank audio tape: DM 0.12/h (USD 0.06) Authors
(Federal as amended Blank video tape: DM 0.17/h (USD 0.09) Performers
Republic) 23 May 1985 Audio hardware: DM 2.50 per item (USD 1.34) Producers audio/video
Video hardware DM 18.00 per item (USD 9.64)
Hungary Decree No. 15 of Blank audio tape: 8% of sale price Authors
20 November 1982 Blank video tape: 8% of sale price Performers
Iceland LAw No. 78/1984 of Blank audio tape: IK 10 per piece (USD 0.19) Authors
30 May 1984 Blank video tape: IK 30 per piece (USD 0.57) Performers
Audio hardware: 4% of sale price Producers audio/video
Video hardware: 4% of sale price
Portugal Law No. 45/85 of Blank audio tape: to be decided Authors
17 September 1985 Blank video tape: Performers
Audio hardware: Producers audio/video
Video hardware:
Spain Law No. 22/1987 Blank audio tape: to be decided Authors
November 1987 Blank video tape: Performers
Decree of 21 March 1989 Audio hardware: Producers audio/video
Video hardware:
NOTE: Exchange Rat es at 13 March 1989
SOURCE: IFPI data provided by International Federation of Musicians, July 1989
Table 5-2.-Taxation on Private Copying
Amount r et ai ned
Total Revenue Amount distributed by State as
Count r y Dat e of law Basis of t ax Rat e of t ax collect ed t o r ight ow ner s fiscal r evenue
Norway LaW No 74 entered Blank audio tape: NOK 3.00 per tape
into force on (USD 0.44)
1 January 1982 Blank and
pre-recorded video
tapes: NOK 15.00 per tape
(USD 2.21)
Recording equipment:
(audio/video) N/A
1988 tape levy
NOK 45,000,000 NOK 25,000,000 NOK 15,000,000
(USD 6,621 ,900) (USD 3,679,180) (USD 2,207,500)
(NOK 4,000,000 or
USD 588,600 for
producers of phonograms)
Hardware: audio/video
NOK 65,000,000 Nil NOK 65,000,000
(USD 9,585,000) (USD 9,565,000)
Sweden* Law of 24 June 1982 Blank audio tape: SK 1.50 per tape June 87/June 88
(came into force (USD 0.23) SK 130,000,000 SK 3,000,000 SK 127,000,000
1 July 1982) Blank and (USD 20,300,000) (USD 470,000) (USD 19,830,000)
pre-recorded video SK 15.00 per tape to right owners in
tapes: (USD 2.35) the music field
including SK 848,000
(USD 132,700) to
producers of phonograms
NOTE. *It should be noted that the amount distributed to right owners has remained unchanged for the past three years whereas the total revenue collected by the State has increased substantially
Exchange rates at 13 March 1989
SOURCE: IFPI data provided by International Federation of Musicians, July 1989
Table 5-3.-Private Copying Royalties - Distribution
Country Gross revenue Distribution among right owners Cultural fund/social fund
Australia not yet implemented Audio
2/3 producers 15% Cultural/social fund
1/3 authors
(producers have agreed to give 1/3 to
performers)
Austria 1988 Audio
Local currency 17% producers of phonograms (LSG)
Audio: AS 23,254,287
17% performers (recorded performances) (LSG)
(USD 1,771,080) 3% performers (OSTIG - live performances) 51% of the total
63% authors (49% Austro-Mechana, 14% Literar remuneration must be used
Mechana & VG Rundfunk) for social and cultural
purposes by collecting
societies.
Video: AS 83,113,315 Video
(USD 6,330,032) 4% audio producers and performers (LSG)
3.9% performers (OSTIG - VBK)
14.8% authors (literary works)
Total: AS 106,637,602 28.7% authors (musical works)
(USD 8,101,1 12) 22.8% film/video producers
25.8% broadcasters (VG Rundfunk)
Finland 1987
(1/3 of total income distributed) 66% Cultural Fund for the
Audio: FM 13,937,813 Audio
promotion of national
(USD 3,198,946) 25.5% producers of phonograms cultural investment in
25.5% performers Finnish phonograms and
44% authors (musical works) video productions.
5% writers and publishers
Video: FM 30,606,371 Video
(USD 7,070,513) 12.8% authors (musical works)
3.2% producers of phonograms
6% recording artists
Total: FM 44,744,184 30% actors/choreographers/dancers
(USD 10,269,478) 6% directors
12% authors (literary works)
30% journalists/interpreters/scenery and costume
designers and cameramen
France 1988 (75% of income distributed to individual right The collecting societies
owners) must use 25% of revenue for
Audio: FF 103,165,757 Audio
the promotion of audio/
(USD 16,313,954) 50% authors/publishers of musical wor ks audiovisual productions
25% performers and live performances.
25% producers of phonograms
Video: FF 297,674,556 Video
(USD 47,063,171) 33% authors
33% performers
Total: FF 400,660,313 33% video/film producers
(USD 63,377,125)
Table 5-3. - Private Copying Royalties - Distribution (continued)
Country Gross revenue Distribution among right owners Cultural fund/social fund
Germany 1987 Audio
None by law but the
(Federal Audio: DM 28,600,000 42% authors/publishers of musical works (GEMA) collecting societies
Republic) (USD 15,318,693) 269% performers (GVL) provide cultural funds
15 1% producers of phonograms and social welfare
16% authors of literary works (VG WORT) schemes
Video: DM 64,900,000 Video
(USD 34,761 ,650) 21% authors/publishers of musical works (GEMA)
134% performers (GVL)
7.6% producers of phonograms (GVL)
Total: DM 93,500,000 8% authors of literary works (VG WORT)
(USD 50,080,343) 50% film/video authors and producers
Hungary Audio: FT 22,000,000 Audio
The share to performers
(USD 405,400) 20% record producers (Hungaraton) must be used for social
30% performers purposes and not for
50% authors individual distribution.
Video: N/A Video
70% authors and other copyright owners
30% performers
Iceland N/A (85% of total revenue is distributed)
Audio
15% Cultural Fund
23% producers of phonograms supervised by the Ministry
23% performers of education
46% authors (musical works)
8% authors (literary works)
Video
Not available
Spain Not yet implemented (80% of total revenue is distributed) 20% Cultural Fund
to right owners)
Audio
40% authors
30% producers of phonograms
30% performers
Video
40% authors
30% producers of videograms
30% performer
NOTE: Exchange Rates at 13 March 1989
SOURCE IFPI data provided by International Federation of Musicians, July 1989
Ch a p t er 6
Th e OTA Su r vey
CONTENTS
Page
WHY DO AN OTA SURVEY? q .*** ..* b**. *..9 ***0 ***0..0....*..*.**. 139
Recency of Sur veys ..** ... **** **** **** **** ****, **. ..*. a m....*.*. 139
Biases and Lack of Compar abilit y of Pr evious St udies . . . . . . . . . . . . . . . 141
Dat a Not Available for Examinat ion ... *.** *.. .*. ..*. m ****m***.**. 142
Nar r owness of Focus q**** **. .**. **** *.990 **** **.9 *.. * a *****..** 142
GOALS OF THE OTA SURVEY . * O*. s *e**. ***. *. *****. **, . **. *. ***. . 143
DESCRIPTION OF THE FINAL QUESTIONNAIRE . . . . . . . . . . . . . . . . . . . 144
St udy Populat ion, Design, and Sampling .*. . * 6 *, * . . . . . . . . . . . . . . . . . 144
The Field Per iod q**. .9m9*** .*** *0** **** ... ******089***********. 145
SUMMARY OF SURVEY FINDINGS q **** ..*9. ,**=*** .0 m**..**.**,*, 145
MUSIC LISTENING IN AMERICA . . . . . . . , . . . . . . . . . . . . . . , . . . . . . . . . b. 147
CONSUMER AUDIO TECHNOLOGY q **. .*. . e*********.*.**,,*,**** 147
THE MARKET FOR PRERECORDED MUSIC . . . . . . . . . . . . . . . . . . . . . . . . 148
MOST RECENT MUSIC PURCHASE EXPERIENCE . . . . . . . . . . . . . q . . . . 148
Pr oject ion of Music Pur chases b.. ..oo. ... ... ... ... ... ... ... ... .o. 148
MOST RECENT LISTENING EXPERIENCE . . . . . . . . . . . . . . . . . . . . . . . . . 149
Homemade Recor dings in t he Most Recent List ening . . . . . . . . . . . . . . . . 150
PREVALENCE OF HOME TAPING q * * . * . * * * . * * * . . . . . . . . . . * ..****.** 151
Home Taping Fr om Br oadcast For mat s q * * 0 * * * * * * . . . * * * * . *****...* 152
Home Taping Fr om Pr er ecor ded For mat s . . . . . . . . . . . . . . . . . . . . . . . . . 153
Tot al Taping Est imat e . . . * . . * * * . . * * * * * * * * * . . * . * . . * . * . * * *.*....*. 153
PROFILE OF THE HOME TAPER . . . * . * , * m * * * . * * * . . . . * . * . . . . . * * . * . . 154
Albu m v. Select i on Ta p i n g . **O *. ******. ***. . ***. **. . . . . . . . . ****, 155
Sou r ce of Cop y: Recor d i n g For ma t q *m *. *. *. 9*. ***. *. ***. 0. ***. *. , 156
Sou r ce of Or i gi n a l: Own v. Ot h er s q * . m , * . * * * . . . . . . * a * * * . . * a * * * . . * . 156
P er ma n en ce of Ta p e Li br a r i es q * . . 0 * . * * * . * * * * * . * . . * * * * * * . . * * * . * . . 156
Rea son s for Ta p i n g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
COP YI NG AND THE RECORDED MUSI C MARKET . . . . . . . . . . . . . . . . . . 167
Sa les Di sp la cemen t of Home Ta p i n g .. b, . . . . . . . . . . . . . . . . . . . . . . . . . . 157
St i mu la t i ve Effect s of Ta p i n g .. Oo. .0. o.o*. **** ***. **** . * *o***.... 159
Recor d i n g of Non cop yr i gh t ed Ma t er i a l b . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Ta p i n g Tech n ology a n d t h e Home-Ta p e I n ven t or y q .**. * * * o **..*..*. 160
HOME VI DEOTAP I NG q . * * * * . . * * * * . . . * * * * * * * * * * * * . . . . * . a m . . . * * , * * . 161
Vi d eot a p e Cop yi n g q 8*** **** **** **** **0* ***e *.*.99*****..*.*.*** 162
Comp a r i son of Vi d eo- a n d Au d i ot a p i n g Beh a vi or s . . . . . . . . . . . . . . . . . . . 162
P UBLI C ATTI TUDES .**. e .*. ... **** ..o. *,*o. o,, *o. .o. ,, o .***.,... 163
At t i t u d es Towa r d Ta p i n g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
F a i r n ess of Ta p i n g q . . . . * . . . * m * * * . . . . . * * * * * . . 0 * * * . * * * . . . * . . . . * * . 164
At t i t u d es Towa r d P oli cy Ch a n ges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
T a bl es
Table Page
6-1. Su r veys on Home Audiotaping q *b ****. . . **********. *. . *, . . ***. * 140
6-2. P r oject ed P u r ch a si n g/Ta p i n g Act i vi t y . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Ch a p t er 6
Th e OTA Su r vey
WHY DO AN OTA SURVEY?
Ver y ear ly in t he st udy it was clear t hat OTA
needed it s own sur vey of home t a ping a nd
copying behavior . A number of pr evious sur -
veys of t aping behavior had been per for med,
but t hey did not meet OTAs needs in develop-
ing a nd discussing policy opt ions for Con-
gr ess.
The aut hor s of a pr evious OTA st udy, I n t el -
l ect u a l Property Rights in an Age of Electron-
ics and Information, not ed t he need for a new
sur vey. In it s br ief r eview of sur veys of t aping
beh a vi or , t h e r epor t n ot ed t h a t [exi s t i n g
sur veys var y consider ably, and r apid changes
in t echnologies a nd use ma ke pr evious sur -
veys of har m incr easingly less r elevant . Con-
duct ed by par t ies involved in t he int ellect ual
pr oper t y debat e, most of t he sur veys t hat ar e
a va ila ble a r e, mor eover , subject t o bia s.
1
A
con gr es s i on a l r equ es t l et t er for t h e h ome
copying st udy
2
cit ed t he above passage t o sup-
por t t he need for a new sur vey.
A r eview of t he ear lier sur veys at t he begin-
ning of t his pr oject confir med t he view t hat
t hey wer e not a suit able basis for a congr es-
sional policy st udy. Br iefly, t her e wer e four
pr oblems.
Fir st , sever a l yea r s ha d pa ssed since t he
most r ecent sur veys of home-t aping behavior ,
and t he cur r ent r at e of t echnological change
may have r ender ed t heir r esult s less t han use-
ful.
Second, most pr evious sur veys wer e per -
for med by t he elect r onics indust r y and t he r e-
cor ding indust r y gr oups, or by ot her or ganiza-
t ions t ha t wer e pa r t ies t o t he home-copying
debat e. Alt hough many of t hese wer e pr ofes-
sionally pr epar ed sur veys, t hey never t heless
r eflect ed fundament al biases, as will be dis-
cussed lat er . Fur t her , t he sur veys wer e ver y
differ ent in met hodology so t hat t heir r esult s
could not be compar ed.
Thir d, in many cases, t he published r epor t s
on t hese sur veys wer e incomplet e. Oft en t he
pr ecise wor ding of quest ions, specific det ails
on t he sampling plan, or ot her dat a wer e not
available for examinat ion.
Finally, t he OTA assessment needed a
br oader empir ical focus t han pr evious st udies
offer ed. Ear lier st udies had focused only on
one medium, usually audiot aping. To pr ovide
a cont ext for policy opt ions, OTA needed some
compar able infor mat ion on differ ent t ypes of
copying and on possible similar it ies and dif-
fer ences in behavior . In addit ion, OTA needed
infor mat ion on public per cept ions of and
opinions on var ious policy alt er nat ives, pr ef-
er ably fr om t he same populat ion.
Recen cy of S u r veys
The a ge of t he sur veys wa s pr oba bly t he
least impor t ant of t he object ions, but it was
s t i l l a t r ou bl i n g on e. Tech n ol ogy h a s been
changing r apidly; new pr oduct s have been en-
t er ing t he mar ket place, and t heir availabilit y
has given consumer s new opt ions in t heir pur -
chasing and copying behavior .
A number of sur veys of home a udiot a ping
behavior wer e conduct ed in t he lat e 1970s and
ear ly 1980s. (See t able 6-1 for a summar y of
pr evious sur veys of home t aping r eviewed by
OTA. ) Th e mos t r ecen t ma jor s u r vey wa s
I U.S . Con m ess, Of f l ce of T~h n ~]o~ Assessm en t , I n t el l ect u a l Pr oper @ R i gh t s i n a n Age of El ect r on i cs a n d Zn f om a t i on , OTA-
CI T -302 (Melbour ne, FL: Kr eiger Publishing Co,, Apr il 1986), p. 201.
z~t t er fr om ~nat r )r ~nnis w Concin i, Chair man, Senat e Subcommit t ee on Pat ent s, Copyr ight s and Tr ademar ks, ~d ~pr esen-
t at ive Ft ober t W. Kast enmeier , Chair man, House Subcommit t ee on Cour t s, Civil Liber t ies and t he Administ r at ion of J ust ice t o Mr .
Fr eder ick Weingar t en, Oft lce of TechnoloW Assessment , May 8, 1987, p. 2.
139
Table &l. -Surveys on Home Audiotaping
Tie Sponsor Surveyor Year(s) Methodology
The Prerecorded Music
Market: An Industry Survey
A Study on Tape Recording
Practices among the
General Public
A Sur vey of Households
with Tape Playback
Equipment
Blank Tape Buyers: Thei r
Attitudes and Impact on
Prerecorded Music Sales
Home Taping: A Consumer
Survey
1981 Estimate of Loss Due
to Home Taping: Tapers
Reports of Replacement
Why Americans Tape: A
Survey of Home Audiotaping
in the U.S.
Home Taping in America:
1983 Extent and Impact
Warner Communications Inc.
Recording Industry Assn. of
America/National Music
Publishers Assn.
Copyright Royalty Tribunal
CBS Records
Warner Communications, Inc.
Warner Communications, Inc.
Audio Recording Rights
Coalition
Recording Industry Assn. of
America
National Analysts,
Div of Booz, Allen
Hamilton & Co.
The Roper
Organization
William R. Hamilton
& staff
CBS Records Market
Research
National Analysts,
Div. of Booz, Allen
Hamilton & Co.
WCI Consumer Research
Yankelovich, Skelly &
White, Inc.
Audits and Surveys
1978
1979
1979
1979-80
198(-82
1981-82
1982
1983
3,385 personal
interviews
2,004 adults plus
131 10 to 17 year
olds; telephone
interviews
1,539 telephone
interviews, aged 14
and over
7,500 telephone
interviews; 1,000
mail interviews;
1,000 in-store
interviews all
record & tape buyers
2,370 face-to-face
interviews
3,264 mail interviews
with diary, aged 10
and above
1,018 telephone
interviews with
persons aged 14 and
over who had taped
in past 2 years
1,354 mail interviews
and diaries; 589
personal interviews
and tape audits
SOURCE: Office of Technology Assessment, 1989
published in 1983 for t he Recor ding Indust r y consumer at t it udes t owar d copying behavior
Associat ion of Amer ica (RIAA).
3
Thus, most and possible policy alt er nat ives (e.g., t he ac-
st udies wer e complet ed befor e t he wide avail- cept abilit y of a t ape levy t o offset losses due t o
abilit y of por t able walkabout t ape player s and copying) was published in 1979 by t he Copy-
compact disc player s, t echnologies t hat ar e r ight Royalt y Tr ibunal.
4
It is likely t hat t her e
having a pr ofound effect on home ent er t ain- have been changes in at t it udes and opinions
ment . The most r ecent sur vey t hat included since t hat t ime,
aAUdit S ~d suneys, Home laping in Amer ica: 1983, Ext en t a n d I m pa ct , r epor t pr epar ed for ~, New yor h NY, lg~.
Copyr ight Royalt y Tr ibunal, A S u r vey of Hou seh ol d s wi t h Ta pe Pl a yba ck Equ i pm en t , Washingt on, DC, Sept ember 1979.
Chapter 6The OTA Sur vey . 1 4 1
Bi a ses a n d La ck of Com pa r a bi l i t y of
Pr evi ou s S t u d i es
Ta ble 6-1 shows t ha t most of t he inst it u-
t iona l sponsor s of pr evious sur veys of home
t aping wer e st akeholder s in t he home-copying
debat e. Such sponsor ship does not necessar ily
pr oduce a biased st udy. A st udy t hat was pr o-
duced for a dvoca cy pur poses is immedia t ely
suspect , however , and if complet e dat a ar e not
a va i l a bl e for exa mi n a t i on , s u ch s u s pi ci on s
cannot be put t o r est . While most of t he sur -
veys wer e per for med by exper ienced sur vey
r esea r ch fir ms t ha t used gener a lly a ccept ed
sur vey and st at ist ical t echniques, biases could
st ill ar ise in t he wor ding of quest ions, choices
of mea sur es, or select ion of quest ions t o be
a sked.
Pr evious sur veys have used var ious met h-
odologies a nd mea sur es of t a ping a ct ivit ies.
Sur vey met hodologies have r anged fr om face-
t o-face int er views t o audit s (act ually count ing
t apes and r ecor ds owned) t o mail sur veys t o
t elephone int er views, as shown in t able 6-1. To
measur e t aping act ivit ies, some sur veys have
u s ed t h e n u mber of t a pes pu r ch a s ed or
u s e d ,
6
ot her s t he inst a nces of t a ping,
7
a n d
st ill ot her s t he number of pieces of music
copi ed.
8
I n a ddi t i on , s ome qu es t i on n a i r es
asked about t aping act ivit ies in gener al, while
ot her s focused on one specific inst ance of t ap-
ing. The populat ions var ied as well, wit h some
sur veys int er viewing t he gener al public, some
i n t er vi ewi n g on l y peopl e wh o ma de h ome
t apes, and some focusing on people who fr e-
quent ed r ecor d st or es.
Wit h all t hese differ ences in select ion of
quest ion, populat ion, and unit of measur e, it
was ext r emely difficult t o r esolve differ ences
among sur vey r esult s. For example, Wh y
Americans Tape, commissioned by t he Audio
Recor ding Right s Coalit ion found t hat home
a udio r ecor ding st imula t ed sa les of pr e-
r ecor ded mat er ial. This was based on a lar ge
number of posit ive r esponses t o quest ions
such as, Have you ever discover ed t hat you
like per for mer s or composer s as t he r esult of
t aping one of his or her albums fr om a bor -
r owed r ecor ding? and Has t his ever led you
t o buy a r ecor d or pr er ecor ded t ape of t his
per for mer or composer ?
9
On t he ot her hand,
Home Taping in America, commissioned by
t he RIAA, found t hat t aping did not st imulat e
sales. In per sonal int er views, subject s wer e
asked, Thinking of t he (r ecor d/t ape) you
bought most r ecent ly, which of t he following
r easons on t his car d, if any, best descr ibe why
you bought it ? Of nine suggest ed r easons,
only a small number of r espondent s select ed
hear d ot her music by ar t ist /gr oup on a
home-r ecor ded t ape or hear d a home-r e-
cor ded t ape of it .
10
Thus, it was clear t hat
r aising t he quest ion in differ ent ways could
elicit ver y differ ent answer s. While it can
somet imes be ar gued t hat one for mulat ion of
a quest ion is bet t er t han anot her in an ob-
ject ive sense, t he choice of a bet t er for mula-
t ion is oft en a mat t er of opinion t hat will be
influenced by t he mot ivat ions of t he sur vey
sponsor s and t he expect ed uses of t he sur vey
r esult s.
For example, see CBS Recor ds Mar ket Resear ch, Bl a n k Ta pe Bu yer s: Th ei r At t i t u d es a n d I m pa ct on Pr er ecor d ed Mu si c S a l es, 1980.
Audit s and Sur veys, op. cit ., foot not e 3.
Copyr ight Royalt y Tr ibunal, op. cit ., foot not e 4.
8The ~Fr Or wizat ion, A St udy on T a pe R ecor d i n g pr a ct i ces of t h e Gen em t Pu bl i c, J une, 1979.
Wankelovich, Skelly, and Whit e, Inc., Why Am er i ca n s Ta pe: A S u r vey of Hom e Au d i ot a pz n g i n t h e Un i t ed S t a t es, r epor t pr epar ed for
t he Audio Recor ding Right s Coalit ion, Sept ember 1982.
1 ~Audlt s and Sur veys, op. cit ., fOOt nOt e ~.
Da t a Not Ava i l a bl e f or Exa m i n a t i on
Differ ent measur es and differ ent for ms of
quest ions made it difficult for OTA t o use pr e-
vi ou s st udies for pur poses of compar ison in
developing it s policy analysis.
Mor e pr oblema t ic, however , was t he fa ct
t hat many of t he pr evious sur veys dat a we r e
n ot available for det ailed analysis, or for inde-
pendent r eplicat ion. In some cases, it was not
possible t o det er mine t he exact wor di n g of
quest ions or inst r uct ions t o r espondent s. For
example, t he sur vey complet ed by Audit s and
Sur veys for t he RI AA
11
exa mined t he t a ping
behavior of sever a l hundr ed people who main-
t ained t aping diar ies dur ing a mont h of 1983.
The r epor t on t he sur vey did not , h owever ,
elabor at e on t he inst r uct ions given t o r espon-
dent s or t he cr it er ia t hey wer e t o use in classi-
fying t heir r epor t ed behavior s. In addit ion, a
1980 r epor t by CBS Recor ds Mar ket Resear ch
i n di ca t ed t h a t bl a n k t a pe pu r ch a s er s pr i -
mar ily t ape t o make cust om t apes and t o save
money, but did not indicat e t he pr ecise ques-
t ions u sed t o elicit t hese r esult s.
12
Simila r ly,
t he r epor t wa s based on t he r esult s of t hr ee
sepa r a t e sur veys, but did not i n di ca t e h ow
t hey wer e combined t o pr oduce a single r esult .
Repor t s on some ot her sur veys did pr ovide
exact wor ding for t he quest ions r epor t ed. It
was not always clear , however , t hat all ques-
t ions wer e r epor t ed, n or wa s i t p ossi ble t o ob-
t a i n r esp on ses t o t h e qu est i on s t h a t wer e n ot
r ep or t ed . Th u s, OTA cou ld n ot u se t h e r esu lt s
of t h e p r evi ou s su r veys, excep t t o n ot e gen er a l
t r en d s.
Th e OTA r epor t will occasionally r efer t o
pr evious sur veys and compar e t he r esult s of
t he 1988 OTA sur vey wit h s ome p r e vi ou s
st udy, but t his must be done wit h ca u t i on ,
si n ce t h e r esu lt s a r e comp a r a ble on ly i n t h e
most gen er a l sen se.
Na r r own ess of Focu s
Most pr evious wor k focused on one pa r t icu-
lar t ype of copying. The sur veys i n t a ble 6-1,
for exa mp le, d ea l on ly wi t h a u d i ot a p i n g be-
h a vi or . Some of t h ese st u d i es h a d been r e-
ma r k a bly d et a i led a s t h ey i n t en si vely ex-
p lor ed su ch t op i cs a s t h e a mou n t of t i me
sp en t ma k i n g a u d i ot a p es, t h e n u mber s of
t a p es u sed , t h e t yp es of mu si c cop i ed , t h e
n u mber s of p i eces of mu si c r ecor d ed p er t a p e,
et c. Th e su r vey sp on sor s oft en con si d er ed
su ch d et a i led d a t a n ecessa r y bot h t o u n d er -
st a n d t h ei r ma r k et s t h or ou gh ly a n d t o su p -
p or t p a r t i sa n p osi t i on s, su ch a s cla i ms of eco-
n omi c h a r m t o t h e r e cor d i n g i n d u s t r y.
However , t h i s wea lt h of d et a i l wou ld be of li t -
t le h elp t o Con gr ess i n u n d er st a n d i n g h ow
a u d i o t a p i n g fi t s i n t o t h e gen er a l p a t t er n of
h ome t a p i n g a n d cop yi n g.
A mor e gen er a l u n d er st a n d i n g of t h i s p a t -
t er n wou ld be ver y u sefu l i n d evelop i n g p oli cy
a lt er n a t i ves. I t wou ld be h elp fu l t o u n d er -
st a n d , for exa mp le, wh et h er p eop le wh o
a u d i ot a p e fr equ en t ly a lso vi d eot a p e fr e-
qu en t ly. I s t h er e some sp eci fi c gr ou p of p eop le
wh o con si st en t ly ma k e h ome cop i es of cop y-
r i gh t ed ma t er i a l of ever y t yp e? Or a r e t h e u s-
er s of a u d i ot a p es, vi d eot a p es, a n d comp u t er
cop i es d i ffer en t gr ou p s of p eop le wi t h d i ffer -
en t set s of mot i va t i on s a n d i n cen t i ves? P r evi -
ou s st u d i es wer e n ot h elp fu l i n a n swer i n g
t h ese qu est i on s.
Si mi la r ly, few of t h e p r evi ou s su r veys
closely cou p led a st u d y of t a p i n g or cop yi n g
beh a vi or wi t h a t t i t u d es a bou t i n t ellect u a l
p r op er t y. Th ey wou ld t h u s be of li t t le h elp i n
d et er mi n i n g wh i ch k i n d s of h ome cop yi n g a c-
t i vi t i es t en d ed t o vi ola t e con t emp or a r y Amer -
I IAuditS and Suweys, op. Cit ., foot not e 3.
12cF3s &COrdS Mar ket Resear ch, op. cit ., foot not e 5, P 11.
Chapter 6The OTA S urvey . 143
ican social nor ms and whet her t he at t it udes of
home copier s wer e fundament ally similar t o
t hose of people who did not make copies.
Given t he r apidit y of t echnological change
and t he blur r ing of boundar ies bet ween differ -
ent copying t echnologies, Congr ess may want
t he opt ion of dealing wit h home copying in a
gener al way, r at her t han on a piecemeal basis.
This necessit at es some gr asp of t he gener al
pat t er n of t aping and copying. Similar ly, Con-
gr ess may want t o under st and differ ences, if
any, bet ween copier s and t he r est of t he popu-
lat ion, befor e select ing a policy alt er nat ive.
GOALS OF THE OTA SURVEY
OTA had some specific goals in developing
t his sur vey. They met wit h var ying degr ees of
success.
The fir st goal was t o manage t he pr oblem of
bias. OTA r ecognized fr om t he out set t hat it
would be impossible t o eliminat e all bias fr om
it s own sur vey. The object ives her e wer e mor e
modest . The fir st was t o minimize bias t o t he
ext ent possible by avoiding some of t he pr ob-
lems obser ved in pr evious st udies. Second,
and mor e impor t ant , was t o use an open pr oc-
ess for developing t he sur vey appr oach and
t he sur vey inst r ument . In t his way, ar eas of
unavoidable bias, disagr eement , or uncer -
t aint y, could be clear ly ident ified and dis-
cussed. Ther efor e, out side sur vey exper t s,
st akeholder s, and member s of t he public wer e
involved in ever y st ep of t he sur vey develop-
ment pr ocess. The r eview pr ocess is discussed
in det ail in appendix A.
The next goal was t o develop a sur vey t hat
would be helpful in developing useful policy
opt ions in a n a ge of r a pid t echnologica l
change. Two major object ives suppor t ed t his
goal. Fir st , t he sur vey was t o include ques-
t ions on a r ange of home-copying act ivit ies,
not just audiot aping. It was hoped t hat t he
sur vey could ident ify similar it ies and differ -
ences in usage acr oss t echnologies t o help as-
sess whet her t he same policy lever s could af-
fect differ ent t ypes of copying behavior . Given
limit ed t ime and r esour ces, t his object ive was
only par t ially fulfilled. The final OTA ques-
t ionnair e included quest ions about audio and
video copying. The second object ive was t o
gat her infor mat ion on public awar eness of
and opinions on policy issues. Ther e had been
a few public opinion polls on some of t he spe-
cific r emedies. For example, t he Copy-r ight
Royalt y Tr ibunal conduct ed a poll t hat ex-
plor ed peoples at t it udes t owar d possible
r emedies such as a t ax on audio t ape.
13
OTA
planned t o examine at t it udes and opinions in
light of copying behavior t o det er mine t hose
t hat wer e widely held and t hose t hat wer e pe-
culiar t o people who copied.
Anot her goal of t he OTA sur vey was t o pr o-
vide infor mat ion in a for m t hat would be use-
ful in an independent assessment of t he eco-
nomic e f f e ct s of cop yi n g on t he
copyr ight -holding indust r ies. Result s of sev-
er al pr evious sur veys have been used t o est i-
mat e alleged economic har ms t o indust r y.
OTA int ended t o pur sue economic analyses
t hat would weigh impact s on t he gener al pub-
lic, as well as on t he indust r ies involved. The
sur vey r epr esent ed one phase of dat a collec-
t ion for t hese analyses, which ar e descr ibed in
chapt er 7.
The final goal of t he OTA st udy was t o pr o-
vide an open and available dat abase on home
copying t hat could be used or r eanalyzed by
ot her s. The OTA sur vey inst r ument and all
dat a collect ed ar e available t hr ough t he Na-
t ional Technical Infor mat ion Ser vice. It is
hoped t hat t his sur vey will be t he basis for fu-
t ur e st udies.
I S copyr i gh t ~ya ]t y Tr i bu n a l , op. Cit ., f~t n~t e 4.
DESCRI P TI ON OF THE F I NAL
QUESTI ONNAI RE
The final quest ionnair e was int r oduced t o
r espondent s as a nat ional sur vey on how t he
public uses audio and video t echnology. The
t opic of copying was not flagged as t he par -
t icular ar ea of int er est . Indeed, t o est ablish
t he pr oper cont ext for quest ions about t aping
and copying, it was necessar y t o ask many gen-
er al quest ions about peoples use of home
audio and video t echnology.
The final quest ionnair e was devot ed pr i-
mar ily t o t he use of home audio t echnology,
wit h a small sect ion on video t echnology. As
ment ioned ear lier , t he or iginal plan called for
quest ions on comput er s as well. One goal of
t he sur vey was t o compar e differ ent t ypes of
home copying and t o det er mine whet her t he
pat t er n of home audiot aping was similar t o
ot her t ypes of home copying. As t he sur vey in-
st r ument was developed, however , it became
clear t hat t her e was not enough t ime t o cover
all t hr ee subject ar eas adequat ely.
To r et ain some measur e of nonaudiot aping
act ivit ies, t he final sur vey included a shor t
sect ion on videot aping and copying. The vide-
ot aping sect ion, while consider ably shor t er
and less det ailed t han t he audio sect ion, was
designed t o par allel some of t he audiot aping
measur es. The sect ion included quest ions on
videocasset t e r ecor der owner ship and on r e-
cent VCR-r elat ed act ivit ies, including r ecor d-
ing off-t he-air , r ent ing or buying t apes, and
copying pr er ecor ded videot apes. People who
did not have access t o VCRs or who had not
made a t ape wit hin t he past year had t o an-
swer only a few quest ions in t his sect ion.
The audio sect ion was t he longest segment
of t he sur vey inst r ument . It included ques-
t ions on music list ening, owner ship of audio
r ecor ding and playback t echnology, pur chase
of pr er ecor ded audio pr oduct s, as well as
home t aping behavior and mot ivat ions. Peo-
ple who did not list en t o r ecor ded music wer e
r equir ed t o answer only a few br ief quest ions
in t his sect ion.
Music list ening for med t he cont ext for
quest ions in t he audio sect ion. The quest ion-
nair e at t empt ed t o develop measur es on t he
impor t ance or value of music list ening t o t he
r espondent . It t hen explor ed all t he differ ent
ways in which t he r espondent acquir ed t he r e-
cor ded music t hat he or she list ened t o most
r ecent ly, including pur chases, gift s, and t ap-
ing fr om var ious sour ces. The sur vey cont in-
ued wit h det ailed quest ions about t he most
r ecent exper iences of pur chasing and t aping
pr er ecor ded music, wher e appr opr iat e. The
sur vey also at t empt ed t o est ablish an inven-
t or y of t he number of r ecor dings and t he t ypes
of audio list ening and r ecor ding equipment
available t o t he r espondent .
A final sect ion of t he sur vey examined at t i-
t udes of t he public t aper s and nont aper s
about t he home t aping of music. In addit ion,
t his sect ion gauged public opinion t owar d a
r ange of pr oposed policy alt er nat ives t o ad-
dr ess t he issue of t he home t aping of music.
A copy of t he quest ionnair e is included in
appendix B of t his r epor t .
S t u d y Pop u l a t i on , Desi gn , a n d
S a m p l i n g
14
The t ar get populat ion of t his st udy con-
sist ed of t he noninst it ut ionalized populat ion
of t he Unit ed St at es, aged 10 and older . Since
t he issues t o be addr essed by t he sur vey wer e
br oader t han measur ing t he cur r ent quant it y
of home t aping, t he sur vey design did not
14This -ion is Men fr om ~hu]m~, R.onca and Bucuvalas, Inc., S u r vey of Hom e Ta pi n g a n d Copyi n g: Fi n a l Report. Voh m e 2:
Det a i l ed Fi n d i n gs on Hom e Au d i ot a pi n g, r epor t pr epar ed for OffIce of Technology Assessment by J ohn M. Boyle, Kennet h E. J ohn, and
J ane A. Weinzimmer (New Yor k, NY: Febr uar y 1989), pp. 8-20; and Appendix A (Spr ingt ie]d, VA: Nat ional Technical Infor mat ion
Ser vice, Oct ober 1989).
Chapter 6The OTA Sur vey q 145
adopt a sampling fr ame in whole or par t based
on home t aper s, as sever al st udies had done in
t he past . Rat her , t he populat ion of int er est
was t he pot ent ial mar ket for pr er ecor ded
audio pr oduct s and t hose pot ent ially affect ed
by gover nment al policy r elat ed t o audiot ap-
ing. Past r esear ch suggest ed t hat t he ent ir e
populat ion of t he Unit ed St at es, aged 10 and
over , was par t of t hat mar ket . Consequent ly,
t he st udy design called for a nat ional sample
of t he populat ion of t he Unit ed St at es, aged 10
and over .
Pr evious r esear ch had est ablished t he im-
por t ance of t he younger age cohor t s in bot h
t he mar ket for pr er ecor ded music and t he use
of home t aping. Since it was impor t ant t o r ep-
r esent younger per sons in t he sample ade-
quat ely, even t hough r esponse r at es among
younger populat ions ar e usually lower t han
aver age, a dispr opor t ionat e sampling st r at egy
was adopt ed t o ensur e adequat e r epr esent a-
t ion of t he populat ion under 35 year s old. The
sample was st r at ified by age cohor t and a
wit hin-household sampling t echnique was
used t o incr ease t he pr ior pr obabilit y of selec-
t ion for t he 15 t o 29-year -old age cohor t s. The
use of a pr obabilit y-based select ion, r at her
t han a quot a sampling appr oach, ensur ed t he
st at ist ical validit y of t he sample. The specific
det ails of t he sampling pr ocedur es ar e pr e-
sent ed in t he cont r act or s r epor t .
Th e Fi el d Per i od
Aft er final appr oval of t he quest ionnair e, in-
t er viewing began in lat e Sept ember 1988 and
cont inued unt il lat e Oct ober . A t ot al of 1,501
int er views, aver aging 25 minut es, wer e com-
plet ed in t his per iod. As in all populat ion sur -
veys, t he demogr aphic char act er ist ics of t he
achieved sample var ied fr om cur r ent popula-
t ion est imat es as a r esult of nont elephone
households, mult iple-t elephone households,
household size, and differ ent ial par t icipat ion
r at es. The sample for t he OTA sur vey was
weight ed t o cur r ent populat ion est imat es,
based on household size, age, sex, and r ace.
The sur vey findings fr om t his weight ed sam-
ple of t he populat ion of t he Unit ed St at es,
aged 10 and older , should have been pr ojec-
t able t o t he t ot al populat ion fr om which it
was dr awn, wit hin t he limit s of expect ed sam-
pling var iat ion. Fur t her det ails about t he
sample appear in t he cont r act or s r epor t .
15
In t he complet ed sample t her e wer e 563 in-
t er views wit h a nat ionally r epr esent at ive sam-
ple of per sons who had t aped music fr om r a-
dio, t elevision, r ecor ds, t apes, or CDs in t he
past year . The sur vey sample also included a
nat ionally r epr esent at ive sample of 897 per -
sons who ha d pur cha sed a r ecor d, pr e-
r ecor ded casset t e t ape, or CD in t he past year .
In addit ion, t her e wer e 471 complet ed int er -
views wit h a nat ionally r epr esent at ive sample
of people who had used an audiot ape r ecor der
in t he past year t o t ape t hings ot her t han mu-
sic. In addit ion, int er views wer e complet ed
wit h a nat ionally r epr esent at ive sampleof717
per sons who had acquir ed a videot aped pr o-
gr am by r ent al, pur chase, home r ecor ding, or
gift wit hin t he past year . Thus, t he sur vey gen-
er at ed samples of adequat e size t o affor d
some r easonably det ailed analyses of home
audio- and videot aping act ivit ies.
SUMMARY OF SURVEY
F I NDI NGS
The OTA sur vey found t hat 4 in 10 of a na-
t ionally r epr esent at ive sample of per sons
aged 10 and over had t aped r ecor ded music
(eit her fr om a br oadcast or fr om a r ecor d,
pr er ecor ded casset t e t ape, or compact disc) in
1 S&hu]mn, ~]nca, and Bucuvalas, Inc., op. cit ., fOOt nOt e 14.
t he past year . Thus, home t aping was much
mor e pr evalent in 1988 t han it had been in
1978-79, when sur veys found t hat 21 t o 22
per cent of t he populat ion wer e past -year t a-
per s. The 1988 finding was r oughly similar t o
t he t aping pr evalence found in a 1982 sur vey.
Music t aper s, in gener al, had a gr eat er int er -
est in music, list ened t o mor e music, and pur -
chased mor e pr er ecor ded music pr oduct s
t han did nont aper s. Conver sely, t he major it y
of nont aper s list ened t o lit t le r ecor ded music.
Audiocasset t e was t he most fr equent ly pur -
chased for mat of pr er ecor ded music. The sur -
vey found, however , t hat t aper s mor e fr e-
quent ly copied fr om r ecor ds t han t hey did
fr om t a pes . P eopl e wh o pu r ch a s ed a
pr er ecor ded it em wit h t he int ent ion of t aping
fr om it (as did about one-sevent h of t he sam-
ple) wer e far mor e likely t o pur chase a r ecor d
or CD t han a pr er ecor ded audiocasset t e.
Many people seemed t o copy for t he pur pose
of place-shift ing, t hat is, copying music
fr om r ecor ds and CDs t o t he mor e por t able
casset t e for mat .
The sur vey found t hat a lar ge major it y of
people who copied fr om a pr er ecor ded for mat
in t heir last t aping session wer e copying t heir
own r ecor d, t ape, or CD for t heir own use.
They usually copied wit h t he int ent ion of
keeping t he t ape per manent ly. About one-
fift h t aped a copy for a fr iend or copied a bor -
r owed it em. Few copies wer e made fr om
homemade t apes.
People who t aped fr om r adio br oadcast s
wer e less likely t o copy full albums t han t hose
who copied r ecor ds, casset t es, or CDs. About
half of t he last home t aping of pr er ecor ded
for mat s involved t aping of whole albums.
While home t a ping cer t a inly displa ced
some sales of pr er ecor ded pr oduct s, sur vey
dat a also point ed t o some st imulat ive effect s.
Home t apes had value in pr omot ing songs and
per for mer s. In addit ion, a significant number
of pur chaser s bought pr er ecor ded pr oduct s
wit h t he int ent ion of copying t hem.
The t aping of noncopyr ight ed mat er ial oc-
cur s mor e fr equent ly t ha n t he t a ping of
pr er ecor ded music. Per haps t hr ee-four t hs of
t aping occasions involved t aping somet hing
ot her t han music. Tapes of noncopyr ight ed
mat er ial var ied widely in t ype, lengt h, and
last ing value, wit h some, like answer ing ma-
chine messages, being r er ecor ded oft en. This
sur vey did not at t empt t o det er mine how
much space in home libr ar ies was occupied by
pr er ecor ded music a s oppos ed t o n on -
copyr ight ed mat er ial.
The sur vey found t hat people discr iminat ed
lit t le wit h r espect t o t he gr ade of blank t ape
t hey used for r ecor ding voice as opposed t o
music. Indeed, a lar ge major it y of r espon-
dent s had no idea of t he gr ade of t ape t hey
used in t heir last t aping session.
The sur vey found t hat t he availabilit y of
dual-casset t e and high-speed-dubbing t ech-
nology had lit t le r elat ionship t o t he number of
homemade t apes. People wit h many home-
made t apes, or wit h few, or even none, seemed
t o own equipment wit h t hese capabilit ies in
r oughly similar pr opor t ions. Thus, t echnol-
ogy did not seem t o dr ive copying behavior .
Dist r ibut ion of t hese feat ur es may have r e-
flect ed t he number of player s in t he home, or
t heir r ecency of pur chase, r at her t han t aping
act ivit y.
Most videocasset t e r ecor dings, unlike t heir
audio count er par t s, wer e made for t empor ar y
use. Most videot aping fit t he definit ion of
i t ime- shift ing out lined in t he S ony decision.
A few specific pr ogr am t ypes including con-
cer t s and educat ional shows wer e copied
wit h t he int ent ion of keeping.
The sur vey found t hat , while t elevision t ap-
ing was common among VCR owner s, copying
t apes was not . Of t he t apes t hat wer e copied,
only a minor it y wer e made fr om an or iginal
t hat belonged t o t he copier . Some or iginals
wer e r ent ed fr om video st or es, but t he bulk
wer e obt ained fr om fr iends. Thus, t her e ap-
pear ed t o be a modest level of exchange of
Chapter 6The OTA S u r vey . 147
videot apes among fr iends for t he pur pose of
copying.
While t he sur vey found a somewhat higher
incidence of video copying among music t a-
per s t han among nont aper s, t her e was no
st r ong conver gence bet ween video- a nd
audiot aping behavior . The sur vey found t hat
much home-video and home-audio copying
was done by differ ent people, for differ ent r ea-
sons.
Alt hough t he gener al public was unfamiliar
wit h copyr ight law as it r elat ed t o home t ap-
ing, people did have opinions on t he nor ms
gover ning accept able behavior in t he ar ea of
home t aping. In gener al, bot h t aper s and non-
t aper s believed t hat it was accept able t o copy
a pr er ecor ded it em for ones own use or t o give
t o a fr iend. The only copying behavior t hat
was univer sally condemned by t aper s and
nont aper s was copying a t ape t o sell.
Alt hough most r espondent s had lit t le idea
whet her t he exist ing sit uat ion in home copy-
ing was fair t o t he r ecor ding indust r y, t o per -
for mer s, or t o t he consumer , t hey did st r ongly
oppose all t he t est ed suggest ions for changes
t o t he st at us quo t hat would impose user fees
or limit t aping by t echnological means.
MUSI C LI STENI NG I N
AMERI CA
The sur vey document ed an act ive int er est
in music list ening among t he Amer ican pub-
lic, wit h fr equent list ening t o music on r adio,
t elevision, r ecor ds, t apes, and compact discs.
A major it y (56 per cent ) of t his nat ionally r ep-
r esent at ive sample of per sons aged 10 and
older consider ed list ening t o music as ex-
t r emely or quit e impor t ant t o t hem (see
t able C2-1).
16
Only 7 per cent r epor t ed t hat
t hey had spent no t ime in t he last 7 days lis-
t ening t o music on t he r adio and t elevision. By
cont r ast , a major it y of t he sample (51 per cent )
r epor t ed 7 or mor e hour s of list ening t o
br oadcast music.
Gener ally speaking, t he sur vey found t hat
people list ened t o br oadcast music mor e fr e-
quent ly t han t o music on r ecor ds, t apes, and
CDs. Indeed, 43 per cent of t he sur vey r espon-
dent s r epor t ed t hat t hey spent no t ime list en-
ing t o music on pr er ecor ded for mat s in t he
past week. Nonet heless, a major it y of sur vey
r espondent s (56 per cent ) r epor t ed list ening t o
r ecor ded music in t he past 7 days (see t able
C2-4).
CONSUMER AUDI O
TECHNOLOGY
Given t he widespr ead int er est in music lis-
t ening, it is not sur pr ising t hat t he sur vey
found t hat vir t ually ever yone had one or mor e
t ypes of audio playback equipment . The pr o-
por t ion of sur vey r espondent s wit h r ecor d
player s in 1988 was 81 per cent , effect ively un-
changed fr om sur vey est imat es of 78 per cent
in 1978.17 But t he por t ion of t he populat ion
wit h casset t e player s had mor e t han doubled
in t he past decade, fr om 38 per cent in 1978 t o
94 per cent in t his sur vey (see t able C2-7).
Most r espondent s had a number of differ -
ent t ypes of casset t e player /r ecor der s. Only 16
per cent had only one of t he four t ypes of t ape
decks examined in t he sur vey. Near ly a quar -
t er had t wo of t he four t ypes; 27 per cent had
16Not e: M] sumey t ab]es me ]Wat ~ in appendi
x
C of t his r epor t , and t he number ing is ident ical t o t hat in t he SRBI report (OP. cit .,
foot not e 14). Sampling pr ecision, st at ist ical significance, and confidence levels ar e discussed in t he SR.BI r epor t , pp. 14-20.
War ner Communicat ions Inc., The PF-w-wordd Music Market: An Inventory S urvey, Mar ch 1978.
t hr ee of t he four t ypes; and anot her 27 per cent
had all four kinds of audio casset t e equipment
(see t able C2-6). This act ually under st and t he
number of casset t e decks owned or used by r e-
spondent s because t he sur vey did not inquir e
int o t he number of player /r ecor der s t hat t he
r espondent had wit hin each class.
This sur vey did not examine whet her t he
t ape player s had r ecor ding capabilit ies. Most
t ape player s cur r ent ly on t he mar ket (except
for aut omobile st er eos and some walkman-
t ype player s) can bot h play and r ecor d. Hence,
most t ape player s ar e assumed t o be r ecor der s
as well. The sur vey findings suggest ed t hat
vir t ually ever yone aged 10 and older had im-
mediat e access t o t he t echnology t o copy mu-
sic r ecor dings.
THE MARKET F OR
P RERECORDED MUSI C
Given t he widespr ead owner ship of casset t e
player s, it is not sur pr ising t hat t he audiocas-
set t e was t he r ecor ded music for mat most fr e-
quent ly owned by t he sample populat ion.
Near ly six out of seven r espondent s (84 per -
cent ) r epor t ed owning one or mor e audiocas-
set t e t apes. Indeed, near ly half (49 per cent ) of
r espondent s r epor t ed t hat t hey owned 11 t o
50 audiot apes. It should be not ed t hat while
audiot apes had achieved t he gr eat est penet r a-
t ion r at e, t he LP r ecor d r emained t he most
numer ous for mat for pr er ecor ded music in
home invent or ies. The compact disc had t he
smallest penet r at ion r at e: 18 per cent of t he
sample r epor t ed owning any compact discs.
Among t his sample, 83 per cent r epor t ed hav-
ing pur chased a r ecor d, pr er ecor ded casset t e
t ape, or CD in t he past . Over half (58 per cent )
had pur chased r ecor ded music in t he past
year . The pr imar y mar ket for pr er ecor ded
music was among t he young. The incidence of
past -year pur chase of r ecor ds, casset t es, and
CDs was 89 per cent among t he 15 t o 19-year -
olds, 78 per cent among 20 t o 24-year -olds, and
71 per cent for t he 25 t o 29-year -olds, and 64
per cent among 30 t o 34-year -olds.
MOST RECENT MUSI C
P URCHASE EXP ERI ENCE
The r ecor ded music for ma t most fr e-
quent ly pur chased in t he past year was t he
pr er ecor ded casset t e. Seven out of t en past -
year buyer s of pr er ecor ded music (70 per cent )
r epor t ed pur chasing a pr er ecor ded casset t e
on t heir most r ecent pur chase occasion, com-
par ed wit h 18 per cent buying LP r ecor ds, 12
per cent buying compact discs, and 3 per cent
buying 45-r pm r ecor ds. When t he pur chase
per iod was r est r ict ed t o t he past mont hs pur -
chases and all pur chases wer e count ed by
t ype, however , t he sur vey findings suggest ed
t hat in t he last quar t er of 1988, pr er ecor ded
casset t es r epr esent ed 51 per cent of t he music
r ecor dings sold t o sample r espondent s; long-
play r ecor ds account ed for 22 per cent of unit s
sold; compact discs account ed for 21 per cent ;
and 45 r pm r ecor ds account ed for 7 per cent of
t he unit s sold.
Pr oj ect i on of Mu si c Pu r ch a ses
Schulman, Ronca and Bucuvalas used
past -mont h pur cha ses t o est ima t e t he
number of unit s (r ecor ds, pr er ecor ded cas-
set t es, and CDs) pur chased in t he Unit ed
St at es each year .
18
SRBI ar r ived at a cor -
r ect ed est imat e of appr oximat ely 750 mil-
lion unit s per year .
18The s~I ~ep~ inc]ude~ ~ ~~t imat e of aver age ~nu~ purchases based on ~dysis of most r ecent pur chases (,See SRBI Rewr t ,
op. cit ., foot not e 14, p. 54). In compar ing t heir pr oject ion wit h act ual 19SS sales, as r epor t ed by RM, however , SRBI finds t heir
pr oject ion of 1,500 million pur chases per year is t oo lar ge by about a fact or of 2. SRBI at t r ibut es t his pr oblem t o r ecall er r or and
applies a 100 per cent cor r ect ion fact or t o develop what t hey consider a mor e a r easonable est imat e: 750 million pur chases per year .
Chapter 6The OTA S urvey q 149
OTA made an alt er nat ive est imat e of t he t o-
t al mar ket for pr er ecor ded music by using r e-
spondent s most r ecent pur chases dur ing t he
past year . One mot ivat ion for t his was t hat
t he number of r espondent s was lar ger for
past - year event s. Also, using mor e aggr e-
gat ed dat a for t he r ecency of t he event and
number of it ems per event could help r educe
t he effect of r ecall er r or s. OTA used t he dat a
pr esent ed in t ables C4-2 and C4-5 on t he most
r ecent pur chase t o appr oximat e a weight ed
aver age of t he fr equency of pur chases in a
year lg and an aver age number of it ems pur -
chased per event (based on past -year pur chas-
er s). Assuming a U.S. populat ion of 204 mil-
lion per sons age 10 and over , OTAs met hod
yielded an est imat e of 885 million annual pur -
chases of pr er ecor ded music it ems.
Thus, t he sur vey dat a yielded a fair ly br oad
r ange of values for est imat ed year ly pur -
chases, depending on t he specific dat a it ems
and met hods used (see t able 6-2). But t he
r ange was not ver y far fr om RIAAs r epor t
t hat a r ecor d 762 million unit s wer e shipped
in 1988.
20
MOST RECENT LI STENI NG
EXP ERI ENCE
To under st and r espondent s pr efer ences
and behavior in mor e det ail, t he sur vey exam-
ined t he most r ecent exper ience of music lis-
t ening. It is r easonable t o expect t hat t he r e-
spondent s r ecall of t he nat ur e and sour ce of
t he r ecor ding hear d on t his occasion t o be
Table 6-2.-Projected Purchasing/Taping Activity
SRBl
a
OTA
b
Est imat ed number of
yearly purchases
(records, prerecorded
tapes, and CDs) 750 million 885 million
Est imat ed year ly
tapings
c
from
prerecorded sources 600 million 578 million
Estimated yearly
tapings
c
from
broadcast sources 700 million 439 million
a Estimates in first column are from the final report by the survey contractor, Schul-
man, Ronca, and Bucuvalas, Inc (SRBI) They are calculated from past-month
-
activity, adjusted by SRBIs 100 percent correction factor Based on past-month
tapers (N = 150 for prerecorded taping; N = 165 for broadcast taping)
b Figures in second column are OTA staff estimates, calculated from estimated
yearly frequencies (See tables C5-12, C15-13, C5-6, and C5-7 ) Based on past
year t aper s (N = 406 for prerecorded sources, N = 336 for broadcast sources)
c "Tapings refers to instances of r ecor ding Number of "taplngs is not equivalent
to number of filled blank cassettes or album equivalents.
SOURCE: OTA Survey (September-October 1966)
most accur at e. Respondent s wer e asked t o r e-
por t t he last t ime t hey had list ened t o r e-
cor ded music on audiot apes, r ecor ds, or CDs,
not including music on r adio or t elevision or
backgr ound music in public places. In t he ma-
jor it y (59 per cent ) of cases, sur vey r espon-
dent s r epor t ed t hat t heir most r ecent list en-
ing occasion had been wit hin t he past week;
for about 18 per cent of r espondent s t he last
list ening exper ience was wit hin t he past
mont h (see t able C3-1). In all, 88 per cent had
list ened t o music wit hin t he past year . These
r espondent s wer e quest ioned about t heir lis-
t ening exper ience in mor e det ail.
19For ~xamp]e, ifa ~rson rew~~ that the ]ast time he bought a r ecor ding was 1 mont h ago, t hen an est imat e of his Ye~lY purchase
fr equency was 6 event s per year , because (on aver age) t he quest ion would be asked midway bet ween pur chases.
OTA made some appr oximat ions in calculat ing t he aver age fr equency of pur chases: last week was assumed t o be a week ago, last
mont h a mont h ago, last year a year ago, year or mor e as t wo year s, not sur e as never . This t ended t o under est imat e t he t r ue
fr equency.
z3R~ M~ket Resear ch Commit t ee, 1989. (See t able 4-1 in t his r epor t . )
Most r espondent s (63 per cent ) r epor t ed lis-
t ening t o music at home on t heir most r ecent
list ening occasion; 23 per cent r epor t ed list en-
ing in a car . Most of t he r est wer e at t he home
of a fr iend or at wor k.
About t wo-t hir ds (64 per cent ) of t hose lis-
t ening t o r ecor ded music wit hin t he past year
r epor t ed t h a t t h ey wer e l i s t en i n g t o
audiot apes on t heir most r ecent list ening oc-
casion. Recor ds wer e a dist ant second, r e-
por t ed in only 21 per cent of list ening occa-
sions. Compact discs wer e list ened t o in
anot her 10 per cent of cases. In 3 per cent of
cases, r espondent s r epor t ed t hat t heir most
r ecent exper ience included a mixt ur e of r e-
cor ded for mat s most oft en r ecor ds and
t apes (see t able C3-7). In t hr ee-quar t er s of t he
cases (74 per cent ), t he sur vey r espondent s
wer e list ening t o t heir own r ecor ds, t apes, or
CDs, r at her t han someone elses. Those who
wer e list ening t o t heir own r ecor ding wer e
asked how t hey obt ained t he r ecor ding. In 74
per cent of t he cases, t he list ener had pur -
chased t he r ecor ding for himself. In anot her
12 per cent of cases, t he r espondent r epor t ed
t hat t he r ecor ding was r eceived as a gift (see
t able C3-13).
Hom em a d e R ecor d i n gs i n t h e Most
R ecen t Li st en i n g
As ment ioned ear lier , about t hr ee-four t hs
of r espondent s r epor t ed list ening t o t heir own
r ecor ding on t he last list ening occasion. Of
t hese, 10 per cent r epor t ed t hat t hey had made
t he r ecor ding at home. The pr opor t ion of
homemade t apes was almost t wice as high
among Blacks (20 per cent ) and 10 t o 14-year -
olds (18 per cent ). Per haps sur pr isingly, t he
pr opor t ion of homemade t apes among r e-
cor dings last list ened t o was found t o be low
among 15 t o 19-year -olds (5 per cent ) (see t a-
ble C3-13).
The sur vey findings t hus document ed t hat
ar ound 7.4 per cent (0.10 x 0.74) of t he list en-
er s hear d homemade t apes on t heir last list en-
Photo m Office of Technology Assessment
Music tapers also buy recordings.
ing exper ience. Indeed, if it is r easonable t o as-
sume t ha t t he 24 per cent of r ecor dings
belonging t o someone ot her t han t he r espon-
dent mir r or ed t he same pat t er n, t hen ar ound
10 per cent of t he music most r ecent ly played
was a pr oduct of home copying. Mor eover , t he
sur vey also found t hat 31 per cent of t he
audiot apes t hat wer e bor r owed or given t o
sur vey r espondent s wer e t apes t hat someone
had made. Combining t hese sour ces pr oduced
an est imat e t hat ar ound 12 per cent of t he r e-
cor dings most r ecent ly played by per sons
aged 10 and older wer e t he pr oduct of home
t a ping.
The most common sour ces of music for
t hese homemade t apes wer e t he r ecor ds, cas-
set t es, and CDs alr eady owned by t he r espon-
dent . Over one-t hir d (37 per cent ) of t hese
t apes wer e made fr om t he r espondent s own
or iginal r ecor dings. Radio br oadcast music
was t he sour ce mat er ial for anot her 29 per -
cent . Recor ds, pr er ecor ded casset t es, and CDs
belonging t o ot her s wer e t he sour ce of music
for most of t he r emaining t apes (22 per cent ).
Fewer of t he homemade t apes wer e copied
Chapter 6The OTA S urvey q 151
fr om ot her homemade t apes made by t he lis-
t ener (4 per cent ) or someone else (3 per cent )
(see t able C3-13).
The sample size of r espondent s who had
most r ecent ly list ened t o a homemade t ape
was small, so analysis of t his gr oup could only
be suggest ive. The dat a did suggest , however ,
t hat t he youngest home-t ape list ener s wer e
most likely t o obt ain mat er ial fr om r adio. The
dat a also suggest ed t hat about half (51 per -
cent ) of t he t apes included one or mor e ent ir e
albums, while a lit t le under half (46 per cent )
wer e made up of select ions fr om a number of
differ ent albums. About 23 per cent of t he
homemade t apes wer e exclusively complet e
albums, wit h no mixt ur e of select ions in-
cluded (see t able C3-15). To t he ext ent t hat
t hese dat a could be r elied on, t hey suggest ed
t hat about 3 per cent (23 per cent of 12 per cent )
of t he r ecor dings most r ecent ly played by t he
sample populat ion wer e copies of albums in a
for m t hat should have been commer cially
available.
P REVALENCE OF HOME
TAP I NG
One of t he pr incipal object ives of t his st udy
was t o pr ovide cur r ent est imat es of t he pr eva-
lence of home t aping in t he populat ion. Home
t aping means t he use of a t ape r ecor der at
homet o t ape any sound, voice, or music,
fr om any medium. A major concer n in t his
st udy, however , was t he copying of copy-
r ight ed music fr om r ecor dings or fr om t elevi-
sion and r adio br oadcast s.
This sect ion descr ibes t he act ivit ies of per -
sons who had used an audiot ape r ecor der at
home, wit hin t he past year , t o t ape music
fr om r adio, t elevision, r ecor ds, t apes, or CDs.
Four out oft en r espondent s (41 per cent ) wer e
past -year music t aper s accor ding t o t his
definit ion. Men (44 per cent ) wer e somewhat
mor e likely t han women (38 per cent ) t o be
past -year t aper s. Blacks (48 per cent ) wer e
somewhat mor e likely t han whit es (40 per -
cent ) t o have t aped in t he past year . These t a-
per s include major it ies of t hose aged 10 t o 14
(80 per cent ), 15 t o 19 (77 per cent ), and 20 t o 24
(59 percent) year s old (see t able C5-1).
The finding t hat 41 per cent of t his nat ion-
ally r epr esent at ive sample wer e past -year t a-
per s suggest s t hat home t aping was near ly
t wice as pr evalent in 1988 as was found by sur -
veys in 1978 (21 per cent )
21
and in 1979 (22 per -
cent )
22
t hat used t he same populat ion and
similar quest ions.
It is possible t hat much of t he r apid expan-
sion in home t aping occur r ed bet ween 1978
and 1982. The Yankelovich sur vey in 1982
found t hat t he pr evalence of t aping in t he pr e-
vious 3 months was 29 per cent among t he
populat ion aged 14 and older .
23
Using t he
same per iod of oppor t unit y and r est r ict ing
t he sample t o t hose 14 and older , t he OTA sur -
vey found a vir t ually ident ical r at e of 28 per -
cent in 1988 (see t able C5-3).
The changes in t he r at es of home t aping
among t he t eenage populat ion since 1978-79
was par t icular ly not able. The 1979 sur vey
cit ed pr eviously found t he pr evalence of home
t aping highest among 14 t o 15-year -olds (39
per cent ). The r at e of t aping was subst ant ially
lower among t he 10 t o 13-year -olds (27 per -
cent ), while among older t eens (32 per cent )
and t he 18 t o 29 age gr oup (32 per cent ) t he
r at e was t he same. It t hen gr adually declined
wit h age (see t able C5-2).
Zlwmner Communicat ions Inc., op. cit ., foot not e 17.
2HIhe Roper Or ganizat ion, op. cit ., foot not e 8.
Xymkolot ich, Ske]]y, & Whit e, Inc., op. Cit., rmtnote 9.
152 . Copyright and Home Copying: Technology Challenges the Law
The OTA sur vey found for t hr ee cohor t s is
essent ially t he same: 81 per cent of 10 t o
13-year -olds, 78 per cent for 14 t o 15-year -olds,
and 82 per cent for 16 t o 17-year -olds. The
pr evalence of home t aping had incr eased by
mor e t han t wofold in each of t hese gr oups
since 1979 (t able C5-2).
The incr ease in t aping among older per sons
since 1979 was not so dr amat ic it was on t he
or der of a 50-per cent incr ease. One except ion
was t he gr oup aged 60 and over . Alt hough t ap-
ing was fair ly r ar e (11 per cent ), it had mor e
t han doubled compar ed wit h t he pr opor t ion
(4 per cent ) found a decade ago (t able C5-2).
It is not able t hat t he pr evalence of home
t aping had always been higher among cur r ent
buyer s of r ecor ded music. The 1978 War ner
sur vey found t hat t he r at e of past -year t aping
was 32 per cent among per sons who had pur -
chased r ecor ded music in t he past year com-
par ed wit h 21 per cent among all per sons aged
10 and over . A decade lat er OTA found t hat
t he r at e of past -year t aping was 53 per cent
among past -year pur chaser s of r ecor ded mu-
sic, compar ed wit h 41 per cent of all per sons
aged 10 and over . In bot h cases t his meant
t hat about t hr ee-quar t er s of past -year t aper s
wer e also past -year music buyer s. But t he pr o-
por t ion of t aper s who wer e not buyer s in-
cr eased fr om appr oximat ely 20 t o 25 per -
cent over t he past decade (see t able C5-4).
A per s on ma y ma ke a h ome t a pe of
pr er ecor ded music eit her by r ecor ding music
played on TV or r adio or by dir ect ly copying a
pr er ecor ded for ma t (r ecor d, t a pe., or CD).
This r epor t r efer s t o t he for mer as br oadcast
t aping (alt hough some t aping may occur fr om
cable t r ansmission), and t o t he lat t er as t ap-
ing fr om a pr er ecor ded for mat .
Hom e Ta pi n g Fr om Br oa d ca st
For m a t s
Near ly half (45 per cent ) of t he nat ionally
r epr esent at ive sample of per sons aged 10 and
older r epor t ed t ha t t hey ha d ma de a n
audiot ape of music fr om r adio or t elevision at
some t ime in t he past (see t able C5-5).
Of t he t ot al sample, 27 per cent t aped music
fr om r adio and t elevision in t he past year .
These past -year br oadcast t aper s included a
major it y of per sons aged 10 t o 14 (64 per cent )
and 15 t o 19 (67 per cent ). By cont r ast , t he r at e
of past -year br oadcast t aping was 41 per cent
for t hose aged 20 t o 24, 27 per cent for t hose
aged 25 t o 29, and 20 per cent for t hose aged 30
t o 34. The sur vey dat a st r ongly suggest ed t hat
br oadcast t aping, while not limit ed t o t he
t een-age year s, was far mor e char act er ist ic of
t eens t han of older per sons (see t able C5-6).
Those whose most r ecent br oadcast t aping
occur r ed wit hin t he past mont h wer e asked on
how many occasions, in all, t hey had made
audiot apes of music in t he past mont h. These
occasions of t aping wer e t hen summed acr oss
t he sample. Ther e wer e a t ot al of 713 occa-
sions in t he pr evious mont h of t aping fr om r a-
dio or t elevision. This analysis put t he r ole of
t eenager s in br oadcast t aping in st ar k r elief.
Per sons aged 10 t o 14 account ed for 33 per -
cent of br oadcast -t aping occasions, while per -
sons aged 15 t o 19 account ed for anot her 31
per cent (see t able C5-9).
An est imat ed t ot al of 850 t apes wer e made
in t he 713 t a ping occa sions in t he pa st
mont h.
24
The sur vey quest ions did not assess
how much t ape was act ually filled on t hese oc-
casions. Thus, it was safer t o descr ibe t hese as
24~~Pndent ~ who wer e not sur e ho
w
mwy t imes t he
y
had @@or how m~y t apes t hey had used wer e given a conser vat ive scor e
of 1 for t he missing values.
Chapter 6The OTA S urvey .153
850 t apings (i.e., t apes used t o r ecor d one or
mor e musical select ions) fr om r adio and t ele-
vision. They wer e not equivalent t o t he num-
ber of blank t apes used or number of albums
copied. A lat er sect ion will consider t he pr o-
por t ion of full albums t o individual select ions
r ecor ded in t hese t apings.
As would have been expect ed fr om t he ear l-
ier sur vey findings on t aping occasions, t he
bulk of br oadcast t apings wer e made by
t eenager s. The 10 t o 14-year -olds account ed
for 37 per cent and t he 15 t o 19-year -olds ac-
count ed for anot her 27 per cent of br oadcast
t apings in t he past mont h (see t able C5-1O).
Hom e Ta pi n g Fr om Pr er ecor d ed
For m a t s
Half (50 per cent ) of t his nat ionally r epr e-
sent at ive sample of per sons aged 10 and over
r epor t ed t hat t hey had t aped music fr om a r e-
cor d, pr er ecor ded casset t e, or CD at some
t ime in t he past . The lifet ime pr evalence of
home t aping fr om pr er ecor ded for mat s was
t hus slight ly higher t han t he lifet ime pr eva-
lence of br oadcast t aping (45 per cent ) dis-
cussed in t he pr evious sect ion. It should be
not ed t hat t his est imat e of home t aping fr om
pr er ecor ded sour ces did not include t he copy-
ing of homemade t apes.
Of t he t ot al sample of per sons aged 10 and
older , 28 per cent had t aped music fr om r e-
cor ds, pr er ecor ded casset t es, or CDs wit hin
t he past year . A major it y of per sons aged 15 t o
19 (65 per cent ) and subst ant ial minor it ies of
t hose aged 10 t o 14 (42 per cent ) and 20 t o 24
(45 per cent ) copied pr er ecor ded music wit hin
t he past year . Similar r at es of t aping wer e
found among 25 t o 29-year -olds (31 per cent )
and 30 t o 34-year -olds (35 per cent ). The r at e
declined fur t her t o only 20 per cent among t he
35 t o 64-year -olds, while t he r at e of past -year
t aping among t he over -65 age gr oup was
near ly nonexist ent (4 per cent ) (see t able
C5-12).
Those who had t aped fr om a pr er ecor ded
for mat wit hin t he past mont h wer e asked on
how many occasions t hey had t aped music
fr om r ecor ds, t apes, or CDs in t he past mont h.
These occasions of past -mont h t aping wer e
t hen summed acr oss t he sample. Respondent s
r epor t ed a t ot al of 301 occasions of t aping in
t he past mont h. The sur vey findings cont in-
ued t o confir m t he major r ole of t eenager s in
music copying. Per sons aged 10 t o 14 (24 per -
cent ) and 15 t o 19 (21 per cent ) wer e r esponsi-
ble for near ly half of t he occasions of t aping
fr om pr er ecor ded for mat s in t he past mont h
(45 percent). Note that thk was a subst an-is
t ially smaller shar e of pr er ecor ded music
copying t han t he 63 per cent of past -mont h
br oadcast copying t hat t hey account ed for
(see pr evious sect ion). An est imat ed t ot al of
736 t apes wer e made in t he 301 t aping occa-
sions in t he past mont h by t his nat ionally r ep-
r esent at ive sample of 1,501 per sons aged 10
and over . Once again, since t he OTA sur vey
did not assess how much t ape was act ually
filled on t hese occasions, it was safer t o de-
scr ibe t hese 736 as t apings (i.e. t apes used t o
r ecor d one or mor e music r ecor dings) fr om r e-
cor ds, pr er ecor ded casset t es, and CDs. As
would have been expect ed fr om t he ear lier
sur vey findings on t aping occasions, t eenager s
account ed for t he major it y of t apings made
fr om r ecor ds, casset t es, or CDs. Tapes made
by 10 t o 19-year -olds account ed for 56 per cent
of all t apes made fr om pr er ecor ded for mat s in
t he past mont h (see t able C5-17).
Tot a l Ta pi n g Est i m a t e
SRBI used past -mont h dat a t o est imat e
t ot al annual t aping in t he U.S. populat ion.
Their cor r ect ed pr oject ions wer e about 700
million br oadcast t apings and 600 million
t apings fr om pr er ecor ded sour ces per year .
OTA developed alt er nat ive est imat es of an-
nual t aping t hat used a year ly fr equency
met hod similar t o t hat used t o pr oject annual
20-900 - 89 - 5
pur chases.
25
Using da t a on pa st -yea r
t apings fr om t ables C5-6 and C5-7 and fr om
t ables C5-12 and C5-13, OTA est imat ed t hat
t her e wer e appr oximat ely 439 million br oad-
cast t apings and 578 million t apings fr om
pr er ecor ded music for mat s in t he past year
(see t able 6-2 for a summar y of t he OTA and
SRBI est imat es). The sur vey dat a suppor t ed a
br oad range of est imat ed values, depending
on t he dat a it ems and met hods used. It is im-
por t ant t o r emember t hat bot h t he SRBI and
OTA est imat es wer e of t apings, not of full
t apes or album equivalent s.
P ROF I LE OF THE HOME
TAP ER
The sur vey findings allowed OTA t o classify
t he sample populat ion int o one of four mut u-
ally exclusive cat egor ies of home t aping of
music. The lar gest cat egor y was t hose who
had not t aped music fr om r adio, t elevision, r e-
cor ds, audiot apes, or CDs in t he past year .
Sixt y-one per cent of t he populat ion aged 10
and over fell int o t hat cat egor y.
The r emaining 39 per cent of t he populat ion
had made audiot apes wit hin t he past year .
26
Of t hese, t hose who t aped only fr om r adio or
TV r epr esent ed 11 per cent of t he sampled
populat ion, t hose who have t aped only fr om
r ecor ds, casset t es, and CDs r epr esent ed 12
per cent of t he populat ion, and t hose who have
t aped fr om bot h br oadcast s and r ecor dings in
t he past year r epr esent ed 16 per cent of t he
sampled populat ion (see t able C5-19).
Table C5-19 shows t he demogr aphic char -
act er ist ics of t hese four gr oups. Bot h 10 t o
14-year -olds and Blacks had high t aping pr o-
files t hat included a high pr opor t ion of br oad-
cast t aping. While income did not seem t o be a
major fact or in home t aping, t her e appear ed
t o be a higher r at e of t aping among t hose wit h
incomes of over $50,000. These income gr oups
wer e also less likely t o be br oadcast t aper s.
What may be mor e impor t ant in under -
st anding t he past -year t aper s is how music
t aping r elat es t o ot her music-list ening char ac-
t er ist ics. The sur vey showed t hat t he past -
year music t aper had a gr eat er int er est in mu-
sic t han t he nont aper . The pr opor t ion of t hose
who consider ed music list ening ext r emely im-
por t ant incr eased fr om 16 per cent of t hose
who had not t aped music in t he past year t o 35
per cent of t hose who had t aped fr om r adio
and t elevision only, 23 per cent of t hose who
had t aped fr om pr er ecor ded for mat s, and 45
per cent of t hose who had t aped fr om bot h
br oadcast s and pr er ecor ded for mat s in t he
past year (see t able C5-20).
As a r esult , t he music t aper list ened t o mor e
music, on aver age, t han did t he nont aper .
Only 18 per cent of nont aper s list ened t o 20 or
mor e hour s of r adio in t he past week. By con-
t r ast , t he pr opor t ion of music t aper s list ening
t o 20 or mor e hour s of r adio was 34 per cent for
br oadcast t aper s, 27 per cent for t hose who
t aped r ecor dings only, and 39 per cent for
t h os e wh o t a ped bot h br oa dca s t s a n d
pr er ecor ded for mat s. Music t aper s also lis-
t ened t o mor e music on r ecor ds, t apes, and
CDs in t he past week t han did nont aper s. The
pr opor t ion of r espondent s r epor t ing not lis-
t ening t o r ecor ded music declined fr om 57
per cent of nont aper s, t o 30 per cent of br oad-
cast t aper s, t o 20 per cent of t hose who t aped
Z5W discussion of pur chase est imat e and foot not e 19.
mTher e ~a~ a ~]ipp~ ~t w~n t h
e
41 ~r cent of t he populat ion who said t hat t hey had t aped fr om a r adio, t elevision, r ecor ds,
casset t es, or CDs in t he past year , and t he combined est imat es of 39 per cent of per sons who said t hat t heir most r ecent t aping fr om
r adio and t elevision or t heir most r ecent t aping fr om r ecor ds, t apes, or CDs occur r ed wit hin t he past year . Given t he pot ent ial difficul-
t ies of classifying an act ivit y t hat occur r ed about a year ago, OTA consider ed t he differ ences in independent r epor t s t o be minimal.
Chapter 6The OTA S urvey .155
r ecor dings only, t o 13 per cent of t hose who
t aped bot h r ecor dings and br oadcast s. Simply
st at ed, t he major it y of t hose who did not t ape
music did not list en t o r ecor ded music (see t a-
ble C5-20).
Consider ing t he int er est of t he music t aper
in list ening t o music and t he fr equency wit h
which he list ened t o r ecor ded music, it is not
sur pr ising t hat t he sur vey found t hat t he mu-
sic t aper was also t he music pur chaser . As t he
t able shows, over half (53 per cent ) of t hose
who had pur chased any r ecor ds, pr er ecor ded
casset t es, or CDs in t he past year had also
t aped music fr om r adio, t elevision, r ecor ds,
t apes, or CDs. This figur e act ually under -
st at ed t he r elat ionship of music t aping and
pur chase, however . The t ot a l number of
t apings made fr om pr er ecor ded for mat s in
t he past mont h suggest ed t hat 56 per cent of
t hose copies wer e made by per sons who had
pur chased a r ecor d, pr er ecor ded casset t e, or
CD in t he past mont h. Indeed, 88 per cent of
past -year music t apings fr om r ecor dings wer e
made by per sons who had pur chased r ecor ds,
casset t es, or CDs in t he past year (see t able
C5-23).
The sur vey findings clear ly indicat ed t hat
music t aper s wer e also music pur chaser s, and
vice ver sa. Mor eover , t hey also suggest ed t hat
fr equent t aper s also t ended t o be fr equent
buyer s. This associat ion did not necessar ily
mean t hat home music t aping st imulat ed
buying pr er ecor ded music or t hat t he pur -
chase of pr er ecor ded music might not have
been mor e fr equent wit hout t aping. It did,
however , indicat e t hat any act ions dir ect ed at
music t aper s would affect pr imar ily t he pur -
chaser s of r ecor ded music.
Al bu m v. S el ect i on Ta pi n g
The t ype of t aping done by home t aper s de-
t er mined whet her t hey wer e pr oducing an ex-
act copy of a commercially available product.
This issue r evolved ar ound whet her home t a-
per s wer e pr imar ily cr eat ing cust omized se-
lect ions of music, which did not exist in t he
cur r ent mar ket place, or whet her t hey wer e
duplicat ing albums t hat could be pur chased.
The sur vey findings helped t o clar ify t his is-
sue. The br oadcast t aping of music fr om r adio
and t elevision was almost exclusively nonal-
bums. The sur vey r esponses suggest ed t hat
only 8 per cent of t he most r ecent br oadcast
t apings involved t he copying of an album,
while anot her 15 per cent might have involved
a mixt ur e of albums and select ions. A major -
it y of 56 per cent r epor t ed t hat t hey wer e t ap-
ing only singles or select ions on t hat occasion
(see t able C6-1).
By cont r ast , album t aping was much mor e
widespr ead in t he t aping of r ecor ded music.
Among t hose who had t aped r ecor ds, cas-
set t es and CDs in t he past year , 70 per cent r e-
por t ed t aping one or mor e complet e albums
on t heir most r ecent t aping occasion. As can
be seen in t able C6-3, t he gr oup wit h t he high-
est pr opor t ion of album t aping was t he 10 t o
14-year -olds, while t he over -65 gr oup had t he
lowest pr opor t ion. The var iat ion by age was
fair ly small, however .
Cr oss-t abulat ing album t aping wit h selec-
t ion t aping for t he most r ecent t aping exper i-
ence fr om pr er ecor ded for mat s enabled OTA
t o classify t he populat ion in t er ms of t he con-
t ent s of t he last t ape t hey made. Appr oxi-
mat ely half (48 per cent ) of t he last home
t apings of pr er ecor ded music involved t he
t aping of whole albums wit h no select ions.
This r epr esent simple duplicat ion of exist -
ing albums, eit her in t heir or iginal or a differ -
ent for mat . Anot her 21 per cent of t he most r e-
cent home t apings fr om pr er ecor ded music
involved t he copying of whole albums in com-
binat ion wit h select ions fr om ot her albums or
singles. The pr opor t ion of most r ecent t apings
t hat r epr esent ed select ion t aping, exclusively,
was 21 per cent . The r emaining 10 per cent of
most r ecent t apings wer e only par t ially classi-
fiable because of missing values on one or t he
ot her measur es (see t able C6-5).
S ou r ce of Copy: Recor d i n g For m a t
By definit ion, all cur r ent home t aping is
done ont o an audiot ape for mat , but t her e r e-
mains t he quest ion of t he for mat of t he or igi-
nal pr er ecor ded mat er ial.
The sur vey found t hat half (49 per cent ) of
t hose who had copied fr om pr er ecor ded for -
mat s in t he past year made t heir most r ecent
t aping fr om a r ecor d. Anot her 28 per cent of
t he most r ecent t apings wer e fr om casset t es,
while t he r emaining 18 per cent of t apings
wer e fr om CDs.
The for mat of t he or iginal mat er ial fr om
which home t apes wer e made was quit e differ -
ent fr om t he most r ecent pur chase pat t er n
seen ear lier . Recor ds r epr esent ed 18 per cent
of most r ecent ly pur chased r ecor dings, but 49
per cent of t he r ecor dings copied in t he most
r ecent t aping. By cont r ast , t he dominant for -
mat for buying pr er ecor ded music t he cas-
set t e r epr esent ed only 28 per cent of t he
most r ecent t apings fr om pr er ecor ded for mat .
If t he pr imar y mot ivat ion for home copying
was t o obt ain cur r ent r eleases wit hout buying
t hem, one would expect t he same dist r ibut ion
of r ecor ded for mat s copied as t he dist r ibut ion
of for mat s pur chased. This was not t he case. It
appear ed r at her t hat home t aping was being
done at least in par t t o conver t r ecor dings
in ot her for mat s t o t he dominant playback
mode. Since r ecor ds and CDS cannot (usually)
be played in car s and in por t able playback
equipment , it would appear t hat at least some
home t aping was being done t o conver t exist -
ing r ecor ds t o t he mor e flexible for mat of
audiot ape.
S ou r ce of Or i gi n a l : Own v. Ot h er s
All sur vey r espondent s who had copied
fr om a pr er ecor ded for mat in t he past year
wer e asked about t he sour ce of t he or iginal
fr om which t hey made t he most r ecent t ape
t heir own, a r ecor ding bor r owed fr om house-
hold member s or family, one bor r owed fr om
fr iends, or one obt ained elsewher e. The ques-
t ion was asked separ at ely for complet e al-
bums being copied and for individual selec-
t ions being copied dur ing t he last t aping
session.
The sur vey found t hat a major it y of home
music t aper s, who wer e t aping one or mor e
whole albums in t heir most r ecent t aping,
wer e using t heir own or iginal r ecor d, t ape, or
CD t o make t he t ape (57 per cent ). Mor eover ,
anot her 7 per cent of home t aper s wer e using
an album owned by anot her member of t heir
household (3 per cent ) or t heir family (4 per -
cent ) (see t able C6-10).
Per m a n en ce of Ta pe Li br a r i es
Near ly t hr ee-quar t er s of t he most r ecent
home t apings of pr er ecor ded music wer e
made for t he t aper s own use (73 per cent ). An-
ot her 7 per cent of t hese t apings wer e made for
anot her member of t he household. About one-
fift h (19 per cent ) of most r ecent home t apings
wer e made by t he t aper for someone out side
t he household. The incidence of t aping for
out sider s was highest among t hose aged 15 t o
19 (27 per cent ) (see t able C6-12).
The sur vey found t hat t he vast major it y of
home audiot apes wer e made t o keep. Sixt y-
nine per cent of t hose who made a t ape for
t hemselves fr om r adio or t elevision in t he past
year r epor t ed t hat t he last t ape t hey made was
t o keep, not t o use t empor ar ily. Even mor e
st r ikingly, 85 per cent of t hose who made a
t ape for t hemselves fr om r ecor ds, t apes, or
CDs in t he past year r epor t ed t hat t he last
t ape t hey made was made t o keep. This is in
shar p cont r ast t o t he pat t er n for videot aping,
which will be discussed fur t her in a lat er sec-
t ion.
Ch a pt er 6Th e OTA S urvey q 157
R ea son s f or T a pi n g
When asked in an open-ended fashion why
t hey had made t heir most r ecent t ape fr om a
pr er ecor ded for mat , t he r espondent s single
most common explanat ion given by one-
fift h (21 per cent ) of t he samplewas t hat
t hey had want ed a t ape for t heir car . In addi-
t ion, 3 per cent wa nt ed a t a pe for t heir
walkman-t ype player , while anot her 2 per cent
want ed t o be able t o play t he r ecor ding on an
unspecified t ype of t ape player . In ot her
wor ds, over a quar t er of t he most r ecent cop-
ies of pr er ecor ded music wer e made t o play
t he r ecor ding on ot her playback equipment
belonging t o t he t aper (see t able C7-1).
Making a t ape t o give t o someone else was
anot her common mot ive for t aping. One in
five t aper s r epor t ed making t he most r ecent
t ape t o give t o a fr iend ( 14 per cent ) or a family
member (6 per cent ). By cont r ast , only a
smaller pr opor t ion explained t he most r ecent
t ape in t er ms of making a select ion t ape (6
per cent ) or saving money/avoiding pur chase
(6 per cent ).
This is not t o say t hat economic concer ns
wer e not a fact or in home t aping. The major -
it y of home t aper s (57 per cent ) indicat ed t hat
t hey could have pur chased t he same mat er ial,
if t hey had so want ed. Of t hese, a major it y (63
per cent ) said t hat t he fact t hat t aping was less
expensive t han pur chasing was an impor t ant
fact or in t heir r eason for making t heir most
r ecent t ape. When combining t he pr opor t ion
of t aper s who could have bought t he mat er ial
wit h t he pr opor t ion who consider ed saving
money an impor t ant fact or , t he sur vey find-
ings suggest ed t hat t he fact t hat t aping was
less expensive t han buying was impor t ant in
about 36 per cent of t he most r ecent t apings
(see t ables C7-2 and C7-3). Nat ur ally, answer s
t o t hese quest ions did not pr ove t he ext ent t o
which t he oppor t unit y t o save money act ually
influenced r espondent s behavior .
The most r ecent t aping was select ed as t he
most valid single measur e of t he nat ur e of
home t aping. To gat her addit ional infor ma-
t ion on consumer mot ivat ion, however , t he
sur vey asked r espondent s (aged 16 and over )
who had t aped fr om a pr er ecor ded for mat in
t he past year whet her t hey had ever made a
t ape for one of six r easons ar e list ed in t able
C7-4. Those who had made a t ape for one of
t hese r easons wer e asked when t hey had last
made a t ape pr imar ily for t hat r eason. If t he
most r ecent occasion was wit hin t he past
mont h, t hey wer e asked t he number of t imes
t hey had made a t ape for t hat r eason.
The most common r eason for home t aping
fr om pr er ecor ded for mat s in t he past mont h,
accor ding t o t he sample of t aper s, was t o per -
mit t he t aper t o shift a r ecor ding he owned t o
ot her playback equipment . One-t hir d of occa-
sions r epor t ed in t he past mont h (34 per cent )
was mainly t o make t apes of t heir own r e-
cor ds, casset t es, and CDs so t hat t hey can play
t hem in t heir car , Walkman, or elsewher e.
This was consist ent wit h t he leading r easons
given for t he most r ecent t aping.
Taping select ions t o cr eat e t heir own cus-
t omized pr ogr am of music on t ape, which
was at t r ibut ed by adult s t o compr ise 23 per -
cent of past -mont h t apings, emer ges as t he
second most common fact or in home t apes
made by adult s. A lit t le less t han one-fift h (18
per cent ) of t he t aping occasions in t he past
mont h ar e at t r ibut ed by adult t aper s t o a de-
sir e t o pr ot ect t he or iginals fr om damage and
keep t hem fr om wear ing out . By cont r ast ,
only 13 per cent of music t apings by adult s
fr om pr er ecor ded for mat s wer e at t r ibut ed t o
making t apes of fr iends r ecor dings so t hat
t hey dont have t o buy t hem (see t able C7-4).
COP YI NG AND THE
RECORDED MUSI C MARKET
S a l es Di spl a cem en t of Hom e Ta pi n g
Exa ct mea sur ement of t he a mount of
pr er ecor ded music sales displaced by home
t aping was beyond t he scope of t his sur vey.
However , t he sur vey does pr ovide an oppor t u-
nit y t o explor e t he r elat ive pr opor t ion of
home t apings t hat might be displacing sales,
compar ed wit h t hose t hat do not . Chapt er 7
discusses t he use of t he sur vey dat a t o develop
a r ange of est imat es of t he ext ent t o which
homemade t apes displace sales.
The sur vey found t hat 57 per cent of t hose
who t aped fr om a pr er ecor ded for mat in t he
past year t hought t hat t hey could have bought
t he mat er ial if t hey had wished (see t able
C7-2). Ther e was no clear pat t er n by age, sex,
r ace, or income for t he willingness t o pur chase
in t he absence of t aping. Pr esumably, t hen,
t he willingness t o buy depended mor e on
value t o t he individual of t he par t icular it em
being t aped (see t ables C8-2, C8-3).
One fact or in t he value of t he homemade
t ape t o t he t aper appear ed t o be it s int ended
end use. A major it y of t aper s who wer e mak-
ing t he t ape for t hemselves (53 per cent ) said
t hat t hey would have pur chased t he mat er ial
if t hey could not t ape. By cont r ast a minor it y
of t hose making t he t ape for ot her household
member s (32 per cent ) or ot her per sons (42
per cent ) said t hat t hey would be willing t o
pur chase if t hey could not t ape it . This sug-
gest s t hat t aping for ot her people is a mar -
ginal act ivit y for most t aper s.
Those who would not buy, even if t hey could
not make a t ape, wer e asked why t hey would
not pur chase t he mat er ial. Thr ee answer s
wer e given by t wo-t hir ds of t his gr oup. Fir st ,
29 per cent of nonbuyer s said t hat t hey alr eady
had a copy of t he mat er ial t hey did not need
anot her copy. For t hese, t he t ape appear ed t o
have been a convenience, an ext r a copy for
pr ot ect ion or use elsewher e, but not wor t h
paying for . Second, 23 per cent said t hat t hey
could not affor d t o buy it . Anot her 19 per cent
said t hey would not buy t he r ecor ding because
t hey did not like it enough or wer e not int er -
est ed enough t o pay for it .
As ment ioned ear lier , 57 per cent of t hose
who t aped fr om a pr er ecor ded for mat in t he
past year t hought t hat t hey could have bought
t he mat er ial if t hey had wished. Of t hose,
about half (49 per cent ) said t hat t hey would
have bought it , if t hey had been unable t o t ape
(see t able C8-2). In 77 per cent of cases in
which t he t aper could have pur chased, t he t a-
per said t hat if he had bought t he r ecor ding, it
would have been in addit ion t o ot her r ecor d-
ings pur chased, r at her t han in place of t hem
(see t able C8-5). Wit h t hese t hr ee sample pr o-
por t ions combined, (0.57 x 0.49 x 0.77), t he
sur vey dat a would suggest t hat about one-
fift h (22 per cent ) of t he most r ecent t apings
fr om pr er ecor ded for mat s displaced sales of
pr er ecor ded music t hat might have ot her wise
been made, if t he r espondent could not t ape;
however t his est imat e may be excessively
high.
It is impor t ant t o not e t he per ils of using hy-
pot het ical quest ions (such as Would you
have pur chased t hat it em if you wer e unable
t o t ape? or Would it have been in addit ion t o
ot her r ecor dings you have pur chased?) in
sur veys. Typical mar ket ing r esear ch exper i-
ence is t hat only about half (or even fewer ) of
t he people who answer affir mat ively t o hypo-
t het ical quest ions act ually engage in t he be-
ha vior being st udied.
27
Thus, any undis-
count ed est imat e of displacement based on a
ser ies of quest ions like t hese should be consid-
er ed an upper bound.
Such an analysis based on hypot het ical
quest ions (and a small por t ion of t he sample
populat ion) was only meant t o be suggest ive
and t o give an upper bound t o possible con-
sumer behavior . If t he analysis was cor r ect , a
sales displacement r at e of possibly 22 per cent ,
but pr obably much lower , could be pr oject ed
z7~e S RB1 repO~, op. cit., footnote 14, pp. 102-103, for a discussion of t he use of hypot het ical quest ions.
Ch a pt er 6Th e OTA S u r vey . 159
for r ecor d indust r y sales. On t he ot her hand,
t his r at e also suggest ed t hat if people wer e un-
able t o make t apes, over t hr ee-four t hs of t he
t apes t hat would have been made would not
be r eplaced by sales of pr er ecor ded music.
S t i m u l a t i ve Ef f ect s of Ta pi n g
Some have ar gued t hat home t aping may
st imulat e sales of pr er ecor ded music, even if it
displaces some sales. The accur at e measur e-
ment of sales st imulat ion in a r et r ospect ive in-
t er view was even mor e difficult t han t he est i-
mat e of sales displacement . The sur vey did
suggest t he likelihood of a st imulat ive influ-
ence of home t aping on music pur chases, but
t he dat a did not suppor t a quant it at ive est i-
mat e of it s magnit ude.
Home t apes may br oaden audience awar e-
ness of per for mer s and r ecor dings in t he mar -
ket place. Hear ing a piece of music or a per -
for mer on a homemade t ape may not cause
a per son t o make a pur chase, but t he home
t ape must be consider ed t o have some pr omo-
t ional value. Appr oximat ely one-quar t er (24
per cent ) of past -year pur chaser s r epor t ed
t hat t hey had hear d t he r ecor ding or per -
for mer of t he r ecor ding t hat t hey most r e-
cent ly pur chased on a t ape made by t hem-
selves or someone else befor e t heir pur chase
(see t able C8-11,).
The audience r each of homemade t apes is
clear ly not t hat of eit her r adio or pr er ecor ded
music for mat s. Nonet heless, mor e r ecent pur -
chaser s r epor t ed having hear d t he per for mer
or r ecor ding t hat t hey most r ecent ly pur -
chased on homemade t apes t han in concer t
(21 per cent ). It is also impor t ant t o not e t hat
having hear d t he per for mer or r ecor ding on
homemade t ape did not discour age subse-
quent pur chase in t hese cases (see t able
C8-11).
A second possible st imula t ive effect of
home t aping was r elat ed t o pur chaser s int ent
t o t ape when t hey bought r ecor ds, t apes, or
CDs. Those who had pur chased a r ecor ding in
t he past year wer e asked whet her t hey had ex-
pect ed t o t ape fr om his most r ecent pur chase,
at t he t ime t hey bought it . One out of seven
past year buyer s (14 per cent ) said t hat at t he
t ime of t heir most r ecent pur chase of a r ecor d,
t ape, or CD, he expect ed t o t ape fr om t he r e-
cor ding he pur chased (see t able C8-13).
Sur vey findings point t o an int er est ing r ela-
t ionship bet ween t he pur chase of r ecor ded
music wit h an expect at ion of t aping and t he
for mat of t he mat er ial pur chased. Alt hough
pr er ecor ded casset t es ar e t he most fr equent ly
pur chased, only 8 per cent of t hose buying a
casset t e on t heir most r ecent pur chase bought
wit h t he expect at ion of copying it . By com-
par ison, 16 per cent of t hose who bought a CD
r epor t t hat t hey bought t he CD wit h t he int en-
t ion of copying it . Most dr amat ically, over a
t hir d (35 per cent ) of t hose who pur chased a
r ecor d on t heir most r ecent buying occasion
bought t he r ecor d wit h t he expect at ion of
copying fr om it (see t able C8- 13). This is con-
sist ent wit h ear lier findings t hat r ecor ds ar e
t he most common for mat fr om which music
is t aped.
How many per sons have act ually t aped
fr om t heir most r ecent pur chase? The sur vey
found t ha t a mong pa st -yea r pur cha ser s,
about 1 in 10 (11 per cent ) had made a t ape
fr om his most r ecent pur chase by t he t ime of
t he int er view (see t able C8-14). It is not able
t hat fewer pur chaser s had act ually made a
t ape (11 per cent ) t han had int ended t o make a
t ape when t hey bought t he r ecor ding (14 per -
cent ). When cr oss-t abulat ing pur chase int ent
wit h act ual t aping, t he sur vey found only half
(51 per cent ) of t hose who int ended t o t ape
t heir most r ecent pur chase had t aped it by t he
t ime of t he int er view. By cont r ast , only 4 per -
cent of t hose who had not expect ed t o t ape
fr om t heir most r ecent pur chase r epor t ed
t hat t hey had t aped fr om it by t he t ime of t he
sur vey.
R ecor d i n g of Non copyr i gh t ed
Ma t er i a l
It should not be assumed t hat t aping music
fr om br oadcast s or pr er ecor ded for mat s is t he
main or only use of home audio r ecor ding
t echnology. The sur vey found t hat 62 per cent
of r espondent s who had used t ape r ecor der s in
t he past year had t aped mat er ial ot her t han
pr er ecor ded music. This figur e t r anslat ed
int o 32 per cent of t he ent ir e sample of per sons
aged 10 and older who used t ape r ecor der s t o
r ecor d noncopyr ight ed mat er ial, such as fam-
ily member s voices, r epor t s, dict at ions, and
messages (see t able C9-1.) As wit h t he r ecor d-
ing of pr er ecor ded music, younger people
wer e most likely t o use an audio r ecor der t o
r ecor d noncopyr ight ed mat er ial.
In compar ing t he number of r epor t ed occa-
sion s of t a pin g mu sic a n d t a pin g n on -
Photo Credit Office of Technology Assessment
Some tapes are of family members voices.
copyr ight ed mat er ial, t he sur vey findings sug-
gest ed t hat near ly t hr ee in four (73 per cent ) of
t aping occasions in t he past mont h involved
t aping t hings ot her t han pr er ecor ded music.
In ot her wor ds, in t hr ee out of four t imes a
t ape r ecor der was used in Amer ican house-
holds in t he past year , it was used t o t ape
voices, messages, music played by t he r espon-
dent , and ot her mat er ial (see t ables C9-3,
C9-4, and C9-9).
While t he sur vey suggest ed t hat home
audio r ecor der s wer e used mor e fr equent ly t o
t ape mat er ial ot her t han pr er ecor ded music,
t his did not mean t hat most homemade t apes
cont ained noncopyr ight ed mat er ial. The na-
t ur e of t he t wo t ypes of r ecor ding is consider -
ably differ ent because r ecor dings of noncopy-
r ight ed mat er ial var y widely in lengt h and
t ype. The most dr amat ic example is t he r e-
cor ding and r er ecor ding of a t elephone an-
swer ing machine message. This sur vey did not
at t empt t o measur e t he amount of space in
homemade audiot apes t hat cont ained pr e-
r ecor ded music as opposed t o noncopyr ight ed
mat er ial.
The sur vey did suggest t hat people make
lit t le discr iminat ion in t he gr ade of blank
t apes t hey used. Only about a quar t er (23 per -
cent ) of t hose making t apes of noncopyr ight ed
mat er ial and about a t hir d (32 per cent ) of mu-
sic t aper s knew what gr ade of audiot ape t hey
used t o make t heir most r ecent r ecor ding.
Among t hose who did know what kind of t ape
t hey wer e using, a somewhat higher pr opor -
t ion of t hose t aping noncopyr ight ed mat er ial
(38 per cent ), compar ed wit h music t aper s (27
per cent ), r epor t ed using a nor mal bias gr ade
of blank t ape.
Ta pi n g Tech n ol ogy a n d t h e Hom e-
Ta pe I n ven t or y
The sur vey document ed t he pr esence of
mult iple t ape player /r ecor der s in most house-
holds, but did not det er mine t he pur pose for
Ch a pt er 6Th e OTA S u r vey q 161

which t hey wer e bought . Mor eover , many
households had one or mor e r ecor der s wit h
dual-casset t e and speed-dubbing funct ions,
which facilit at e t he copying of pr er ecor ded
music.
The sur vey found r elat ively lit t le r elat ion-
ship bet ween t he pr esence of a dual-casset t e
r ecor der in t he household and t he number of
home audiot apes made by t he r espondent .
Among t hose who owned no audiot apes made
by t hemselves, near ly a quar t er [24 per cent )
had casset t e r ecor der s wit h dual-casset t e
dr ives. The availabilit y of advanced copying
feat ur es did not appear sufficient t o gener at e
home t aping among t hose who owned t hem
(see t able C10-6).
The amount of homemade audiot apes t hat
t he r espondent owned did not seem t o be r e-
lat ed t o t he pr esence or absence of a dual-cas-
set t e r ecor der . The incidence of dual-casset t e
r ecor der s was basically t he same about half-
for t hose r epor t ing 1 t o 10 homemade t apes in
t heir collect ion (51 per cent ), 11 t o 25 t apes (50
per cent ), and 26 t o 50 t apes (48 per cent ). Of
t hose wit h over 100 homemade t apes, 65 per -
cent had dual casset t es, and t hose wit h 51 t o
100 t apes had a r at her low 42 per cent (see t a-
ble C10-6).
A similar pat t er n was found bet ween t he
number of homemade audiot apes in a r espon-
dent s collect ion and equipment wit h fast -
dubbing feat ur es. Rest r ict ing t he analysis t o
t hose per sons wit h dual-casset t e r ecor der s,
t he sur vey found t hat t he pr opor t ion of per -
sons wit h dual r ecor der s included 59 per cent
of t hose who have no homemade t apes at all.
Mor e impor t ant , t he r at e of fast -dubbing ca-
pabilit y incr eased fr om 62 per cent for t hose
wit h 1 t o 10 homemade t apes t o 84 per cent for
t hose wit h 100 or mor e. The pr opor t ion wit h
fast dubbing did incr ease among heavy t aper s,
but not dr amat ically (see t able C10-7).
The dat a suggest ed t hat t he t echnology of
fast dubbing and dual casset t es did not seem
t o be dr iving home t aping. Rat her , t heir dis-
t r ibut ion looked mor e like an incident al r e-
sult of t he number (and possible r ecency) of
t ape player /r ecor der s in t he household. This
suggest ed t hat playback t echnology, r at her
t han copying t echnology, has dr iven home
t a ping.
HOME
Th e su r vey
VI DEOTAP I NG
a t t empt ed t o det er mi n e
whet her t he behavior s st udied in some det ail
in t he ar ea of music t aping wer e similar t o t he
gener al pat t er n of ot her for ms of home t ap-
ing, specifically videot aping.
The videocasset t e r ecor der (VCR) was t he
second most pr evalent for m of consumer r e-
cor ding t echnology. While 94 per cent of t he
sample populat ion had audiocasset t e decks,
69 per cent had one or mor e wor king videocas-
set t e decks. Thus, mor e t han t wo-t hir ds of t he
populat ion had t he abilit y t o r ecor d video pr o-
gr amming fr om br oadcast or cable t elevision.
Indeed, a major it y (59 per cent ) of VCR owner s
r epor t ed r ecor ding one or mor e pr ogr ams
fr om t elevision in t he past mont h. Mor e t han
a quar t er of VCR owner s (28 per cent ) r epor t ed
five or mor e t aping occasions in t he past
mont h, t hat is, mor e t han once a week on av-
er age.
The sur vey findings suggest ed t hat t he ma-
jor it y of pr ogr ams t aped fr om t elevision wer e
movies, spor t ing event s, and soap oper as, wit h
r elat ively fewer pr ime-t ime net wor k pr o-
gr ams. The major it y of t hose t aping t elevision
pr ogr ams (62 per cent ) r epor t ed t hat t heir
most r ecent ly made videot ape was made t o be
used only t empor ar ily, r at her t han t o keep.
The nat ur e of t he pr ogr amming appear ed t o
have a major impact on t he per manence of t he
r ecor ding. Most of t hose t a ping spor t ing
event s, comedy or dr ama ser ies, or t alk shows
made t he t apes for t empor ar y use. But sub-
st ant ial por t ions of t hose t aping concer t s, mu-
sic videos, movies, mini-ser ies, document a-
r ies, car t oons, and educat ional pr ogr ams
made t he t apes t o keep (see t ables C12-10 and
C12-11.)
Vi d eot a pe Copyi n g
Alt hough t elevision t aping was common
among VCR owner s, copying videot apes was
not . Only one in five VCR owner s who had ac-
quir ed a videot ape in t he past year (20 per -
cent ) r epor t ed ever having copied a videot ape,
eit her pr er ecor ded or home r ecor ded. The
pr opor t ion of VCR owner s who had copied a
t ape in t he past year was only about 1 in 10 (12
per cent ) (see t able C12-12). Tape copies ac-
count ed for only 2 per cent of t he most r e-
cent ly acquir ed videot apes, compar ed wit h 23
per cent of t hose t hat wer e pur chased by t he
r espondent , and 54 per cent r ecor ded fr om
t elevision (see t able C12-8).
Unlike t he copying of pr er ecor ded audio
for mat s, only a minor it y of t he videot apes
t hat wer e copied belonged t o t he r espondent
or his family. Near ly a quar t er (23 per cent ) of
t he most r ecent ly copied videot apes wer e ob-
t ained fr om a video club or st or e. The bulk (42
per cent ) of or iginals, however , wer e obt ained
fr om fr iends. The sur vey suggest ed a modest
level of exchanging videot apes among fr iends
t o make copies, as well as copying videot apes
for fr iends. When asked whet her t hey could
have pur chased t he videot ape t hey copied if
t hey had want ed t o, a lit t le over one-t hir d (35
per cent ) t hought t hat t hey could have bought
t he t ape, while 57 per cent t hought t hat t hey
could not have, and 8 per cent wer e not sur e
(see t able C12-19). Of r espondent s who made
a videot ape copy in t he past year , 70 per cent
r epor t ed t hat t hey made t he copy wit h t he in-
t ent ion of keeping it .
Com pa r i son of Vi d eo- a n d
Au d i ot a pi n g Beh a vi or s
While t he pat t er n of t elevision home r e-
cor ding in gener al was consist ent wit h t he
t ime-shift ing explanat ion, t his applied t o ver y
lit t le of r adio r ecor ding. Most videot apes fr om
t elevision wer e made for t empor ar y use
t hat is, t o be viewed once, or a few t imes, at t he
convenience of t he owner . The sur vey dat a
showed a clear differ ence in t he pr opor t ion of
t apes made wit h t he int ent ion of per manent
r ecor ding fr om r adio (69 per cent ) and t elevi-
sion (35 per cent ). This differ ence may have r e-
flect ed t he pr opor t ion of pr ogr amming in t he
t wo media t hat had per manent value t o t he
consumer . As not ed above (t ables C12-10 and
C12-11), a higher pr opor t ion of music pr o-
gr ams wer e made t o keep (80 per cent ). Thus,
videot aping of concer t s, and musical ent er -
t ainment seemed t o be mor e similar t o t he
pat t er n of audiot aping.
One goal of t he sur vey was t o det er mine
whet her t her e was conver gence bet ween t he
populat ions of audiot ape copier s and vide-
ot ape copier s. Table C12-21 shows t he r e-
sponses of music t aper s (who had acquir ed a
videot ape in t he past year ) t o t he quest ion,
Have you ever copied a videot ape? The sur -
vey found some r elat ionship bet ween per sons
who copied videot apes and t hose who copied
pr er ecor ded music. As not ed ear lier , 20 per -
cent of t he sample populat ion (17 and older )
who had acquir ed a t ape wit hin t he past year
r epor t ed having ever copied a videot ape. As
shown in t he t able, higher pr opor t ions of r e-
spondent s who t ape fr om pr er ecor ded for -
mat s (30 per cent ) and fr om bot h r adio and
pr er ecor ded for mat s (39 per cent ) r epor t ed
having copied a videot ape.
Despit e t he sur vey evidence of incr eased
likelihood of videot ape copying among t hose
who audiot ape, t his t endency was limit ed.
Not e t hat among t hose who had t aped music
bot h r adio and fr om pr er ecor ded for mat s in
t he past year , 60 per cent had never copied a
videot ape. By cont r ast , t he 12 per cent of non-
music t aper s who had made a videot ape r ep-
r esent ed over onet hir d (35 per cent ) of all vide-
ot ape copier s.
Analyzing t he most r ecent videot ape acqui-
sit ion t ended t o confir m t his pat t er n. The pr o-
por t ion of most r ecent ly acquir ed videot apes
t hat wer e r ecor ded fr om t elevision was some-
what higher among t hose who had audiot aped
Ch a pt er 6Th e OTA Sur vey q 163
music in t he past year (59-68 per cent ) t han
among t hose who had not (49 per cent ). Given
t he gr eat er number of nonmusic t aper s, how-
ever , t he sur vey found t hat t he major it y of
t hose whose most r ecent videot ape acquisi-
t ion was r ecor ded fr om t elevision had done no
music audiot aping in t he past year . Ther e
seemed t o be lit t le differ ence bet ween music
t aper s and ot her s in t er ms of t he pr opor t ion
of copied t apes (see t able C12-22).
Hence, t he sur vey findings suggest ed t hat
home video copying and home audio copying
wer e not done by t he same people, for t he
same r easons, under t he same condit ions.
Ther e was some over lap bet ween t he t wo be-
havior s, but t hey wer e subst ant ially differ ent .
P UBLI C ATTI TUDES
At t i t u d es T owa r d T a pi n g
The sur vey found t hat most member s of t he
public consider ed t hemselves t o be unfamiliar
wit h copyr ight law, but t hey never t heless had
clear -cut ideas about t he accept abilit y of
home t aping. The major it y of t he public (76
per cent ) consider ed it self only slight ly or not
at all infor med about copyr ight laws and t heir
applicat ion t o home t aping (see t able C11-1).
The sur vey did show a r elat ionship bet ween
t aping and familiar it y wit h copyr ight law. A
higher pr opor t ion of past -year t aper s (32 per -
cent ) t han nont aper s (20 per cent ) consider ed
t hemselves ext r emely or quit e familiar wit h
t he law. Per ceived familiar it y wit h copyr ight
law did not r educe t he likelihood of home t ap-
ing, nor did lack of familiar it y wit h t he law in-
cr ease it .
To lear n what kind of nor ms exist ed in t he
area of home t aping, sur vey r espondent s wer e
a sked t o cla ssify cer t a in beha vior s on a
7-point scale of per sonal accept abilit y. A scor e
of 7 meant t hat t he act ion was per fect ly ac-
cept able. A score of one meant t hat it was not
at all accept able. The specific wor ding of t he
quest ion appear s in t able C11-2.
When asked about t he accept abilit y of mak-
ing a t aped copy for your own use of a r ecor d,
t ape, or CD t hat you own, a major it y (57 per -
cent ) gave a scor e of 7 per fect ly accept able.
Mor eover , 75 per cent of r espondent s r anked
t his behavior on t he accept able side of t he
scale (i.e., 5 t o 7). Only 11 per cent of t he public
r anked copying of r ecor ds, casset t es or CDs
now owned for his own use on t he unaccept -
able side of t he scale (see t able 11-2).
The public accept abilit y of many for ms of
home music t aping was even mor e clear ly
seen in consider ing sit uat ions in which t he
owner of t he or iginal mat er ials did not r et ain
t he copies of t he pr er ecor ded music. When
asked how accept able t hey consider ed mak-
ing a t aped copy t o give t o a fr iend of a r ecor d,
casset t e, or CD t hat you own, a major it
y
of
t he sample (63 per cent ) r at ed t he behavior as
accept able (i.e., 5 t o 7 on t he scale), while 40
per cent r at ed it per fect ly accept able. Re-
sponses concer ning t he accept abilit y of t aping
bor r owed mat er ials wer e vir t ually ident ical,
and it appar ent ly did not mat t er t o r espon-
dent s whet her t he t aper was copying whole al-
bums or select ions (see t able C11-2).
The only for m of t aping t hat t he sur vey
found unaccept able t o t he public, among t he
five gener al t ypes explor ed, was t aping for
gain. When asked about t he accept abilit y of
making a t aped copy t o sell of a r ecor d, cas-
set t e, or CD t hat you own, t hr ee-quar t er s (76
per cent ) of t he r espondent s r at ed it as not ac-
cept able (1 t o 3 on t he scale); indeed, t wo-
t hir ds (67 per cent ) found it not at all accept -
able.
Ther e wer e differ ences in t he over all r at ing
of t he accept abilit y of t he var ious for ms of
t aping behavior t hat depended on t he r espon-
dent s t aping behavior . The aver age accept -
abilit y r at ing of each of t he five act ions t est ed
was a full point higher among r espondent s
who had made t apes in t he past year t han it
was for per sons who had made no music
t apes. Never t heless, among nont aper s t he av-
er age accept abilit y r at ing of t aping ones own
or iginals for per sonal use was 5.6 on t he ac-
cept able side of t he r ange. Behavior s of mak-
ing copies of bor r owed mat er ials or giving
copies t o ot her s was viewed by t he nont aper as
being on t he edge of t he accept able r ange (4.6
t o 4.8). Only t aping t o sell was r at ed as unac-
cept able by nont aper s (see t able C11-3).
It is also inst r uct ive t o not e t he at t it udes of
t hose who pur chase pr er ecor ded music wit hin
t he past year . They consider ed all of t he copy-
ing sit uat ions descr ibed, except for t aping t o
sell, as accept able for ms of behavior . Those
who wer e mor e cr it ical of music copying wer e
r espondent s who had not bought any r e-
cor ded music in t he past year .
These sur vey findings clear ly showed an un-
der lying set of social nor ms t hat wer e suppor -
t ive of home t aping of music. They appear ed
t o r eflect a set of feelings about t he r ight s of
owner ship. Ther e seemed t o be agr eement
among t he public t hat a per son who pur -
chased a r ecor ding had t he r ight t o make cop-
ies for his own, or a fr iends use. The public
did, however , dr aw t he line at using home t ap-
ing for pr ofit , i.e., making copies t o sell. This
sur vey finding par alleled qualit at ive findings
fr om focused gr oup discussions in which t a-
per s and nont aper s agr eed t hat t aping t o
save money was accept able, but t aping t o
make money was wr ong.
Fa i r n ess of T a pi n g
Respondent s wer e also asked t heir opinion
concer ning t he fair ness of t he pr esent sit u-
at ion for each of t hr ee affect ed par t ies t he
r ecor ding indust r y, song wr it er s and per for m-
er s, and t he aver age consumer . The specific
quest ion appear s in t able C11-5.
Ther e did not seem t o be a consensus about
t he fair ness of home t aping t o any of t he af-
fect ed par t ies. Slight ly mor e of t he r espon-
dent s felt t hat cur r ent pr act ices wer e fair t o
t he ar t ist s and indust r y t han felt t hat t hey
wer e unfair , but near ly a quar t er had no opin-
ion. Indeed, near ly a quar t er had no opinion
on t he fair ness of cur r ent pr act ices t o t he av-
er age consumer . As might be expect ed, t aper s
t ended t o see t he cur r ent pr act ices of home
t aping as fair er t o ever yone t han did t he non-
t aper s. Similar ly, buyer s of r ecor ded music
t ended t o see t he cur r ent sit uat ion as fair er
t han did nonbuyer s. No one, however , seemed
t o see fair ness as a clear enough issue t o come
down on one side or t he ot her for any of t he
par t ies.
At t i t u d es Towa r d Pol i cy Ch a n ges
A number of alt er nat ives have been pr o-
posed for eit her discour aging home copying of
pr er ecor ded music or compensat ing copy-
r ight holder s. To gauge public opinion con-
cer ning a r ange of alt er nat ive dir ect ions for
dealing wit h home t aping, t he adult (17 or
older ) member s of t he sample wer e asked:
Now using t he same scale r unning fr om one,
meaning not at all fair , t o 7, meaning per fect ly
fair , Id like t o know how fair each of t he fol-
lowing suggest ions would be, or dont you
have an opinion?
A major it y of t he sur vey r espondent s con-
sider ed t he alt er nat ives of limit ing r ecor ding
t echnology as unfair . A major it y (56 per cent )
consider ed t he suggest ion t hat new audio r e-
cor der s should be built so t hey cant copy
commer cial r ecor dings as being in t he unfair
r ange (i.e., 1 t o 3) wit h 42 per cent r at ing t he
opt ion as not at all fair . Similar ly 55 per cent
found it unfair t hat audio r ecor dings should
be made so t hey cant be copied. This in-
cluded 41 per cent who consider ed t he ap-
pr oach not at all fair (see t able C11-8).
The suggest ion of compensat ing copyr ight
holder s for losses due t o home t aping t hr ough
new fees on pr oduct s also met wit h disap-
pr oval fr om a major it y of t he r espondent s.
Fift y-seven per cent consider ed it unfair t hat
a fee should be char ged on audio r ecor der s
and paid t o copyr ight holder s t o compensat e
..
Ch a pt er 6Th e OTA S u r vey q 165
t hem for home t aping. Once again, 42 per -
cent consider ed t his appr oach as not at all fair
(see t able C11-8).
The suggest ion t ha t a fee should be
char ged on blank audiot apes and paid t o
copyr ight holder s t o compensat e t hem for
home t aping also met wit h major it y disap-
pr oval. Near ly 6 in 10 (59 per cent ) of t he sam-
ple of adult s consider ed t his suggest ion un-
fair , wit h 48 per cent consider ing a fee on
blank t apes not at all fair .
The major it y of t he r espondent s t hought it
fair t hat cur r ent home t aping pr act ices
should be left unchanged. The sur vey found
t hat 63 per cent of t he nat ional sample of
adult s r at ed t his appr oach as fair , wit h 46 per -
cent r at ing it as per fect ly fair .
It is not ewor t hy t hat none of t he alt er nat ive
appr oaches of limit ing r ecor ding t echnology
or imposing new fees seemed t o have an iden-
t ifiable const it uency among t he public. In
gener al, t aper s, pur chaser s of pr er ecor ded
pr oduct s, and nont aper s seemed t o feel t hat it
was fair t o leave cur r ent home t aping pr ac-
t ices unchanged (see t able C11-9).
Ch a p t er 7
Econ omi c P er sp ect i ves on
Home Cop yi n g
CONTENTS
Page
INTRODUCTION q * * * * a * * * * * . . . * * . * * * * * . . . . . . . . . . . . . . . . . . . . . . . . . . 169
STAKEHOLDER STUDIES q ***m O*** ..*. *.m**** *.*e. *.m. **. *.*. **. m 170
Point s of Cont ent ion q 8*, **. *.. . a **********.*.....*..,...**..**. 172
LITERATURE ON HOME COPYING q . * * . . * . * . * * * . . . . . . ., * * ***.,..*. 176
The Effect of Pr ivat e Copying on Welfar e q * * * . * * * . m . . * . * * m * . . * * * * * * 176
Appr opr iabilit y and Pr icing q . **. 00*******. . ***. *. . . ******. . ****. 178
Pr ice Discr iminat ion, Resour ce Allocat ion, and Var iet y. . . . . . . . . . . . . . . 179
ANALYZING THE ECONOMIC EFFECTS OF HOME COPYING . . . . . . . . 180
Home Copying and It s Economic Effect s q 0 **9.**...**..*..***,**** 180
Home Copying and t he Demand for Or iginals . . . . . . . . . . . . . . . . . . . . . . 184
Consumer Welfar e and Audio Home-Copying Rest r ict ions . . . . . . . . . . . . 191
Fi gu r es
Figure
Page
7-1. Over view of t he Audio For mat Decisionmaking Pr ocess . . . . . . . . . . . . 193
Table
7-1.
7-2.
7-3.
7-4.
7-5.
7-6.
7-7.
7-8.
7-9.
T a bl es
Page
Var iable Descr ipt ion and St at ist ics q **. . *. *. ***. . . . **. *. . . . *. . *. . 188
Tobit Est imat es of Or iginal Pur chases . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
Thr ee-St age Least Squar es Est imat es of Or iginal Pur chases. . . . . . . . . 189
Tobit Est imat es of Taping Behavior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
Thr ee-St age Least Squar es Est imat es of Taping Behavior . . . . . . . . . . . 190
Sample Summar y St at ist ics ... ... .b b . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Mult inominal Logit Est imat ion Result s for Individuals Not
Having a CD Player in Home or Car q . ***m*. . *. *. . . ****. ***. . *. . 197
Mult inominal Logit Est imat ion Result s for Individuals Having
a CD Player in Home or Car .**** .*** ***. . . * 9 * * * * * * * * * *.**.*.., 197
Choice-Pr obabilit y Elast icit y Est imat es for Individuals Not
Having a CD Player in Home or Car ... **. m . . . . . . . . . . . . . . . . . . . . . 199
7-10. Choic-Pr obabilit y Elast icit y Est imat es for Individuals Having
a CD Player in Home or Car . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
7-11. Hypot het ical Changes Absent Home Music Taping (All Sour ces) -
Shor t Ter m Only q 9*** *0** *b*** ***9* **.099 **..9**,*.*..,*.*.* 202
7-12. Hypot het ical Changes Absent Home Music Taping Fr om
Pr er ecor ded Sour ces - Shor t Ter m Only . . . . . . . . . . . . . . . . . . . . . . . . . 204
Ch a p t er 7
Econ omi c P er sp ect i ves on Home Cop yi n g
I NTRODUCTI ON
Economic ha r m-t he effect of t he use
upon t he pot ent ial mar ket for or value of t he
copyr ight ed wor k is one of four cr it er ia
consider ed by t he cour t s in det er mining
whet her a use is a fair use) and not a copy-
r ight infr ingement .
1
Consequent ly, much of
t he debat e on home copying of audio and
video mat er ials has focused on economic
analyses suppor t ing or r ebut t ing copyr ight
owner s
)
claims of economic har ms. Because
home copying is a pr ivat e use, applying t he
fair -use defense may be pr emat ur e.
2
Some,
never t heless, do believe t hat t he doct r ine of
fair use, as t he safet y valve of t he copyr ight
law, is able t o deal wit h home copying and
ot her pr ivat e uses.
3
New t echnologies and new pr ivat e uses con-
vey benefit s as well as har ms t o var ious classes
of r ight holder s and user s. These affect socie-
t ys economic welfar e. Choosing an appr opr i-
a t e ba la n ce of har ms a n d benefit s i s a polit i-
cal decision, n ot a t echnical on e, in which t h e
public h a s a st a k e.
Defining t he legal st at us of pr ivat e uses
(like home copying) will involve weighing t he
effect s on st akeholder s of possible measur es
t o r est r ict pr ivat e uses against t he conse-
quences of not r est r ict ing t hem. Nar r owly de-
fining t he legal st at us of a par t icular kind of
home use (e.g., ma king digit a l copies of
pr er ecor ded music) would not r esolve par allel
issues for ot her t echnologies and indust r ies.
This chapt er explor es t he economic impli-
cat ions of home audiot aping and home copy-
ing in gener al. To do t his, OTA commissioned
Michael Kat z, William J ohnson, and Fr ed
Manner ing t o conduct t hr ee independent eco-
nomic analyses and analyzed sever al ot her
st udies per for med by indust r y gr oups and pr i-
vat e individuals.
All t h r ee of t h e economic analyses done for
OTA illust r at e a common t heme: I n con si d er -
ing whet her or h ow t o adapt t h e la w or
t echnology t o a d d r ess home copying, i t i s a s
impor t ant t o ident ify t h e ambiguous c on s e -
quences of a n y pr oposed ch a n ge a s i t i s t o
quant ify t h e mor e cer t a i n on es. Kat z develops
a t heor et ical fr amewor k for analyzing t he eco-
nomic effect s of home copying, and shows how
t he possible effect s on var ious st akeholder s
depend cr it ically on t he under lying assump-
t ions about supply and demand. J ohnson de-
velops a t heor et ical fr amewor k for analyzing
t he effect s of home copying on t he pr oducer s
of or iginal r ecor dings and uses t he OTA sur -
vey dat a t o examine some fact or s t hat influ-
ence copying and pur chasing behavior s. Man-
ner ing develops a model of consumer s choice
bet ween pur chasing and t aping music and
uses t he OTA sur vey dat a t o est imat e t he
value consumer s place on homemade t apes.
Manner ings est imat e of consumer s valu-
at ion of homemade t apes is used t o est imat e
t he hypot het ical economic effect s on consum-
er s and societ y fr om eliminat ing home t aping.
Tit le 17, U.S. Code, Sect ions 107 ( 1)-(4).
2* ~h. 3, ~d ~W: us, con~e~s, Offlce of TWhno]om Assessment , lnt ellec~al bper ~ Rights in an Age of Electronics andlnfor-
rnation, OTA-CIT-302 (Melbour ne, FL: Kr eiger Publishing CO., April 19~), PP. 193-198. The 19~ OTA r epor t concluded t hat new
infor mat iondissemi nat ion and r epr oduct ion t echnologies pose a number of legal challenges. One, t he pr oblem of pr ivat e use,
st er ns fr om gr owing home access t o copyr ight ed elect r onic infor mat ion, coupled wit h inexpensive copying and t r ansmission. The legal
pr oblem ar ises because t hese t echnological changes r aise t he quest ion of how far copyr ight pr opr iet or s r ight s should ext end over
pr ivat e uses, and t he copyr ight legislat ion pr ovides meager guidance.
a~]e~ hwm is st i]] r e]evmt t . t h
e
de~t e, I
n
consider ing whet her copyr ight proprietors exc]usive r ight s should ext end over
pr ivat e uses, Congr ess might wish t o t ake t he economic consequences of pr ivat e uses int o account .
169
While a ban on home t aping is ext r eme, t his
scenar io allows t he effect s of home t aping on
r ecor ding-indust r y r evenues t o be est imat ed
in a manner compar able t o ear lier r ecor ding-
indust r y st udies, along wit h effect s on blank-
t ape r evenues, consumer benefit s, and socie-
t ys economic welfar e.
The effect s of pr ivat e use, including home
copying, on t he efficient allocat ion of r e-
sour ces and societ ys economic welfar e ar e
complex and ambiguous. Even for one specific
t ype of copying-home a udiot a pingusing
sur vey dat a t o est imat e it s effect s on indust r y
r evenues or consumer benefit s involves many
assumpt ions and appr oximat ions. Choosing
among assumpt ions about under lying fact or s
is a subject ive pr ocess. Some of t he most cr u-
cial fact or s ar e ver y difficult t o measur e and
sever a l a lt er na t ive a ssumpt ions ma y be
equally plausible for example, t he ext ent t o
which consumer s would incr ease pur chases of
r ecor ded music, absent home t aping. Thus,
t he same sur vey dat a can suppor t dispar at e
est imat es, and t his t ype of uncer t aint y is un-
likely t o be r educed by mor e dat a.
STAKEHOLDER STUDI ES
By 1986, indust r y st akeholder s-bot h indi-
vidual fir ms and indust r y associat ions had
sponsor ed almost a dozen sur veys and st ud-
ies, usually t o suppor t or oppose passage of
h ome-copyin g legis la t ion .
4
Most wer e in-
t ended t o show t he alleged har m or losses t hat
t he sponsor s incur r ed as a r esult of home
copying.
5
In t he 1986 st udy, OTA not ed dis-
cr epancies among t hese analyses, each of
which used differ ent met hodologies, a nd
which oft en focused on a specific pr oduct or
mar ket . Mor e impor t ant , OTA not ed:
...[A] consider at ion of t he beneficial effect s of
new t echnological uses t o eit her new or exist -
ing mar ket s for int ellect ual pr oper t y is oft en
absent fr om such est imat es. Alt hough t he
videocasset t e r ecor der [for example] may give
r ise t o copying, it also per mit s t he exploit at ion
of mar ket s t hat would ot her wise not exist .
Bot h fact or s must be t aken int o account in
consider ing har m. The policy maker is t her e-
for e st ill left wit h a decision over who will
benefit fr om new t echnological uses, and for
what r easons.
6
Sever al of t hese analyses of alleged har m t o
t he r ecor ding indust r y due t o home t aping
wer e pr esent ed and debat ed dur ing hear ings
on copyr ight and home t aping in t he 97t h,
7
98t h,
8
and 99t h
9
Congr esses. At each hear ing,
Alan Gr eenspan pr esent ed t he r esult s of t he
most r ecent analysis done for t he r ecor ding in-
dust r y by his fir m, Townsend & Gr eenspan.
In t he 1985 analysis, sponsor ed by RIAA,
4
See table & 1 in ch. 6 of this report and OTA-CIT-302, op. cit., footnote 2, pp. 201-203, for summar ies of t hese.
sTher e has t =n subs~nt la] di=Weement as t o whet her har m should be used t o det er mine r ight s, and wher e t he bur den of pr ~f
should lie.
OTA-CIT-302, op. cit ., foot not e 2, p. 201.
7Copyr ight Infr ingement s (Audio and Video Recor der s), Hear ings befor e t he Commit t ee on t he J udiciar y, U. S. Senat e, 97t h
Cong,, 1st and 2nd sess., on S. 1758 (A Bill t o Amend Tit le 17 of t he U.S. Code t o Exempt t he Pr ivat e Noncommer cial Recor ding of
Copyr ight ed Wor ks on Video Recor der s Fr om Copyr ight Infr ingement ), Nov. 30, 1981 and Apr . 21, 1982, pp. 917-971.
avida and Audio Home Taping, HeMing befor e t he Subcommit t ee on Pat ent s, Copyr ight s, and Tr ademar ks of t he Commit t ee on
t he J udiciq, U. S. Senat e, 98t h Cong., 2nd sess., onS.31 (A Bill t o Amend Tit le 17 of t he IJ .S. Code Wit h Respect t o Home Recor ding
and Video and Audio Recor ding Devices and Media, and for Ot her Pur poses) and S. 175 (A Bill t o Amend Tit le 17 of t he U.S. Code t o
Exempt t he Pr ivat e Noncommer cial Recor ding of Copyr ight ed Wor ks on Video Recor der s fr om Copyr ight Infr ingement ), Oct . 25,
1!)83, pp. 107-244.
Home Audio Recor ding Act , Hear ings befor e t he Commit t ee on t he J udiciar y, U. S. Senat e, and it s Subcommit t ee on Pat ent s,
Copyr ight s, and Tr ademar ks, 99t h Cong., 1st and 2nd sess., Hear ings on S. 1739 (A Bill t o Amend Tit le 17 of t he U.S. Code Wit h R.E+
spect t o Home Audio Recor ding and Audio Recor ding Devices and Media, and for Ot her Pur poses), Oct . 30, 1985, Mar . 25 and Aug. 4,
1986, pp. 146-176.
Chapter 7Economic Perspectives on Home Copying. 17]
Gr eenspan est imat ed t hat in 1984, each in-
st ance of home t aping cost t he t aper $1.67 per
album-equivalent , compar ed wit h an aver age
r et ail pr ice of $6.80.10 On t he basis of an ear -
lier r epor t on home t aping by t he fir m Audit s
& Sur veys, Townsend& Gr eenspan est imat ed
t hat 42 per cent of all home t apings fr om
pr er ecor ded mat er ial and 40 per cent of off-
t he-air (br oadcast ) t apings would have gener -
at ed sales, if t aping had not been possible.11
Then, assuming t hat 40 per cent of home t ap-
ing in 1984 was in lieu of pur chases of r ecor ds
or pr er ecor ded casset t es, t he fir m est imat ed
1984 r et ail losses of some $1.5 billion. This fig-
ur e included $200 million in losses due t o r e-
cor d pr ices being depr essed 5 per cent below
what t hey would have been, absent t aping.
12
Gr eenspan est imat ed t hat about 40 per cent of
t hese r et ail losses (about $600 million) r epr e-
sent ed compensable losses t o copyr ight own-
er s and cr eat or s; t his pr opor t ion was based on
est imat ed lost r evenues (net of manufact ur -
ing and dist r ibut ion cost s) using a hypot het i-
cal indust r y income st at ement . Mor eover , as
in his ear lier t est imonies, he st at ed t hat con-
t inued home t aping had gr ave implicat ions
for t he viabilit y of t he r ecor ding indust r y.
Not ing t hat r ecor ding-indust r y r eleases wer e
down by almost half since 1979, and t hat in-
dust r y employment had declined fr om 29,000
in t he lat e 1970s t o less t han 19)000 in 1984,
Gr eenspan st at ed t hat fur t her gr owt h in
home t aping would cause fur t her decline in
t hese indust r y indicat or s. He concluded t hat
t he indust r y it self could not successfully r e-
spond t o home t aping wit h a pr icing st r at egy.
Raising pr ices t o r ecoup losses would r educe
sales and might incr ease home t aping, and
lower ing pr ices t o make t aping less at t r act ive
would cut pr ofit s fur t her and decr ease t he in-
dust r ys capabilit ies t o t ake t he r isks r equir ed
by t he nat ur e of t he business.
13
Gr eenspans t wo ear lier st udies had est i-
ma t ed losses t o t he r ecor ding indust r y
amount ing t o $1.05 billion for 1981 and $1.4
billion for 1982. The Consumer Elect r onics
Gr oup of t he Elect r onic Indust r ies Associa-
t ion (EIA), t he Audio Recor ding Right s Coali-
t ion, and t he Home Recor ding Right s Coali-
t ion (HRRC) submit t ed dissent ing comment s
and t est imony disput ing t hese est imat es. In
t he fir st inst ance, EIA ar gued t hat t aping est i-
mat es based on hypot het ical quest ions and r e-
call wer e unr eliable and exagger at ed t he
amount of t aping act ually done. Fur t her -
mor e, EIA claimed t hat t he analysis
IOIn t his Ca]cu]at ion, a b]~k t ape was assumed t o hold 1.875 album-equivalent s.
11 Home Taping in Amer ica 1983: Ext ent and Impact , Audit s& Sur veys (New Yor k, NY: Oct ober 1983). The r epor t was based on
diar ies of t aping act ivit y over a l-mont h per iod fr om a sample of act ive t aper s, as well as per sonal int er views and an in-home audit , of
all t apes in t he r espondent s homes.
Ear lier est imat es of t aping and displaced sales had been based on a consumer mail sur vey sponsor ed by War ner Cor n municat ions,
Inc. (WCI): M. Fishbein, S. Middlest adt , and M. Kapp, AConsumer Sur vey: Home Taping, WCI (Mar ch 1982), m r epor t ed in 1981
Est imat e of Less Due t o Taping: Taper s Repor t s of Replacement (Execut ive Summar y ), (Los Angeles, CA. WCI, Apr il 1982).
12Gr WnsPn c~cu]at ~ t hat t he aver a~ ~nll~ pr ice incr ea~ of all goods and ser vices in t he consumer pr ice index wtiS6.7 ~rcent
fr om 1978-1984, while aver age pr ices of pr er ecor ded t a~s r ose only 2.2 per cent . Accor ding t o Gr eenspan, Had aver age pr er ecor ded
t ape pr ices par alleled t he gener al r ise in consumer pr ices in 1984, t hey would have been 29 per cent higher t han t hey in fact t ur ned out
t o be.
In gener al, failur e of r et ail pr ices t o mat ch incr eases in t he consumer pr ice index does not always mean a decline in pr ofit mar gins.
Also, macr oeconomic condit ions (such as t he r ecession dur ing 1979-1981) can have a differ ent effect on demand for ent er t ainment
(e.g., r ecor ds and bpes) t han on ot her it ems in t he pr ice index (e.g., food).
Gr eenspan also concluded t hat t he r ecor ding indust r ys r ecover y since t he ear ly 1980s did not indicat e t hat t he t aping pr oblem
had eased; r at her , his analysis indicat ed t hat t aping had r educed pr et ax pr ofit s, even dur ing t he r ecover y. Gr een span est imat ed t hat
t he pr oposed home-t aping levy in S. 1739 would yield some $200 million per year . See Hear ings on S, 1739, op. cit ., foot not e 9, pp.
154-156,
13Hew1nm on s, 17~~, op. cit ., fOOt nf)t e 9, pp. 155-56.
for RIAA had ignor ed t he st imulat ive effect s
of home t aping on sales of r ecor dings, and
t hat some home t apes (e.g., select ion t apes
and t apes made for por t able or car t ape play-
er s) ar e not subst it ut es for pr er ecor ded pr od-
uct s.
14
In t he second inst ance, Gr eenspans es-
t imat e of har m was r ebut t ed by a panel
r epr esent ing HRRC and t he Audio Recor ding
Right s Coalit ion. The panel ar gued t hat t he
Audit s & Sur veys dat a used by Townsend &
Gr eenspan wer e flawed and over st at ed t he po-
t ent ial for sales displacement , and t hat t he
analysis ignor ed t he st imulat ive effect s of t ap-
ing on sales and ot her benefit s.
15
HRRC and EIA cont ended t hat t he new
Townsend & Gr eenspan analysis of alleged
har m for 1984 was subject t o t he same flaws
as t he ear lier ones. They did not , however , of-
fer any new empir ical est imat es.
Poi n t s of Con t en t i on
A pat t er n emer ges in t hese debat es. The
published r ecor ding indust r y ar gument s and
economic analyses deal only wit h est imat es of
alleged har ms t o t he r ecor ding indust r y and
copyr ight pr opr iet or s t hat ar ise fr om subst i-
t u t i n g h ome copyi n g for pu r ch a s es of
pr er ecor ded music. These alleged har ms in-
clude lost sales, depr essed pr ices, lower pr ofit
mar gins, and, ult imat ely, a decline in t he
number and diver sit y of new r ecor dings being
r eleased. Sur vey dat a and models ar e used t o
est imat e t he ext ent of copying and t he num-
ber of displaced sales. Repr esent at ives of t he
har dwar e and blank-t ape indust r ies t hen dis-
put e t he r esult s on met hodological gr ounds.
Alt hough r epr esent at ives of t he har dwar e
and blank-t ape indust r ies ar gue t hat t he r e-
cor ding indust r ys figur es ar e inflat ed, t hey
have not published t heir own est imat es of
eit her economic har m or t angible/int angible
benefit s fr om home copying. Inst ead, t hey
cont end t hat when t he effect s on t he r ecor ding
indust r y and on consumer s ar e consider ed t o-
get her , t her e ar e net economic benefit s t o so-
ciet y. They ar gue t hat economic analyses used
for policymaking must examine t he cost s and
benefit s t o t he var ious st akeholder s.
16
Their
ar gument s pr opose sever al hypot heses about
social (and r ecor ding indust r y) benefit s fr om
home t aping. Because t hese hypot heses ar e
not quant ified, t hey cannot be compar ed wit h
t he r ecor ding indust r ys est imat es of eco-
nomic har m.
As an example of t hese lines of ar gument ,
one r emedy pr oposed by t he r ecor ding indus-
t r y, songwr it er s, and music publisher s is a
sur char ge on t he pr ice of a blank audiot ape.
17
The r at ionale for t his hinges on t he assump-
t ions t hat :
. home t aping is a
pur chase,
. most blank t apes
dir ect substitute for a
sold t o consumer s ar e
used t o copy copyr ight ed mat er ial, and
t her efor e
lt He~inW on S. 1758, op. cit ., foot not e 7, pp. 956-970.
19He~ings on s.s 1 ~ds. 175, Op. cit., foot not e 8, pp. 340-467. The Audit s & Sur veys st udy for RI/3A concluded that he-ming home
t apes was an almost negligible fact or in decisions t o pur chase (Audit s & Sur veys, op. cit ., foot not e 11, pp. 14-15).
IWit ed examples include, for example, economic har m t o t he r ecor ding indust r y fr om lost sales a n d benefit s t o t he r ecor ding indus-
t r y fr om t echnological innovat ions in har dwar e t hat open new mar ket s, benefit s t o consumer s fr om a wider set of choices and lower -
cost access t o music, et c. (Hear ings on S. 1785, op. cit ., foot not e 7; Hear ings on S.31 and S. 175, op. cit ., foot not e 8.)
17A Joint s~t.ement of t he Music Publisher s Associat ion, Inc., Recor ding Indust r y Associat ion of Amer i% Inc., t md songwr it er s
Guild of Amer ica Re: S. 1739, The Home Audio Recor ding Act , t est imony befor e t he Subcommit t ee on Pat ent s, Copyr ight s, and
Tr ademar ks of t he Senat e Commit t ee on t he J udiciar y, Oct . 30, 1985, pp. 49-62.
Chapter 7Economic Per spect i ves on Hom e Copyi n g q 173
. t he sur char ge would fair ly compensat e
copyr ight holder s for lost r oyalt ies.
18
In ar guing t he fair ness of blank-t ape sur -
char ges, pr oponent s claim t hat most consum-
er s t ape t o save money and t hat t hey would
have pur chased a r ecor ding if t hey wer e un-
able t o copy.
In opposing such pr oposals, HRRC and EIA
cont end t hat home t aping does not compet e
dir ect ly in t he mar ket for pr er ecor ded mu-
sic.
19
They ar gue t hat consumer s do not r e-
gar d homemade t apes as per fect subst it ut es
for pr er ecor ded pr oduct s: t apes can be r eused,
so home t apes may not be per manent addi-
t ions t o a consumer s music libr ar y. In addi-
t ion, t hey cont end t hat consumer s t aping
pr act ices ar e such t hat t he cont ent of home
t apes differ s fr om what is commer cially avail-
able and t hat consumer s oft en t ape mat er ial
t hat t hey would not have pur chased. They
also cont end t hat home t aping can st imulat e
demand for pr er ecor ded pr oduct s. Asser t ing
t hat it is not pr ohibit ed under cur r ent law,
t hey point out t hat home t aping offer s signifi-
cant int angible benefit s t o consumer s by di-
ver sifying t he choices available t o t hem via
select ion-t aping, as well as t he set t ings and
for ms in which t hey can enjoy music via
pla ce-shift ing. Select ion-t aping is mak-
ing a t ape wit h select ions fr om one or mor e
differ ent ar t ist s or albums; place-shift ing is
making a t ape of an owned r ecor ding t o play in
a car or por t able t ape deck. HRRC and EIA
suggest t hat consumer s base t heir decision t o
pur chase some r ecor dings on t he expect at ion
t hat t hey can be copied for t hese pur poses and
t hat consumer s ar e unlikely t o pur chase cop-
ies of t he same r ecor ding on differ ent media
(e.g., a CD or r ecor d for home use and a t ape
for t he car ). RIAA, on t he ot her hand, dis-
agr ees wit h t hese ar gument s. It views home-
t aping pr act ices such as place-shift ing as
violat ions of copyr ight or , at best , of uncer t ain
legal st at us, but cer t ainly not condoned under
t he cur r ent law.
20
One ar ea of cont inuing disagr eement is
whet her only t he effect s of home t aping (or a
t aping ban) on r ecor ding-indust r y r evenues
should be consider ed for policy for mulat ion,
or whet her effect s on blank-t ape r evenues and
consumer s economic welfar e should also be
consider ed. A cor ollar y t o t his disagr eement is
whet her alleged lost revenues or lost profits
and royalties should be used in consider ing
ha r m.
Viewing home t aping as a violat ion of cur -
r ent copyr ight law, RIAA believes t he abso-
lut e pr ot ect ion of copyr ight ed music and r e-
cor dings t o be t he only r eleva nt issue.
Ther efor e, RIAA ma int a ins t ha t policy-
maker s should only t ake int o account t he ef-
fect on r ecor d indust r y r evenues, r eflect ed in
I a~me Vwimts of this Uwment involve tape qualit ies and likelihoods of t aping copyr ight ed mat er ial% given t ape t ype.
For a discussion of t he r elat ive mer it s of blank t ape and/or r ecor ding equipment fees and cr it er ia for det er mining t hem, see: Timo-
t hy J . Br ennan, An Economic Look at Taxing Home Audio Taping, J ournal ofB madca.sting & Electrvnlc Mediay vol. 32, Wint er 1988,
pp. 89-103.
~ gIn lg82, t he Audio hor ding Rights Cm]ition sponsored a t elephone sur vey of audio t aper s, int ended t o explor e t he t ast es and
pr act ices of t aper s (including t he st imulat ive effect of home t aping on pur chases), but not t o est imat e t he absolut e amount of home
t aping in t he Unit ed St at es: Why Amer icans Tape: A Sur vey of Home Taping in t he Unit ed St at es, Yankelovich, Skelly, and Whit e,
Inc., Sept ember 1982. Yankelovich, Skelly, and Whit e r epor t ed t he following r esult s: (1) mor e t han half of all home audiot apingdoes
not involve pr er ecor ded music; (2) home t aping st imulat es pur chases of pr er ecor ded music; (3) home t aper s t ape pr imar ily t o put
t oget her t heir own pr ogr am of select ions; (4) t aper s also seek por t abilit y, convenience, qualit y, and availabilit y t hr ough home t aping,
(5) sat ing money is not t he pr imar y mot ive behind home music t aping and (6) half of all home t apes of pr er ecor ded music ar e made
fr om t he t aper s own r ecor d or t apes.
mH. ~sen, Recor ding Indust W Associat ion ofher ica, Inc., let t er t o J . Winst on, OTA, May 2, 1989 (enclosur e ~t h comment s on
dr afl ch. 8, p. 2).
174 q Copyright and Hom e Copyi n g: Tech n ol ogy Ch a l l en ges t h e La w
sales displacement .
21
Advocat es of home r e-
cor ding such as HRRC and EIA consider t hat
home t aping is legit imat e under t he cur r ent
law. Fur t her mor e, t hey hold t hat st udies of
t he effect of t aping on t he r ecor ding indust r y
should consider only t he effect s on indust r y
pr ofit s and r oyalt y payment s t o per for ming
ar t ist s and cr eat or s of wor ks, r at her t han
gr oss r evenues t o r ecor ding companies. They
ar gue t hat t he for mer incent ives det er mine
t he long-t er m supply of new wor ks.
22
The differ ence in r elat ive magnit udes (gr oss
r evenues ver sus pr ofit s and r oyalt ies) is sub-
st ant ial. Gr eenspan est imat ed t hat 40 per cent
of alleged lost r evenues r epr esent ed compen-
sable losses t o copyr ight owner s and cr eat or s
(including t he r ecor ding companies). Consid-
er ing t he r ecor ding indust r ys r ule-of-t humb
t hat r oyalt y payment s t o t he per for ming ar t -
ist s and copyr ight owner s amount t o about 20
per cent of t he wholesale pr ice of a r ecor ding
(see ch. 4), t he 40-per cent -of-r evenues figur e
for pr ofit s and r oyalt ies seems high.
Some of t he major unr esolved quest ions
fr om pr evious sur veys and analyses st em
fr om t heir under lying assumpt ions, as well as
fr om t he sur vey designs. For example, t he
RIAA sur veys examined h omemad e t apes,
while t he HRRC sur vey examined home-tap-
ing incidents (Tapings), so t he r esult s ar e
not compar able. One impor t ant line of ar gu-
ment has concer ned t he efficacy of pr oposed
levies in fur t her ing t he int ent of copyr ight by
pr oviding incent ives for t he cr eat ion and dis-
seminat ion of new wor ks. Ot her differ ences
have been met hodological, concer ning t he
const r uct ion of:
. Measur es of t he amount of blank media
of var ious qualit ies pur chased by con-
sumer s, and est imat es of t he pr opor t ion
used for home t aping of copyr ight ed ma-
t er ial (as opposed t o ot her uses such as in
answer ing machines or t o t ape a babys
fir st wor ds).
Measur es of mot ivat ions for home t ap-
ing, int ended t o t est hypot heses as t o
whet her home t apes displace or st imu-
lat e pur chases.
Measur es of t he amount of home t aping
being done and of t aping pat t er ns (e.g.,
select ion-t aping ver sus album t aping,
t aping owned ver sus bor r owed r ecor d-
ings, et c.).
Measur es of t he ext ent t o which t aping
st imulat es pur chases, or of est imat ed
lost sales r evenues fr om t aping displac-
ing pur chases.
OTA con clu d es t h a t t h e st u d i es by t h e RI AA
a n d EI A/HRRC a r e i n su ffi ci en t a s a ba si s for
p oli cy ma k i n g, for t h e followi n g r ea son s:
q
The met hodologies and dat a for t he sur -
veys t hat wer e used as t he basis for t he
st udies wer e not published in t heir en-
t ir et y, including det ails of t he sur vey de-
sign and r esponse r at es, complet e ques-
t ionnair es, and disaggr egat e r esponses
t o all t he quest ions asked. Ther efor e, in-
dependent r eplicat ion of r esult s and/or
alt er nat ive analyses by disint er est ed
par t ies ar e not possible. Because t he
st udies wer e sponsor ed by t hose wit h a
financial int er est in t heir out come, ques-
t ions of bias in t heir design, execut ion, or
r epor t ing ar ise; t he inabilit y t o inde-
pendent ly r eplicat e r esult s leaves t hese
quest ions open.
21H. ~=n, &o~ingInduStv ~wiation of ~erica, Inc., ]etter to OTA,May 2, 1989 (enc]osure with comment son dr af?, ch. 8, pp.
1-2).
22GW J Shapiro, ~~~s. &hw~z, Steven R. Brenner, Home Recor ding Right s Coalit ion, memor andum t o OTA wit h comment s
on economic issues, May 1, 1989, pp. 7-10.
.
.
Ch a pt er 7Econ om i c Per spect i ves on Hom e Copyi n g .175
q
q
q
q
The sur vey dat a obt ained for RIAA and
HRRC ar e based on differ ent unit s of
analysis (t apes and t apings, r espec-
t ively), in par t because t he analyses
based on t hese dat a wer e int ended t o ex-
plor e differ ent mechanisms (e.g., sales
displacement ver sus st imulat ive effect s).
Ther efor e, even if t he RIAA and HRRC
st udies ar e equally valid, it is not possi-
ble t o r econcile t heir dispar at e findings.
The st udies do not explor e t he effect s on
net economic welfar e of home copying,
or of pr oposed policies t o r est r ict or
eliminat e it . Given t hat t he cur r ent legal
st at us of home copying is ambiguous, it
is appr opr iat e and r easonable t o exam-
ine t he effect s on consumer s, as well as
on indust r y.
The focus on act ive t aper s, as opposed t o
t he gener al populat ion, does not per mit
analysis for t he populat ion at lar ge. By
sur veying only act ive t aper s, t he st udies
do not fully consider consumer s mot iva-
t ions for t aping ver sus pur chasingin
par t icular , why some consumer s do not
t ape, and whet her t aper s and nont aper s
have differ ent per cept ions of t he accept -
abilit y or fair ness of home-t aping pr ac-
t ices.
23
While t he r ecor ding indust r ys economic
analyses of har m pr oject incr eases in
sales absent home copying, t he est imat es
of lost sales r evenues do not t ake int o ac-
count t he effect of pr ice changes on t he
number of r ecor dings pur chased. The es-
t imat es assume t hat sales volume would
incr ease subst ant ially absent home t ap-
ing.
24
But Gr eenspans analysis and t est i-
mony also indicat ed t hat pr ices would be
higher , absent copying. If consumer s
bought fewer r ecor dings in r esponse t o
t hese pr ice incr eases t hen using t he or igi-
nal est imat e of incr eased sales volume in
conjunct ion wit h higher pr ices over -
st at es for egone r evenues. Also, t he RIAA
est imat es ar e of lost r evenues, not lost
pr ofit s, and t he published analyses do
not pr ovide sufficient dat a t o allow an in-
dependent est imat e of pr ofit s.
The OTA sur vey and economic analyses
wer e designed t o r emedy t he fir st four of t hese
point s. OTA chose a populat ion-based sample
for t wo r easons: i) so t hat , wher e appr opr iat e,
t he r esult s would be applicable t o t he popula-
t ion at lar ge, and ii) so t hat nont aper s, as well
as t aper s, would have t he oppor t unit y t o ex-
pr ess t heir views. Including bot h t aper s and
nont aper s is especially impor t ant in or der for
t he OTA sur vey t o shed new light on public
per cept ions about t he fair ness of home-copy-
ing pr act ices and alt er nat ive policies.
25
The is-
sue of sample design, however , was one of t he
most hot ly cont est ed aspect s of t he OTA sur -
veys development . Bot h RIAAs and HRRCs
view, shar ed by some of t he ot her out side r e-
viewer s, was t hat t he sample should consist of
act ive t aper s only, t o get a lar ger number of
obser vat ions of t aping, given t he st udys lim-
it ed r esour ces. OTAs view, shar ed by some
ot her out side r eviewer s, was t hat t his advan-
t age would be out weighed by t he disadvan-
t ages of not being able t o pr oject r esult s t o t he
gener al public and, mor e impor t ant for a
st udy for Congr ess, of ignor ing t he opinions of
per haps half t he public.
Zqhe OTA ~mp]e design was chosen t o allow projection of sample r esult s t o t he populat ion at kr ge. TO ~0 SO, it is necessary to know
each r espondent s pr esumed pr obabilit y of select ion (for example, based on Census pr ofiles); for a sample of t aper s only, t his would be
unknown. Ther efor e, t he OTA sample consist ed of r andomly select ed member s of t he public, including bot h t aper s and nont aper s.
24w heminw on S. 1739, op. cit., f~t not e 9, pp. 152-154 for det ails of the ]% estimates.
250TA had commlssion~ a phone Suwey on the Pub]ics fami]i~it y wit h and accept~ce of int e]]~t ua] pr oper t y r ight s, per cep-
t ions of a pr oblem, and views on solut ions, for t he 1986 r epor t . See public Per cept ions of t he Int ellect ual Pr oper t y Right s Issue,
The Policy Planning Gr oup, Yankelovich, Skelly, and Whit e, Inc., Febr uar y 1985.
As for t he last point , t he OTA and cont r ac-
t or analyses also assume t hat pr ices r emain
const ant in t he shor t t er m.
26
But even when
pr ices ar e held const ant , t he use of alleged lost
r evenues (as opposed t o pr ofit s and r oyalt ies)
is cont ent ious, as was ment ioned above. One
way t o addr ess t his in a compr ehensive analy-
sis of t he economic effect s of home copying
would be t o compar e cur r ent sales volumes,
var iet y, cost s, and pr ices wit h t hose wher e
copying had been eliminat ed or r est r ict ed sev-
er al year s ear lier . Even if such a compar ison
wer e possible, t he analysis would r equir e in-
dust r y dat a over t hose year s on bot h cost s
t hat var ied wit h pr oduct ion volume and t hose
t hat did not ,
27
along wit h dat a on r et ail t r ans-
act ions.
28
Even t hen, it would be vir t ually im-
possible t o est ablish accur at ely t he r elat ion-
ships bet ween possible financial incent ives
and t he supply of new cr eat ive wor ks, or t o es-
t imat e t he benefit t o societ y fr om t he addi-
t ional invest ment in cr eat ive wor ks (see t he
sect ion below on pr ivat e copying and social
welfar e). Absent t hese indust r y dat a, bot h t he
OTA and cont r act or analyses had t o focus on
changes in indust r y r evenues and could not es-
t imat e t he changes in t he demand for r ecor d-
ings as a r esult of changes in pr ices or t he im-
pact on t he long-t er m supply of cr eat ive
wor ks. Alt hough t he r esult s of our analyses
r eflect t h e r ela t i ve ma gn i t u d es of i n d u st r y-
r even u e, con su mer , a n d n et econ omi c welfa r e
effect s, t h ey a r e on ly ben ch ma r k s for con si d -
er i n g p oli cy op t i on s.
LI TERATURE ON HOME
COP YI NG
Sever al r ecent paper s, pr ompt ed in par t by
t he debat es over home audio- and videot ap-
ing, have examined t he economics of home
copying.
29
Because economic effect s of copy-
ing ar e complex and oft en ambiguous, t hese
analyses usually r ely on simplifying assump-
t ions or specific condit ions t o r educe ambigu-
it y. Ther efor e, t he r esult s must be int er pr et ed
in light of t hese assumpt ions and condit ions.
Th e Ef f ect of Pr i va t e Copyi n g
on Wel f a r e
Int ellect ual pr oper t y is an example of t he
pr ivat e pr oduct ion of a public good.
30
For in-
t ellect ual pr oper t y, or dinar y mar ket for ces
will not necessar ily pr oduce t he most desir -
able social out comes. Gr ant ing a limit ed mo-
nopoly via copyr ight at t empt s t o balance dis-
t or t ions ar ising fr om t he par t ial inabilit y of
~W t he discussion of Manner ings analysis below.
270TA rewest~ ~st md Vwiety dam from the r ecor ding indust r y, but was only able t o obtain the general, rule-f-thumb informa-
t ion pr esent ed inch. 4. Nat ur ally, t he fir ms hold t his infor mat ion closely. (OTA st dlint er views wit h r ecor ding-indust r y and RI&l
execut ives, MayJ une 1988. )
za~b]ished r e~] s~t ist ics fr om t he Nat ion~ Associat ion of Recor ding Mer chandiser s (NARM) do not include this information.
R.JJW indust r y dat a r epor t shipment s valued at suggest ed list pr ice; r et ailer s t ypically discount fr om list pr ice. It is possible t o con-
st r uct appr oximat ions over a ser ies of year s using discount ing r ules; however , indust r y pr oduct ion cost dat a for a number of year s
would st ill be r equir ed.
z% ~W: OTA-CIT.302, Op. cit., fmtnote 2, es~id]y ch. 6; and an OTA cont r act or r epor t pr epar ed for t he 1986 assessment , Eo
nomic Issues Relat ing t o New Technologies and Int ellect ual Pr oper t y, St anley M. Besen, cont r act or r epor t pr epar ed for OTA by t he
Rand Cor p., Dec. 1984 (Spr inglie]d, VA: Nat ional Technical Infor mat ion Ser vice, 1986).
~For a dinssion of pub]ic @s, see The New Palgmue: A Dictiona~ of Economics, John Eatwell, et d., editors (The Stockton
Pr ess, NY: 1987), pp. 1061-1066. A public good isonet hat is nonexclusive: once it is pr oduced, it isimpossible (or pr ohibit ively cost ly)
t o exclude any individual fr om benefit ing fr om it , whet her or not he pays. Individuals have an incent ive not t o pay for t he good, or t o
under value it , in hopes of get t ing access as fr ee r ider s. This r esult s in inelllcient r esour ce allocat ion and under pr oduct ion of nonex-
clusive goods, and under lies t he r at ionale for public suppor t of act ivit ies like nat ional defense and scient ific r esear ch.
. .
cr eat or s t o exclude all nonpayer s fr om obt ain-
ing t heir wor ks.
31
Wit hout pr ot ect ion of copy-
r ight , t he inabilit y of cr eat or s t o fully appr o-
pr iat e r et ur ns fr om int ellect ual pr oper t y
would r esult in t he under pr oduct ion of new
wor ks.
In t he long r un, t he effect of unlimit ed copy-
ing on societ ys economic welfar e is ambigu-
ous. It depends on a number of fact or s, includ-
ing t he degr ee t o which copying affect s t he
demand for or iginals, t he degr ee t o which
copying affect s t he pr oduct ion of new wor ks,
and t he degr ee t o which consumer s value ad-
dit ional var iet y.
32
The net social welfar e effect of copying has
t wo component s: t he effect on pr oducer s and
t he effect on consumer s. Changing t he
amount of pr ivat e copying (eit her incr easing
or r est r ict ing it ) will affect not only t he net
level of societ ys economic welfar e, but also
t he r elat ive balance bet ween pr oducer and
consumer welfar es. This balance bet ween
gains and losses for pr oducer s and consumer s
is oft en t he most visible and most hot ly con-
t est ed feat ur e of pr oposed policies for r edis-
t r ibut ing t he benefit s fr om home t aping. The
specific effect s of pr ivat e copying on t he eco-
nomic welfar e of pr oducer s and consumer s
depends on sever al fact or s:
q
c
q
q
q
q
Whet her pr ivat e copying cost s (including
copier s value of t ime) ar e lower or
higher t han pr oducer s pr oduct ion and
dist r ibut ion cost s (i.e., whet her pr ivat e
copying is economically efficient or inef-
ficient ).
Whet her pr oducer s incr ease t he pr ice of
or iginals t o r eflect t he value of copies
made fr om t hem, or whet her pr oducer s
r educe pr ices in an at t empt t o discour -
age copying.
Whet her pr oducer s cha r ge differ ent
pr ices for t he same good, at least t o copi-
er s and noncopier s.
To what ext ent copying is a subst it ut e
for a pur chase.
How consumer s var y in t heir copying
cost s and t ast es.
Whet her t he addit ional var iet y of or igi-
na ls offer ed a bsent pr iva t e copying
wou l d be exces s i ve i n econ omi c
t er ms.
33
Does incr eased copyr ight pr ot ect ion for
goods like musical r ecor dings and soft war e in-
cr ease or decr ease societ ys economic welfar e?
Some claim t hat impr ovement s in copyr ight
pr ot ect ion will:
31 ~ ~ote~ that ~onexc]usivity n~ not tie the hands of policy m~ers. For ex~p]e, in some other count r ies wher e it was not
deemed possible or desir able t o pr event home t aping, a r oyalt y syst em was inst it ut ed wit h t he int ent of (at least par t ially) compensat -
ing for nonexclusivit y. (H. Rosen, Recor ding Indust r y Associat ion of Amer ica, Inc., let t er t o OTA, May 2, 1989, enclosur e wit h com-
ment s on dr afl ch. 8, pp. 12. )
32%, Wi]]im R, Johnmn, The Economics of copying, Journal of politi~l E~nomy, W)]. 93, No. 11, l%?), pp. 158- 174. J ohnson
examines t wo models for copying t o help explain why some consumer s copy while ot her s do not . The fir st model assumes t hat t he cost
of copying var ies accor ding t o individuals values of t ime. The second model assumes t hat lar ge fr eed cost s must be incur r ed (e.g.,
pur chase of r ecor ding equipment ) t o copy, but copying is subsequent ly cost less. J ohnson concluded t hat , for bot h models, copying
r edist r ibut es income away fr om copyr ight pr opr iet or s, alt hough t he effect s of copying on t he pr ices of or iginals and on social welfar e
ar e ambiguous.
33* Sm]ey M. Besen,
Pr ivat e Copying, Repr oduct ion Cost s, and t he Supply of Int ellect ual Pr oper t y, Information Economics
and PoLicy, vol. 2, 1986, pp. 5-22. For example, Besen not es t hat copying will incr ease consumer welfar e a n d pr oducer pr ofit s in t he
shor t r un, if pr ivat e copying is eflicient and the pr ice of originals can be raised to reflect t he value of t he copies. On t he ot her hand,
copying may cause pr oducer s t o r educe pr ices; t his decr eases bot h consumer s and pr oducer s welfar e. If, however , copying (by r educ-
ing t he number of or iginals pr oduced) r educes excessive var iet y, t his can incr ease welfar e in t he long r un.
The r ecor ding indust r y consider s t hat consumer s of it s pr oduct have always valued addit ional var iet y and t hat , excessive var iet y, if
it exist s, is an issue of business st r at egy for individual r ecor d companies, not a social welfar e pr oblem. (H. Rosen, Recor ding Indust ~
Associat ion of Amer ica, Inc., let t er t o OTA, May 2, 1989, enclosur e wit h comment s on dr aft ch. 8, p. 3.)
q
q
decr ease t he loss t o societ y fr om t he u n -
d er pr od u ct i on of wor ks-t he loss in qual-
it y and var iet y of goods pr oduced when
some consumer s can use t hem wit hout
paying, and
incr ease t he loss t o societ y fr om u n d er -
u t i l i z a t i on of t hese wor ks t he loss due t o
consumer s who would be willing t o buy
t he good at a lower pr ice
34
but do not con-
sume it at t he given pr ice, plus t he loss
due t o consumer s who spend mor e r eal
r esour ces copying t han t he pr oducer
would t o make an addit ional unit of t he
good.
Novos and Waldman consider a case in which
consumer s differ only in t er ms of t heir cost s
of obt aining a r epr oduct ion (not in t heir valu-
at ions of t he good), and in which pr ivat e copy-
ing is economically inefficient . In t his in-
st ance, incr eased copy-r ight pr ot ect ion could
lead t o a decr ease in t he social loss fr om un-
der ut ilizat ion, pr ovided t hat all individuals
cont inue t o consume t he good.
35
Mor e gener ally, Novos and Waldman find
t hat policies t o incr ease copyr ight pr ot ect ion
face a t r ade-off bet ween losses due t o under -
pr oduct ion a nd t o under ut iliza t ion. New
copying t echnologies have t ended t o incr ease
t he for mer and t o decr ease t he lat t er . If copy-
ing is inefficient , however , an impr ovement in
copyr ight pr ot ect ion does not necessar ily in-
cr ease t he under ut ilizat ion loss. Also, if im-
pr oved pr ot ect ion r educes t he demand for
or iginals, t his might incr ease t he under -
pr oduct ion loss.
Over all, t hen, t he implicat ions of incr easing
copyr ight pr ot ect ion ar e complex, and t he
policy t r ade-offs ar e not simple. In some
cases, mar ket out comes (wher e differ ent
classes of consumer s ar e char ged differ ent
pr ices of a good, such as jour nals, or wher e
copyable and noncopyable goods, such as
comput er s and soft war e, ar e bundled) may be
pr efer able t o incr eased gover nment enfor ce-
ment .
36
In choosing bet ween gover nment and
indust r y act ions t o pr ohibit copying, Novos
and Waldman conclude t hat t he gover nment
should act when it s cost of doing so is lower
t han t he pr oducer s cost of alt er ing t he pr od-
uct .
37
Appr opr i a bi l i t y a n d Pr i ci n g
Pr ivat e copying need not be har mful t o pr o-
ducer s, if copying is efficient and if pr oducer s
can incr ease pr ices t o t ake int o account t he
value of t he copies t hat will be made.
38
If not
all consumer s copy, or if consumer s var y in
t he number of copies each makes fr om an
or iginal, t hen efficient pr icing would r equir e
discr iminat ing among t hese gr oups, char ging
t hem differ ent pr ices accor ding t o t heir valu-
at ions of t he or iginals, based on t heir abilit y
t o make copies. This t ype of pr ice discr imina-
t ion is usually infeasible, however , because it
is cost ly and difficult t o gat her t he necessar y
infor mat ion on user s valuat ions of or igi-
nals.
39
34More ~Fi~c~]y, who Wou]d IE Wl]]ing to pay t he mar ginal cost of producing an additional unit of the good.
351m E. Novos and Michae] Wddman, The Effect s of Incr eased Copyr ight Pr ot ect ion: An Analyt ic Appr oach, J OUnal of poli~l
Econ om y, vol. 92, No. 2, Apr il 19S4, pp. 236-246.
*W ~W *sen ( lgs4), op. cit ., footnote 29, Pp. 13-23.
371m E. Novos ~d Michae] w~dmm, lhe Emer~nce of copying Techno]o@es: what five we bmrrwd?co~k?~po~~ poli~
Issues, vol. 5, J uly 1967, pp. 34-43.
aagee ~sen ( 1986), op. cit ., foot not e 33, p. 7.
~he inabilit y t o pr act ice per fect pr ice discr iminat ion among user s can pr oduce imper fect ions in mar ket s for int ellect ual pr oper t y.
Chapter 7Economic Perspectives on Home Copying q 179
A simplified for m of pr ice discr iminat ion is
t wo-t ier ed pr icing, in which pr oducer s ar e
able t o segment t heir cust omer s int o t wo
classes and maximize pr ofit s by char ging each
a differ ent pr ice.
40
Looking at t he effect of
phot ocopying on t he number of scholar ly
jour nals pur chased, Liebowit z has examined
jour nal publisher s abilit y t o indir ect ly appr o-
pr iat e copier s t r ue valuat ion of or iginals
t hr ough higher subscr ipt ion pr ices t o libr ar -
ies and inst it ut ions. He concluded t hat pub-
lisher s can indir ect ly appr opr iat e r evenues
fr om copier s who do not dir ect ly pur chase
jour nals. Since copying may have differ ent ef-
fect s on ot her media, however , case-by-case
empir ical invest igat ion of t he inst it ut ions and
mar ket s involved may be necessar y.
41
Pr i ce Di scr i m i n a t i on , R esou r ce
Al l oca t i on , a n d Va r i et y
The inabilit y t o char ge differ ent classes of
consumer s differ ent pr ices for a good in int el-
lect ual-pr oper t y mar ket s means t hat t he
pr ices consumer s pay need not r eflect t heir ac-
t ual valuat ions of t he good: some value t he
good mor e, and will be willing t o pay mor e.
Those who do not value t he good at a given
pr ice will not consume it . If t hey could be of-
fer ed a lower pr ice r eflect ing t heir valuat ion,
however , t hen t hey would pur chase it and
bot h pr oducer s and consumer s would be bet -
t er off. Mor eover , t he decoupling of pr ices and
valuat ions makes r esour ce allocat ion deci-
sions about what t o pr oduce mor e difficult
and mar ket s less efficient .
42
Besens analysis for t he 1986 OTA r epor t
not ed t hat wher e t her e ar e many pr oducer s of
compet ing t ypes of int ellect ual pr oper t y, t he
r esult ing mar ket st r uct ur e is one of monopo-
list ic compet it ion: fir ms will have some con-
t r ol over t he pr ices t hey can char ge because
t heir pr oduct s ar e differ ent iat ed (e.g., music
by differ ent r ecor ding ar t ist s or gr oups).
When fir ms ar e unable t o char ge differ ent
consumer s differ ent pr ices, however , t her e
may be eit her excessive or insufficient var i-
et y.
43
Under t hese condit ions, when pr ivat e
copying ser ves t o r educe t he var iet y of pr od-
uct s being offer ed, it does not necessar ily r e-
duce t he efficiency of supply or make consum-
er s wor se off.
44
4%ee Walt er Y. Oi, A Disneyland Dilemma: Tw*Par t Tar iffs for a Mickey-Mouse Monopoly, Quar t er ly J oumai of Economacs,
Febr uar y 1971, pp. 77-94. Oi descr ibes how Disneylands (t hen-) pr evailing plicy of charging separate admissions and ride prices
could be opt imal for a pr ofit -maximizing monopolist . This was possible because cust omer s var ied in t heir t ast es and could be divided
int o t wo gr oups, based on t heir valuat ions of going on a lar ge number of r ides.
41 S. J, Lie~witz, copfing and h-direct Appr opr iabilit y: Phot ocopying of J our nals,
J ournal of Political Economy, vol. 93, No. 5,
19s5, pp. 945-957.
4%ke Besen (1984), op. cit ., footnote 29, pp. 1-4. See also St anley M. Besen, Willar d G. Manning, J r ., and Br idger Mit chell, Copyr ight
Liabilit y for Cable Television: Is Compulsor y Licensing t he Solut ion? (Sant a Monica, CA: The Rand Cor p., Febr uar y 1977). The
aut hor s not e t hat congr essionally mandat ed compulsor y licenses for some uses (such as cable r et r ansmission) ar e less efficient t han
r equir ing negot iat ions t hr ough full copyr ight liabilit y. This is because consumer s willingness t o pay for pr ogr ams is per ceived only
indir ect ly by pr ogr am supplier s.
o~er e it is ~sslb]e t o char ge copiers and rloncopiers differ ent pr ices, t he int er est s of t hese gr oups of consumer s could ~ de-cou-
pled (Besen (1984), op. cit ., foot not e 29, p. 19). As a pr act ical and mar ket ing mat t er , however , t his has not yet been t r ied for r ecor ded
music.
ZW ~=n ( 19M), Op. cit., fmtnote 29, pp. 4-5. Ent r y (new fir ms, new pr oduct s) will be pr ofit able when new ent r ant s can at t r act
enough consumer s fr om t he incumbent s t o cover t heir cost s, even if these exceed the value that consumers place on t he addit ional
var iet y. If excessive var iet y is being offer ed and if pr ivat e copyingt hen causes pr oducer s t a decease t he var iet y of pr oduct s offer ed, t he
result may be to increase t he efficiency of supply and make consumer s bet t er off. Conver sely, if fir ms selling at a single pr ice find it
mor e pr ofit able t o duplicat e pr oduct s of t heir r ivals t han t o offer mor e differ ent iat ed pr oduct s, t hen insufficient var iet y will be
offer ed, even wit hout copying.
.. -... .- .
Br ennan not es t hat t he measur e of how well
copyr ight wor ks should be t he cor r espon-
dence bet ween t he values list ener s place on
copyr ight ed wor ks and t he cost s of pr oviding
t hem; t he syst em should give incent ives for
wor ks for which consumer s collect ively would
be willing t o cover t he cost s. He also not es t hat
copyr ight is not int ended t o subsidize wor ks
t hat consumer s would not financially sup-
por t ; if subsidizat ion is socially desir able,
t hen means ot her t han r evenues fr om home-
copying fees should be used.
45
Br ennan also
suggest s t hat policy r egar ding home t aping
should not be dir ect ed t owar d cor r ect ing any
gener al per ceived flaws in copyr ight .@
ANALYZI NG THE ECONOMI C
EF F ECTS OF HOME COP YI NG
The t hr ee economic analyses of home copy-
ing conduct ed for OTA all include a cost -bene-
fit fr amewor k. Two of t hem, by J ohnson and
Manner ing, use t he sur vey dat a t o wor k
wit hin t his fr amewor k t o pr ovide some quan-
t it at ive assessment of t he effect s of home
copying on st akeholder s. Each of t he t hr ee
looks at a differ ent par t of t he home-copying
puzzle: Kat z consider s implicat ions for t he
pr ofit s of pr oducer s and dist r ibut or s of or igi-
nals; J ohnson consider s t he det er minant s of
copying and pur chasing or iginals; and Man-
ner ing uses consumer s pur cha se/t a ping
choices t o examine hypot het ically t he shor t -
t er m effect s of a home-t aping ban on pr oduc-
er s r evenues and consumer s welfar e. None of
t he analyses gives t he complet e pict ur e of t he
economic effect s of home copying; t aken t o-
get her , however , t hey cast doubt on t he pr em-
ise t hat eliminat ing home t aping would be an
unambiguously good move by Gover nment or
indust r y.
Hom e Copyi n g a n d I t s
Econ om i c Ef f ect s
The cont r act or r epor t by Michael Kat z
47
fo-
cuses on t he t heor et ical effect s of home copy-
ing on pr oducer s pr ofit s but does not est i-
mat e t hem. Accor ding t o Kat z, bot h t he
mar ket for r ecor ded music and t he mar ket for
elect r onically r ecor ded visual images fall int o
t he hardware-soft ware paradigm pr odu ct s
ar e int er dependent , pr oduced and sold for use
as component s of har dwar e-soft war e syst ems.
Simplifying somewhat , st akeholder s in t hese
mar ket s fall int o five gener al classes, each af-
fect ed differ ent ly by home copying:
. Con s u m er s : Home copyin g h a s t wo
br oad set s of effect s on consumer s, one
dir ect and one indir ect . The dir ect ef-
fect if t he availabilit y and pr ices of
har dwar e and soft war e ar e fr eed, inde-
pendent of copying-is t o make mor e
choices available t o consumer s. Those
who copy benefit fr om t his effect , t hose
who do not ar e unaffect ed. The indir ect
effect r ecognizes t hat t he collect ive ac-
t ions of home copier s may affect t he sup-
ply of har dwar e and soft war e cont r ar y
t o t he assumpt ion above. One possible
indir ect effect , when copying ser ves t or e-
duce t he var iet y of available soft war e
and incr ease pr ices, would be negat ive.
48
The net effect on an individual consumer
45 Brennm, op. cit., footnote 18, pp. ~-l~.
4133#. Brennm, The &r& Washington Univer sit y, let t er t o J . Winst on, OTA, Apr . 24, 1989 (enclosur e).
4Wlichae1 L. Kat z, Home Copying and It s Economic Effect s: An Appr oach for Analyzing t he Home Copying Sur vey, cont r act or
r epor t pr epar ed for t he Oflke of Technology Assessment , Mar . 9, 1989 (Spr ing!leld, VA: Nat ional Technical Infor mat ion Ser vice,
Oct ober 1989).
48~ot her t hwr et ic~]y ~ssib]e eff~ is ~slt ive, when copying stimulates the SUpp]y of soil.ware (see sect ion be]ow on dema nd
effect s).
is t he sum of t he dir ect and indir ect ef-
fect s. When t he indir ect effect is a r educ-
t ion in var iet y, coupled wit h an incr ease
in pr ices, t he net effect on t he home copi-
er depends on t he balance bet ween t his
loss and t he gain fr om making copies.
Consumer s who do not copy exper ience
t he indir ect effect s and may be hur t
t hr ough t he act ions of ot her s. If, how-
ever , t he indir ect effect is t o cause mor e
and var ied goods t o be pr oduced, t hen
consumer s who do not copy also bene-
fit .
49
S oftware Producers: The economic effect
of home copying on pr oducer s depends
on whet her home copying st imulat es or
da mpens t he dema nd for or igina ls.
Eit her case is t heor et ically possible. For
audio r ecor dings, t he indust r y could be
char act er ized by: 1) a cr eat ion st age in
which t her e ar e a lar ge number of fir ms
pr oducing similar , but not ident ical,
pr oduct s, and 2) r ecor ding, manufact ur -
ing, and wholesale dist r ibut ion st ages
(t ypically per for med by an int egr at ed r e-
cor ding company) in which t he number
of fir ms is small and fir ms ar e awar e of
t he mut ual r elat ionships of sales, pr o-
duct ion, invest ment , and adver t ising
plans. In t he cr eat ion st age, t he r ecor d-
ing company in effect invest s in a lot t er y
by channeling it s r esour ces t o par t icular
songwr it er s and ar t ist s. In such a mar -
ket , t he effect of r educed demand is t o
lower t he expect ed r et ur ns fr om coming
up wit h a winner and t hus, t o lower t he
expect ed r et ur n fr om ent er ing t he indus-
t r y. Ther efor e, if home copying does
lower demand, t hen t her e ar e likely t o be
fewer fir ms in t he cr eat ion st age of t he
indust r y, and fewer new pr oduct s of-
fer ed. In t he long r un, however , t he fir ms
would be expect ed t o ear n a compet it ive
r at e of r et ur n, wit h or wit hout home
copying. Because of t he st r uct ur e of t he
r ecor ding, manufact ur ing, and whole-
sale dist r ibut ion st ages t he effect of
copying on t hem can be ext r emely com-
plex, but lower demand is likely t o de-
cr ease pr ofit s.
50
Retail S oftware Distributors: The effect s
of home copying ar e somewhat similar t o
t hose discussed for t he soft war e pr oduc-
er s cr eat ion st age (above). If copying
st imulat es t he demand for or iginals and
ent r y is easy, t her e should be mor e r et ail
dist r ibut or s and higher employment in
t his sect or ; if it depr esses demand, t hen
t her e should be fewer dist r ibut or s and
lower employment .
51
Ret ail dist r ibut or s int er est s diver ge
fr om t hose of soft war e pr oducer s in
some impor t ant ways. Fir st , dist r ibut or s
may pr ofit fr om being able t o sell or igi-
nals used t o make copies, even if t ot al
sales of or iginals ar e r educed (e.g., if t he
di s t r i bu t or r en t s vi deoca s s et t es or
br oadcast s album sides). Second, if some
dist r ibut or s ar e paid by manufact ur er s
on a unit volume (r at her t han dollar vol-
ume) basis, t heir int er est s may diver ge:
if copying r esult s in fewer or iginals being
sold at higher pr ices, manufact ur er s
may not be significant ly har med, but dis-
t r ibut or s would be if t heir pr ofit s wer e
based on unit sales, r at her t han dollar
volume.
4%ee Kat z (1989), op. cit ., foot not e 47, p. 2.
s% fit z (1989), op. cit ., foot not e 47, PP. 2-4.
slfitz~ ~]a~~ification of I~re~] distributors) inc]udes sever~ ~oups who pro~de the product to t he final consumer e.g., r et ail
r ecor d st or es, video r ent al st or es, r adio st at ions, et c.
q Hard ware Prod u cers an d Di st ri bu t ors:
The effect s of home copying ar e lar gely
t he same for t hese gr oups, which ar e
t r eat ed t oget her her e. The dir ect effect is
t hat t he gr eat er availabilit y of soft war e
(via copying) will make t he har dwar e-
soft war e syst em, hence t he har dwar e,
mor e valuable. If indir ect effect s on t he
supply of soft war e (see above) ar e posi-
t ive, har dwar e pr oducer s and dist r ibu-
t or s will also gain. If, however , indir ect
effect s on soft war e supply lead t o a r e-
duct ion in t he supply of or iginals, t he
value of t he syst ems and it s har dwar e
will be adver sely affect ed. Similar con-
sider at ions ar ise when copying incr eases
t he pr ice of soft war e. This r educes con-
sumer s willingness t o pay for har dwar e
since t he t wo syst em component s ar e
used joint ly.
52
An a lyzi n g P ossi ble Effect s
53
Accor ding t o Kat z, est imat ing t he r elat ive
st r engt hs of t he effect s of home copying on t he
above st akeholder s r educes t o answer ing t wo
fundament al quest ions:
1. What ar e t he lost pr ofit s of pr oducer s
and dist r ibut or s?
2. How is t he supply of soft war e affect ed?
The fir st quest ion cannot be answer ed fully
wit hout ext ensive pr opr iet ar y dat a fr om indi-
vidual fir ms for a number of year s. These
would be needed t o model compet it ion in pr o-
ducer s and dist r ibut or s mar ket s and fir ms
r esponses t o changes in demand and t o calcu-
lat e pr ice-cost mar gins (t o det er mine pr of-
it s).
54
The differ ence bet ween soft war e pr o-
du cer s pr ofit s wit h a n d wit h ou t h ome
copying depends cr it ically on t he nat ur e of
compet it ion in t he indust r y, and how t he
pr ices and quant it ies pr oduced r espond t o
changes in t he demand for or iginals; t he lat t er
is a quest ion t hat pr oducer s t hemselves can
best answer .
Kat z not es t hat pr oducer s cost dat a ar e
needed t o est imat e t he effect s of copying on
pr oducer s profits, r at her t han r evenues. The
r elevant cost is t he t ot al marginal cost t he
ext r a cost of pr oducing an addit ional unit of
t he r ecor d, t ape, or CD, including all levels in
t he pr oduct ion/dist r ibut ion chain. Wit hout
t hese dat a, and pr ice dat a, Kat z concludes
t hat t her e is lit t le t hat can be said about t he
magnit ude of t he economic har m t o pr oduc-
er s, except for loose bounds (like for egone
r evenues under some pr icing assumpt ion, as
in Manner ings analysis).
55
Kat z not es t hat t he
number of copies made is almost cer t ainly
an upper bound on t he decline in t he demand
for or iginals at a given pr ice, but t hat using
t his quant it y t o est imat e for egone r evenue
can yield a ver y loose upper bound on
har m.
56
For t he second quest ion how t he supply of
soft war e is affect ed, one would need t o play
out var ious scenar ios based on t he effect s of
copying on pr oducer s pr ofit s.
5ZC&X fitz (1989), op. cit ., foot not e 47, P. 4-5.
M% Katz ( 1989), op. cit., footnote 47, pp. 5-7.
54Johnson ~d M~n er i n g u se sirnp]iffing assumpt ions t o deal wit h t hese quest ions.
55The ~ di=w=s with this pint, Conslderingthat the revenue effect is the ~ient one. (H. ~sen, Recor ding Indust r y Associa-
t ion of Amer ica, Inc., let t er t o OTA, May 2, 1989, enclosur e wit h comment s on dr t dl chapt er 8, p. 1.)
se% nt z (1989), op. cit ., foot not e 47, pp. 5-7.
In t heir analyses, J ohnson and Manner ingmake simplifying assumpt ions t o par t ially cir cumvent t his dilemma. As t ables 11 and 12
in t his chapt er show, differ ent assumpt ions about t he subst it ut ion of copies for or iginals yield a ver y br oad r ange of r evenue effect s.
Chapter 7Economic Perspectives on Hom e Copyi n g .183
Effect s of Home Cop yi n g on
Dema n d for Or i gi n a ls
57
Katz discusses households decision pr oc-
esses and consumer s t ast es as det er minant s
of t he ext ent of copying, while t aking int o ac-
count t he monet ar y cost s of copying, as well as
t he t ime r equir ed t o make copies or obt ain
or iginals, and t he per ceived qualit y of copies
r elat ive t o or iginals.
Kat z not es t hat , because copies cannot al-
ways be subst it ut ed for or iginals and because
or iginals ar e needed t o gener at e copies, copy-
ing has a ver y complex effect on t he demand
for or iginals: when copying is feasible, or igi-
nals ar e wor t h mor e because t hey can be used
t o gener at e copies. Mor eover , even if copies
could always be subst it ut ed for or iginals, an
incr ease in t he availabilit y of copies might
st imulat e t he demand for or iginals. This
would be count er act ed by effect s t hat would
suppr ess demand, including demand for mul-
t iple unit s of an or iginal.
58
Kat z concludes t hat , t aken t oget her , t hese
effect s pr oduce a t wist in t he demand for
or iginals: consumer s willingness t o pay for
ear ly unit s of an or iginal r ises (t he or iginal can
be used as a sour ce of copies), but demand for
lat er unit s falls (copies ser ve as subst it ut es for
or iginals). This t wist is what makes it so diffi-
cult t o assess t he effect of t he change in de-
mand on pr oducer s pr ofit s differ ent as-
sumpt ions a bou t ma r ket s t r u ct u r e a n d
demand yield dispar at e r esult s, depending in
par t on t he pr oducer s abilit y t o influence
pr ices, t he r elat ive efficiency of home copying
compar ed wit h t he cost of pr oducing or igi-
nals, t he pr oducer s abilit y t o appr opr iat e t he
consumer s full value of or iginals, and t he pr o-
ducer s abilit y t o char ge differ ent pr ices t o dif-
fer ent classes of consumer s (e.g., by discount -
ing mult iple pur chases or bundling for mat s
like CD/casset t e).
59
Kat z also not es t hat in t heor y, at least
copies and or iginals could be used joint ly,
r at her t han as subst it ut es. If so, t hen lower
cost s of copying might be expect ed t o st imu-
lat e sales of or iginals somewhat , by enhancing
consumer s expect ed benefit s fr om pur chas-
ing or iginals. One benefit might be t he fr ee-
sample effect : a copy might be a low-r isk way
t o t r y a new piece of soft war e, and consider a-
t ions like et hics, t he desir e t o get liner not es,
or a desir e for higher qualit y might t hen in-
duce t he consumer t o buy an or iginal. Also,
copies might pr ovide soft war e in an ot her wise
unavailable for m: consumer s could make cus-
t omized or select ion t apes, could t ime-shift
br oadcast mat er ial, or could copy t he mat e-
r ial fr om one for mat t o anot her t o place-shift .
Copying might st imula t e consumer pur -
chases of har dwar e, which in t ur n would in-
cr ease t he demand for or iginal soft war e,
which would lead t o addit ional sales. Finally,
copies might gener at e benefit s r elat ing t o t he
fact t hat consumer s value a har dwar e/soft -
war e syst em mor e, t he mor e popular t hat sys-
t em and compat ible ones ar e. Economist s
r efer t o t hese benefit s as net wor k ext er -
nalit ies."
60
57* fitz ( l~sg), op. cit ., foot not e 47, PP. 7-17
~fit z f lg~g~, op. cit ., footnote 47, P. 9
5% ~tz ( 19B9), op. cit., fmtnote 47, pp. 9-lb, for switic examp]es of how profits With home copfing Cm ~ higher or lower th~
t hose wit hout , ciepending on t he assumpt ions about t he mar ginal cost s of copying and pr oducing or iginals and t he fir ms choice of
pr icing st r at egies.
60A larwr ,I=r ~se can increase the ~mount of in for mat ion avallab]e abut t he system, m~e fr ee samples mor e available, enhance
t he image of a popular pr oduct , et c. See Kat z ( 1989), op. cit ., foot not e 47, pp. 15-17, for mor e discussion.
Hom e Copyi n g a n d t h e Dem a n d
f or Or i gi n a l s
The cont r act or paper by William J ohnson
61
is concer ned wit h t he effect s of home copying
on t he mar ket for or iginals, fr om a posit ive,
r at her t han nor mat ive, per spect ive. Ther e-
for e, J ohnson examines t he effect s of copying
on sales of or iginals, but does not examine
whet her r est r ict ions on home copying ar e
war r ant ed. J ohnson develops a t heor et ical
fr amewor k t o est imat e t he effect s of pr ivat e
copying and uses dat a fr om t he audio por t ion
of t he sur vey done for OTA t o est imat e some
of t he det er minant s of home audiot aping and
of pur chasing or iginal r ecor dings. His r esult s
pr ovide some suppor t for t he not ion t hat an
individuals choice bet ween copying and buy-
ing or iginals is affect ed by t he value of his
t ime higher values of t ime r aise t he number
of pur chases of or iginals and r educe t he ex-
t ent of copying. Alt hough J ohnson at t empt ed
t o use t hese est imat es t o assess t he effect of
copying on t he pur chase of or iginals, he con-
cluded t hat t he pr ecision of his est imat es did
not per mit him t o appr oximat e t he ext ent t o
which copies wer e subst it ut ed for or iginals.
A Si mp le Mod el of P r i va t e Cop yi n g
62
J ohnson bases his model on an individuals
cost -benefit t r ade-off for buying ver sus copy-
ing a par t icular wor k. He assumes t hat copies
and or iginals ar e equivalent in use, t hat bot h
pur chasing and copying of t he same wor k
t akes place, and t hat most individuals engage
in some copying and some pur chasing. The
pr esumed specificat ion of a consumer s valu-
at ion of t he use of a par t icular wor k (in t he
for m of eit her an or iginal or a copy) depends
on par t icular at t r ibut es of t he wor k and on at -
t r ibut es of t he consumer t hat ar e obser vable
(e.g., age) and unobser vable (e.g., t ast es). The
consumer s cost of obt aining a copy of t hat
wor k depends on a fact or t hat is r elat ed t o t he
par t icular wor k and copy, on his value of t ime,
and on unobser vable fact or s t hat ar e specific
t o him but , in gener al, const ant acr oss all
wor ks.
In t his model, a consumer will buy an or igi-
nal of a par t icular wor k if his valuat ion of t he
wor k exceeds it s pr ice and buying is cheaper
t han copying for him. On t he ot her hand, if his
valuat ion exceeds t he cost of copying t he wor k
and t he sale pr ice exceeds t he copying cost , he
will copy r at her t han buy.
63
Ther efor e, t he
pr oducer /seller of a par t icular wor k faces de-
mand t hat will clear ly decr ease as t he pr ice of
t he wor k r ises-consumer s will buy fewer or igi-
nals, make mor e copies, and use or iginals less
int ensively in copying.
A mor e int er est ing quest ion is what t he
model pr edict s about t he demand for or igi-
nals if t he cost of copying shift s. If t he cost of
copying dr ops for all consumer s, t her e may be
lit t le effect on t he demand for or iginals when
t heir pr ices ar e low. For moder at e pr ices of
or iginals, t he effect may be subst ant ial, wit h
many consumer s subst it ut ing t he cheaper
copies for or iginals. At high pr ices for or igi-
nals, t he model suggest s t hat t he effect of
cheaper copies may be t o r aise t he demand for
or iginals, pr imar ily for t heir use as a sour ce of
copies.
elwi]]im R. Johnson, Est i ma t i n g t h e Effect of Copying on t he Demand for Or iginal Cr eat ive Wor ks, Cont r act or r epor t Pr ewed
for t he Office of Technology Assessment , Mar . 3, 1989 (Spr int ileld, VA: Nat ional Technical Infor mat ion ser vice, Odober 1989).
e- J oh n son ( 19s9), op. cit ., footnote 61, PP. 2-9.
M~mem&r that th
e
~op~ngcost includes time costs ~d di~~]ty of access t o or igin~s. In t his r et ie], get t ing t he wor k at t he least
cost i.e., saving money is t he decision cr it er ion because copies and or iginals ar e assumed t o be per fect subst it ut es.
In J ohnsons model, some consumer s buy, ot her s copy, ot her s do neit her . In a given populat ion, t he number who copy will depend on
t he dist r ibut ion of t he component s of consumer s cost s and valuat ions. Ther e maybe addit ional demand for or iginals as sour ces of
copies, but t his will decline as pr ices r ise and consumer s economize in t he use of or iginals. Mor eover , an ext r a copy will t end t o cr eat e a
demand for less t han one addit ional or iginal.
Chapter 7Economic Perspectives on Home Copying .185

If a hypot het ical ban on copying wer e im-
posed, t he demand for or iginals would shift .
In t heor y, at a given pr ice consumer s might
buy eit her mor e or fewer or iginals t han t hey
would have bought wer e copying possible. In
t he face of consumer s r esponses t o a copying
ban, pr oducer s might r aise or lower t heir
pr ices for or iginals. Det er mining t he differ -
ence bet ween pr oducer s sales and r evenues in
copying ver sus no-copying scenar ios t o meas-
ur e t heir losses due t o copying r equir es con-
sider ing t hese t wo effect s. The fir st effect can
be pr edict ed fr om t he r esponse of demand for
or iginals t o t he cost of copying. This allows es-
t imat ion of t he net (posit ive and negat ive) ef-
fect of copying on t he demand for or iginals
when pr ice is held const ant . Because t he pr ice
effect is not included, t his will under st at e
losses due t o copying. Omit t ing t he second ef-
fect always leads t o under st at ing t he loss (or
over st at ing t he gain) copying causes t o pr o-
ducer s of or iginals.
Da t a An a lysi s a n d Est i ma t i on
J ohnson uses dat a fr om obser vat ions of
copying and pur chases t aken at one point in
t ime t o measur e differ ences in individuals
copying cost s. The simple model, descr ibed
above, is ext ended fr om individual decisions
about a single wor k t o consider a lar ge num-
ber of differ ent iat ed wor ks. J ohnson specifies
an individuals expect ed demand for pur -
chases and for copies as funct ions of t he
r anges of pr ices of or iginal wor ks, of his cost s
of copying, and of his valuat ion of wor ks, as
well as of obser vable and unobser vable per -
sonal at t r ibut es.
J ohnson focuses on t he audio por t ion of t he
sur vey dat a, par t icular ly t he sect ions on pur -
chase and owner ship of or iginals and on copy-
ing and st ocks of copies.
Pur chase and Owner ship-J ohnson calcu-
lat ed daily pur chase fr equencies fr om r e-
sponses t o t he most r ecent pur chase
))
se-
quence of quest ions (sur vey quest ions 30-37).
The aver age fr equency for t he whole popula-
t ion seemed t oo high, however : at 0.039 per
day, it would imply a year ly pur chase fr e-
quency of 14 sound r ecor dings per year . In-
dust r y shipment s dat a seem t o cor r espond t o
a much lower r at e per haps 3.5 or 4 sound r e-
cor dings per year per per son over t he age of
10.
64
J ohnson not es t hat t he fr equency est i-
mat ion is ext r emely sensit ive t o t he few obser -
vat ions of ver y r ecent pur chases, so (t elescop-
ing, or r epor t ing a mor e r ecent pur chase
t han was t he case, may have caused a lar ge up-
war d bias; t his could also have occur r ed for es-
t imat es of copying fr equency.
65
J ohnson has t wo ways of addr essing t his
pr oblem. Fir st , he uses alt er nat ive measur es
of pur chase and copying behavior , such as t he
st ock of r ecor dings and t he number pur -
chased in t he last mont h. Second, since a simi-
lar effect seems t o occur for his copying
est imat es, he assumes t hat est imat es of sub-
st it ut ion bet ween copying a nd pur cha ses
would be unaffect ed by equal pr opor t ional bi-
ases in copying and pur chasing behavior s.
To at least par t ially mit igat e t elescoping,
J ohnson const r uct ed a second var iable r epr e-
sent ing t he number of purchases last month;
t he mean value (0.59) implies an annual pur -
chase r at e of about 7, which is smaller t han
t he daily fr equency implies but st ill lar ger
t han nat ional sales figur es. The sur vey dat a
on stocks of r ecor dings do seem in accor d wit h
past sales figur es, however . For example,
J ohnson finds t hat t he per -per son st ock of
CDs (3.8) is t he same or der of magnit ude as
64A Johnson, Op. cit, footnote 61, pp. 9-10. He uses 1986 RL&4 shipments data, based on ZOO million peop]e, aged 10 or older in 19~.
~sThe met hod US.ed by OTA in ch. 6 t o est imat e over all copying and pur chasing is less sensit ive t o t hese effect s. Aggr egat ing Pur -
chasing or copying int o cat egor ies like past week or past mont h r educes sensit ivit y t o individual dat a point s and t o t elescoping,
t her e t he est imat es based on t he last t ime and st ock change in last mont h ar e in closer agr eement .
t ot al accumulat ed sales of CDs in t he Unit ed
St at es. Per -per son st ocks of ot her r ecor dings
wer e 19 45-r pm r ecor ds, 37.5 LP r ecor ds, and
21 pr er ecor ded casset t es.
66
Copying and St ocks of CopiesJ ohnson
also calculat ed daily t aping fr equencies fr om
r esponses t o t he (most r ecent ) br oadcast t ap-
ing and pr er ecor ded t aping sect ions of t he
quest ionna ir e.
67
As befor e, t he est imat es of
t aping fr equencies seemed excessively high
t he mean daily r at e of br oadcast t aping was
0.023 and t he mean daily r at e of t aping fr om
pr er ecor ded mat er ial was 0.036. This would
yield a combined r at e of 0.059 per day, or 21.5
per year r oughly 50 per cent higher t han t he
est imat ed pur chase r at e of sound r ecor dings.
J ohnson not es, however , t hat t hese est imat es
fr om self-r epor t ed dat a ar e not compat ible
wit h indust r y sales figur es for blank t ape, and
seem t o be as inflat ed as t he est imat es of self-
r epor t ed pur chase fr equency.
68
J ohnsons est imat e of t he aver age number
of tapes made in the last month is about 0.58,
for an annual aver age of 7. As was t he case
wit h pur chase behavior , t hese dat a imply
lower r at es t han t he fr equency dat a, but st ill
higher t han aggr egat e sales would indicat e.
J ohnson finds t hat t he est imat e of t he aver age
stock of home copies (fr om r esponses t o ques-
t ion 29) is 13.8 t apes per per son, which is of
t he same r ough magnit ude as past accumu-
lat ed blank-audiocasset t e sales.
69
Of t hese
copied t apes, most (an est imat ed 10.7) wer e
copied by t he cur r ent owner . In over all st ocks
of r ecor dings, t he st ock of copied t apes is
about one-quar t er t he size of t he st ock of LPs,
and about t wo-t hir ds t he size of t he st ock of
pr er ecor ded casset t es. Given t he r at e of copy-
ing and t he size of t he st ock of copied t apes, it
is somewhat sur pr ising t hat in t he last -lis-
t ening sect ion of t he sur vey, only one-t ent h
of t he r espondent s r epor t ed t hat t hey wer e lis-
t ening t o a copied t ape. J ohnson speculat es
t hat t his finding might indicat e t hat people
copy music t hey ar e less int er est ed in and
per haps less likely t o buy which would be
consist ent wit h t he sur vey finding t hat copied
t apes (especially t hose made fr om r ecor ds or
ot her t apes) ar e r egar ded as being of some-
what lower qualit y t han pr er ecor ded cas-
set t es.
70
Time Spent Making a Copy It ems in sur -
vey quest ion 45 ask about t he t ime devot ed t o
making t he last home t ape, and t he amount (if
any) t he copier would have been willing t o pay
someone else t o make t hat t ape. J ohnson
found t hat t he mean copying t ime was slight ly
mor e t han 2 hour s; he consider s t his an upper
bound t o t he t ime cost because all of t his t ime
need not have been lost t o ot her act ivit ies. The
quest ion on willingness t o pay for a copy was
only answer ed by 66 individuals who said t hey
would consider paying someone else t o make
t he t ape for t hem, so t hat t he r esult s, which
show an aver age willingness t o pay of $6.63,
71
may be unr eliable.
6t3Johnmn ( lg8g), op. cit ., fOOtnOte 61) p
10
WA copy of the questionnaire is in appendix B (see quest ions 43 ~d 44).

68The Int er nat ion~ TaP~iW As~iat ion r ePfis ~es of some 387.5 mi]]ion b]~k audiwasset t es in 1987, or about 2 per per son
over t he age of 10. Since t he sur vey dat a indicat ed t hat about 80 per cent of copies ar e made using blank t apes, J ohnson infer s t hat t he
aver age copying fr equency should be ar ound 2.5 per year .
6sA~ut 11 b]mk t ips have ~n So]d ~r ~r mn since 1980 (John~n ( 1989), op. cit., footnote 61, p. 11). Remember t hat a t ipe is
not necessar ily equivalent t o an album.
70Johnson ( lg89), op. cit ., foot not e 61, pp. 11-12. See ch. 6 of t his r epor t for st ~k da~.
TIAt ~ aver aw ~a% of $lo~our , t his would imp]y t hat t he t r ue t ime cost of tiping was x~ of an hour. (J ohnson ( 1989), Op. cit .,
foot not e 61, p. 12)
Chapter 7Economic Perspectives on Home Copying. 187
Emp i r i ca l Est i ma t es of Cop yi n g a n d
P u r ch a si n g Beh a vi or
J ohnson concluded t hat t he best var iables
t o use t o depict cur r ent copying and pur chas-
ing behavior s ar e t he fr equency var iables de-
scr ibed above: despit e t heir appar ent incon-
sist ency wit h aggr egat e indust r y dat a, if t he
degr ee of bias is t he same for ever yone, t hen
est imat es of t he det er minant s of t hat fr e-
quency at one point in t ime will be unbiased,
except for a pr opor t ionalit y fact or .
72
Dependent and Independent Var iables
J ohnsons specificat ion has demands for cop-
ies and or iginals depending on income, r ela-
t ive pr ices, and demogr aphic var iables (used
as sur r ogat es for t ast es).
73
Income effect s ar e
capt ur ed by household income and demo-
gr aphic var iables. Relat ive pr ices ar e mor e
difficult t o capt ur e. Because t he pr ice of or igi-
nals does not var y significant ly in t he cr oss-
sect ion at one point in t ime (as opposed t o
t ime-ser ies dat a over sever al year s), t he pr ice
effect s must focus on copying cost s. For t hese,
sever al measur es ar e possible: t he amount of
t ime r epor t edly t aken up t o make t he copy;
t he willingness t o pay someone else t o make
t he copy; and pr oxies for t he value of t ime, in-
cluding employment st at us and ear nings.
J ohnson found t hat t he per for mance of pr ox-
ies for t he value of t ime in t he est imat es was
mor e in keeping wit h t he pr edict ions of his
model t han t he ot her t wo measur es, which
wer e plagued by smaller number s of r e-
sponses. Table 7-1 pr esent s all t he var iables
used in t he analysis, wit h descr ipt ive st at ist ics
and sample sizes.
Result s of Est ima t ion J oh n son est i-
mat ed
74
measur es of pur chasing and copying,
wit h employment st at us as pr oxy for t he cost
of copying.
75
Tables 7-2 and 7-3 show t he r e-
sult s using t hr ee measur es of or iginal pur -
cha ses (da ily fr equency, pur cha ses la st
mont h, and st ock of pr er ecor ded casset t es)
and employment st at us t o capt ur e t he cost of
copying. Tables 7-4 and 7-5 show est imat ion
r esult s for t he t hr ee measur es of copying be-
havior (daily fr equency, t aping last mont h,
st ock of copied t apes.
These coefficient s in t ables 7-2 t hr ough 7-5
show t he sensit ivit y of t he dependent var i-
ables (daily fr equency, et c.) t o each of t he in-
dependent var iables (employment st at us,
et c.) when cont r olling for var iat ions in t he
ot h er s .
76
For example, employment st at us
and gender (male) bot h have similar posit ive
Tp~t hou@ t he Var lab]es r epr esent ing purchases or copies made in t he last mont h seem t o have t he vir t ue of r educing t he t eleXoP-
ing pr oblem, t hese var iables ar e less r eliable t han t he fr eyuency ones. It is less desir able t o use t he st ock var iables because t hey ar e
much mor e influenced by past , r at her t han cur r ent , behavior (e. g., st ocks of LP r ecor ds do not r eflect cur r ent LP pur chase r at es).
(J ohnson (1989), op. cit ., foot not e 61, pp. 12-13.)
TaBut dir ~t est imat ion of t he subst it ut ion bet ween copies and or iginals is not possible because t he demand for copies is not inde-
pendent of t he demand for or iginals. J ohnson finds t hat copying is posit ively r elat ed t o or iginal demand in t he sense t hat t hose who
copy mor e also buy mor e or iginals. (J ohnson (1989), op. cit ., foot not e 61, p. 13. )
T4Thr ~s~ge ]
ea
st s~~es ~d Tobit est imat or s wer e used. The syst em of equat ions est imat ed wer e appr opr iat e @r ings of pur -
chase and copying var iables (e.g., pur chase fr equency wit h copying fr equency, et c.). For mor e infor mat ion on t hese t echniques, see
Takeshi Amemiya, Advanced Econometrics (Cambr idge, MA: Har var d U. Pr ess, 1985).
75John~n ~W tri~ Usi n gt h e ot h er t wo measur es for t he cost of copying t o help explain pur chasindmpying fr e~encies, but t he.=
est imat es wer e less successful. For pur chasing fr equency, none of t he est imat ed coe~cient s was st at ist ically significant . For t aping
fr equency, only one coefficient in each of t he est imat ions (t he age coefllcient in t he one using copy t ime, and t he gender coefficient in
t he one using willingness t o pay) was significant . J ohnson not es t hat , in par t , t he unsat isfact or y r esult s for t he alt er nat ive measur es of
copy cost may be due t o t he smaller number s of r espondent s for t he t ime-t o-copy and willingness-t o-pay quest ions. Also, var iat ions in
copy t ime may r eflect var iat ions in t he qualit y of t he copy, r at her than in the true cost of acquiring it. See Johnson (1989), op. cit .,
foot not e 61, p. 16.
7SThe fiwres in ~enthe=s we the Cmfflcients t+.~tistics+ ~Pnding on the num~r of coefficients be i n g e s t i ma t e d ~d t h e
number of obser vat ions, an absolut e value oft near 2 (or mor e) gener ally indicat es t hat t he est imat ed coefficient values ar e st at ist i-
cally significant . Not e t hat many of t he coefficients are not st at ist ically significant i.e., t he hypot hesis t hat t heir t r ue value is zer o
cannot be r eject ed at t he 95 per cent confidence level. The sign of a coefficient indicat es whet her it s effect is to incr ease or decr ease t he
likelihood of pur chasing an or iginal, t he st ock of or iginals, et c.
Table 7-1. -Variable Description and Statistics
Variable Description Mean (standard deviation) Valid observations
Daily purchase
frequency
Daily rate of
purchasing recordings
0.039 (0.421)
0.059 (.0265)
20.69 (23.9)
10.99 (20.3)
0.059 (2.5)
1,433
1,140
1,366
1,376
1,501
Daily taping
frequency
Daily rate of taping
Or iginal t ape
st ock
Number of prerecorded
cassettes owned
Stock of copied
tapes
Number of home-recorded
cassettes owned
Purchases last
month
Number of 45s, LPs, CDs
and prerecorded cassettes
bought last month
Taping last
month
Number of audiocassettes
taped last month
0.056 (2.5)
0.563 (0.496)
0.555 (0.497)
1,501
1,501
1,501
Employed = 1 if employed
O if not
High school = 1 if education
12 years or more but
not college graduate
= O if not
College = 1 if college graduate
O if not
0.192 (0.394)
0.155 (0.362)
0.480 (0.500)
39.2 (19.0)
33.3 (23.7)
663 (499)
133 (292)
1,501
1,501
1,501
1,491
1,120
66
393
Nonwhite = 1 if nonwhite
O if not
Male = 1 if male
O if not
Age
Income
Age in years
Annual household
income ($1000)
Copy willing-
ness to pay
Copy time
Willingness to
pay for copy (cents)
Time to make last
copy (minutes)
SOURCE: Johnson, 1989
effect s on t he size of an individuals st ock of
or iginals (see t able 7-2); being male has a st a-
t ist ically significant posit ive effect on daily
t aping fr equency; and age has a significant ,
but smaller , negat ive effect (see t able 7-5).
copying. The ma t hema t ica l specifica t ion
J ohnson uses would allow him t o appr oxi-
mat e t he subst it ut ion of copies for pur chases
of or iginals by t he r at io of t he coefficient on
employment in a pur chasing-behavior equa-
t ion and t he same coefficient in a copying-be-
havior equat ion. But no st at ist ically signifi-
cant r at io can be const r uct ed.
77
The coefficient est imat es in t ables 7-2
t hr ough 7-5 wer e obt ained by using employ-
ment st at us as pr oxy for t he r elat ive cost of
77% J ohnson (1989), op. cit ., fmt not e 61, pp. 8-10, 16-17. Ther e ar e six such r at ios. The numer at or s of four and t he denominat or s of
t he ot her t wo ar e not st at ist ically significant , so one cannot conclude wit h confidence t hat t hey ar e significant ly differ ent fr om zer o.
.
Ch a pt er 7Econ om i c Per spect i ves on Hom e Copyi n g q 189
Table 7-2. -Tobit Estimates of Original Purchases
(asymptotic absolute t-statistics in parentheses)
N = 895
Independent Daily purchase Purchases Original
variable frequency last mont h stock
(1) (2) (3)
Employed . . . . . . . . . . . . . . ., . . . . . -0,017
(.72)
-0.265
(.31)
4,47
(2.08)
797
(2.91)
High school ., ., . . . . . . . . . .
(1.106)
2,17
(1 .85)
College . . . . . . . . . . . . . 0055
(1.41)
2.24
(1.55)
6,60
(1.88)
Nonwhite . -0,031
(.98)
-0,684
(.61)
-426
(1.49)
(2.03)
-0.418
(7,72)
Male . . . . . . . . . ,. 0.030
(1 .38)
2.17
(2.79)
--0.179
(7,34)
A g e , . . -0.0056
(8.91)
0.137
(3 23)
Income . . . . . . . . . . . 0.002
(4.88)
0.012
(78)
NOTE: Sample restricted to persons 16 and older
Table 7-3.Three-Stage Least Squares Estimates of Original Purchases
N=895
Independent Daily purchase Purchases Original
variable frequency Iast month stock
(1) (2) (3)
Employed . . . . . . . . . . . . . . . . . . . . . . . -0.0022
(0.14)
-0.201
(112)
322
(189)
574
(2.69)
4.33
(1.56)
3.64
(160)
0.187
(832)
High school . . . . . . . . . . -0,0013
(0067)
College . . . . . . . . . . . . . . . . . . . . -00021
(0.083)
-0.040
(0,138)
0.074
(0309)
Nonwhite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0,0022
(0104)
Male . . . . . . . . . . . . . . . . . . . . . . . . . . 0.022 0.514 3.64
(3,85) (2,97) (221)
Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0.0024 -0.022 -0227
(2.66) (5.11) (5.42)
Income . . . . . . . . . . . . . . . . . . . . . . . 0.0024 0,002 0.096
(3.85) (055) (280)
SOURCE: Johnson,1989
Table 7-4. -Tobit Estimates of Taping Behavior
(asymptotic absolute t-statistics In parentheses)
N=895
Independent Daily taping Taping Stock of
variable frequency last month copied tapes
(1) (2) (3)
Employed . . . -0.073 0.376 -0.943
(1 ,55) (0.33) (0.38)
High School . . . . . . . . . . . . . . . . . . 0.052 -1.17
(.86) (0.87) (1.52
College . . . . . . . . . . . . . . . . . . . 0,0012 -2.54 7.32
(0.015) (1 ,38) (1 .80)
Nonwhite . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1606 4,51 7.12
(2.84) (383) (2.22)
Male . . . . . . . . . . . . . . . . . . . . . . . 0.173 2.53
(3,96) (2.54) (2.69)
Age ., .......,,,,,..,,,,,,,, ,, . . . . . . -0.016 -0,285 -0.605
(11.5) (7.98) (9.44)
Income . . . . . ., ., . . . . . . . . . . . . 0.002 0.027 0.094
(2.42) (1.36) (1 91)
Table 7-5.-Three-Stage Least Squares Estimates of Taping Behavior
N=895
Independent Daily taping Taping Stock of
variable frequency Iast month copied tapes
(1)
Employed . . . . . . . . . . . . . -0.055
(261)
High School . . . . . . . . . . . 0.015
(059)
College . . . . . . -,024
(0,707)
Nonwhite .,, .,....... . . . 0.037
(1.32)
Male ,,,,,, . . . 0.059
(287)
Age . . . . . . . . . . . . . . -0.0025
(477)
Income . . . . . . . . ., . . . . . . . . . . . 0.0005
(1,17)
(2)
0.112
(0.60)
-0.492
(213)
-0.452
(1.50)
O 523
(2.12)
0.456
(2.56)
-0.026
(5.73)
0.0019
(0.526)
(3)
-1.14
(078)
3.43
(1.89)
4.92
(2,08)
4.56
(2.36)
4.45
(319)
-0.227
(6.36)
0,042
(142)
Ther efor e, J ohnson concludes t hat t he est i-
mat es do not per mit an appr oximat ion of t he
subst it ut ion of copies for pur chases of or igi-
nals. However , J ohnson finds t hat t hey do
shed some light on t he det er minant s of copy-
ing and pur chasing behavior . In par t icular ,
J ohnson concludes t hat :
78
q
q
q
Income r aises t he demand for bot h cop-
ies and pur chases.
79
The value of t ime affect s bot h copying
and pur chases of or iginals; a high value
of t ime induces consumer s t o copy less
and buy mor e.
80
Cont r olling for ot her var iables, copying
is mor e pr evalent among t he young, non-
whit es, and males. Copying is mor e con-
cent r at ed among t he young t han is pur -
chasing.
81
Con su m er Wel f a r e a n d Au d i o
Hom e-Copyi n g R est r i ct i on s
The cont r act or r epor t by Fr ed Manner ing
82
est imat es economet r ic models of consumer s
pur chase/t aping choices and uses t hem as a
basis for det er mining t he change in consumer
welfar e as a consequence of an audio home-
copying ban.
83
Manner ings r epor t pr ovides a
fr amewor k for a cost -benefit analysis of such a
ban. His det ailed analysis of t he economic
consequences of such a ban leads him t o con-
clude t hat , at least for t he shor t t er m, t he
bans cost s t o t he public out weigh it s benefit s
t o t he r ecor ding indust r y, it s wor ker s, and ar t -
ist s.
While t he scena r io of a ba n on home
audiot aping might seem unr ealist ic, it can be
used t o explor e possible differ ences bet ween
t he levels of indust r y r evenues, consumer wel-
far e, and net social welfar e in t he pr esent envi-
r onment (wit h home audiot aping) and in a hy-
pot het ical wor ld wit hout t aping. That is, it
pr ovides a means for est imat ing hypot het ical
shor t -t er m changes in r ecor ding-indust r y r ev-
enues absent home taping, under var ious as-
sumpt ions about t he ext ent t o which t aping
displaces sales of r ecor dings.
84
The pr imar y
cont r ibut ion of Manner ings analysis is t hat it
focuses at t ent ion on consumer s valuat ion of
homemade t apes and t her eby, for the short
term, on t he hypot het ical decr ease in consum-
er s economic welfar e, absent t aping.
85
m~w J ohnmn ( 19~9), op. cit ., foot not e 61, pp. 15-16 ~d 17
7Whe income coefficient s for daily fr eyuency and st ock (but not last -mont h behavior s) ar e posit ive and st at ist ically significant .
8Whe employment coefficient for daily t aping fr equency is negat ive and significant but employment does not r aise daily pur chase
fr equency. The employment coefficient for st ocks of or iginals is posit ive and significant ; it is impr ecisely est imat ed for st ocks of cop-
ies. Ther efor e, it is difllcult t o find a subst it ut ion of copies for or iginals in t he daily fr equency dat a, and t he st ock dat a do not allow a
definit e conclusion concer ning subst it ut ion.
al when ot her t hin= me he]d consmt , males ar e mor e likely t o copy and buy. When ot her t hings ar e held const ant , bing nonwhit e
r aises t he fr eyuency of copying and st ock of copies; t he effect on pur chasing may be negat ive, hut the coefficient s ar e impr ecisely
est imat ed. Age exer t s a ver y st r ong (and st at ist ically significant ) negat ive effect on all var iables, wit h t he effewt s on t aping being lar ger
t han t hose on pur chasing. The size of t he r epor t ed st ock declines r apidly vvit h t he individuals age, par t icular ly for copied t apes.
a2Consumer Welfar e and Audio Home Taping: An Empir ical Assessment , Fr ed L. Manner ing, cont r act or r epor t pr epar ed for t he
Oflice of Technology Assessment , Feb. 13, 1989 (Spr ingfield, VA: Nat ional Technical Infor mat ion Ser vice, Oct ober 1989).
BsFor exmple, t his (~ COU]d be t he r esult of t echnological copy-pr ot ~t ion.
84 These c~cu]ations me Simi]m t. the method that Townsend & Greensp used for t he ~ st udies, except t ha t t hey indica t e
how differ ent int er pr et at ions of t he OTA sur vey dat a can suppor t a r ange of values for t he displacement r at e, and pr oduce a r ange of
hypot het ical r evenue changes, r at her t han a single value.
85 Mmnerinfs ~a]ysis is somewhat a mirror i maw of t h
e
r ecor d i n g i n d u st ws an~yses: instead Of est ima t ing hypot het ica l ]osses
t o t he r ecor ding indust r y due t o home t aping, he est imat es t he hypot het ical gains t o t he indust r y and losses t o consumer s welfar e if
t aping wer e eliminat ed. The welfar e loss t o consumer s is a monet ar y valuat ion of consumer s loss in sat isfact ion, wit hout any loss in
act ual income, t ier a t aping ban, Neit her t he Townsend & Gr eenspan nor t he HRRC analysis r epor t ed any est imat es of consumer s
benefit s fr om home t aping.
Manner ing not es t hat banning home audio
copying has gener ally been pr omot ed on t he
gr ounds t hat consumer s copying signifi-
cant ly r educes t he r ecor ding indust r ys r eve-
nues, jobs, and r oyalt ies. But Manner ing not es
t hat many ot her fact or s must be consider ed in
assessing t he t r ue economic consequences of a
possible ban on home audio copying. Ar gu-
ably, t he most significant of t hese is t hat con-
sumer s will be less well off as a r esult of t he
ban, since it would eliminat e t he choice of an
impor t ant audio for mat home copies. To as-
sess t he magnit ude of t his loss, one would
have t o answer t he following quest ion:
How much would consumer s have t o be com-
pensat ed aft er t he ban t o have t hem as well
off, in t er ms of sat isfact ion, as t hey wer e be-
for e t he ban?
Manner ings st udy focuses on obt aining a
monet ar y measur e of t his hypot het ical com-
pensa t ion by using da t a on consumer s
choices of list ening for mat s fr om t he last -lis-
t ening sect ion of t he sur vey (quest ions 9-28).
In t heir comment s on Manner ings cont r ac-
t or r epor t and on a dr aft ver sion of t his OTA
r epor t , r epr esent at ives of t he r ecor ding indus-
t r y object ed vehement ly t o t his basic ap-
pr oach and t he assumpt ions of t his t ype of
analysis. Accor ding t o RIAA:
...This analysis t ur ns t he home t aping issue
on it s head. It assumes wit hout explanat ion or
document at ion t hat consumer s ar e or might
be ent it led t o some for m of compensat ion
upon a ban of home t aping. We object t o t he
not ion t hat r evenues associat ed wit h t he en-
joyment of copyr ight ed music ar e up for
gr abs and t hat t hey should be dist r ibut ed
away fr om copyr ight holder s in favor of home
t aper s and t he har dwar e indust r y based on a
det ached consumer welfar e analysis.
86
By cont r ast , r epr esent at ives of t he consumer
elect r onics and blank-t ape indust r ies consid-
er ed Manner ings gener al appr oach t he
pr oper one t o t ake. They not ed, however , t hat
because Manner ing est imat ed hypot het ical
lost r ecor ding-indust r y r evenues (t hat HRRC
also consider ed t o be over st at ed), he conse-
quent ly under st at ed societ ys hypot het ical
net loss fr om eliminat ing t aping. Accor ding t o
HRRC:
The paper by Fr ed Manner ing adds an im-
por t ant dimension t o t he evaluat ion of home
t aping by focusing at t ent ion on t he magni-
t ude of welfar e benefit s t o consumer s of t he
home audio t apes t hey make... [but ]...[t ]his
calculat ion understates dead weight loss. Only
t he pr ofit s of t he indust r y and r ent s paid t o
copyr ight holder s [not r evenues] should be
net t ed against consumer welfar e effect s t o cal-
culat e dead weight loss.
87
This differ ence in views r eflect s t he cont inu-
ing and fundament al disagr eement among
st akeholder s as t o t he legal st at us of home
audio copying. Those who int er pr et t he am-
biguous st at e of t he cur r ent law t o mean t hat
home t aping is a violat ion of copyr ight quit e
r easonably view it inappr opr iat e t o consider
lost benefit s t o which t hey cont end consum-
er s wer e never ent it led. Those who int er pr et
t he cur r ent law t o mean t hat home t aping
does not violat e copyr ight will consider t hat
such benefit s should pr oper ly be t aken int o
account in set t ing policy.
Disagr eement s of t his sor t under scor e t he
ambiguit y of t he cur r ent law. Given t hat am-
biguit y, OTA consider s it r easonable t o exam-
ine t he effect s of home copying or a copying
~H. ~=n, W, ]etter to J. Winston, OTA, May 2, 1989 (enclosure with comments on drti ch. 8, P. 4).
WGWJ, Shapiro, ~~.t S. &hw~Z, Steven R. Brenner, ~C, memo to OTA ~th ~mmentson economic issues, May 1, 1989, pp.
17-18.
banon consumer s welfar e, indust r y r eve-
nues, and societ ys economic welfar e. The last
sect ion of t his chapt er will pr esent Manner -
ings calculat ions and ot her examples t o illus-
t r at e t he r ange of possible effect s suppor t ed
by t he sur vey dat a.
An a lysi s
Manner ings empir ical analysis focuses
solely on t he consumer s choice bet ween pur -
chasing an or iginal for mat (r ecor d, casset t e,
CD) and making a t ape at home, on t he basis
of t he for mat t he consumer last chose t o list en
t o.
The Audio For mat Decision-Making Pr oc-
ess
88
Manner ing r elat es t he effect of a home-
t aping ban on consumer welfar e t o each con-
sumer s decision-making pr ocess in choosing
among audio for mat s (r ecor ds, pr er ecor ded
casset t es, copied or made-t apes, or CDS).
This decision-making pr ocess ult imat ely de-
t er mines t he value t hat consumer s place on
having t he made-t ape for mat as an avail-
able choice. The choice of a specific audio for -
mat is t he last of t hr ee complex, int er r elat ed,
and t ime-var iant decision pr ocesses (see fig-
ur e 7-1):
1. Mu s i ca l t y p e p r ef er en ces cl a s s i ca l ,
count r y and west er n, soul, heavy met al,
r ock, et c. These pr efer ences evolve fr om
cult ur al, social, and economic influences,
and play a key r ole in t he choice of audio
equipment and in specific pur chase/t ap-
ing decisions since cer t ain t ypes of music
t end t o benefit mor e fr om use of higher -
qualit y for mat s and audio equipment . In
t ur n, musical-t ype pr efer ences ar e influ-
enced by consumer s exist ing st ocks of
audio equipment .
2. Audio equipment choices CD pla yer ,
car t ape deck, st er eo r ecor d player , et c.
Figure 7-1. - Overview of the Audio Format
Decisionmaking Process
Longer term
decisions
SOURCE: Mannering, 1989
3.
Aside fr om t he effect of musical-t ype
pr efer ences a nd socioeconomic, con-
sumer s expect a t ions a bout t he fr e-
quency and pur pose of equipment use
ar e impor t ant fact or s in t heir choice of
audio equipment .
Purchase/ taping choices fr equency (t he
number of pur chases and/or t apings
made in some t ime per iod) and specific
for mat s (r ecor ds, pr er ecor ded casset t es,
CDs, or made-t apes). This choice differ s
fr om t he ot her t wo, which ar e r eally
much longer -t er m decisions. The pur -
cha se/t a ping choice is shor t -t er m in
nat ur e, and is t he one audio-r elat ed deci-
sion t hat a t aping ban would i mmed i -
ately and most significantly a ffect . Al-
t hough t he longer -t er m choices above
influence t he pur chase/t aping choice,
ot her fact or s like for mat pr ice, availabil-
it y and use of subst it ut e media (e.g., a car
r adio inst ead of a car t ape deck), con-
%3ee Manner ing, op. cit ., foot not e 82, pp. 2-4.
sumer s socioeconomic condit ions and
t ast es, and expect at ions of usage (e.g.,
choosing a CD in ant icipat ion of fr equent
play) also ar e significant .
Gener a l St udy Appr oa ch a nd Limit a -
t ions
89
To compr ehensively model t he int er -
r elat ed long- and shor t -t er m choices det ailed
above would r equir e ext ensive panel dat a on
t he behavior of t he same cr oss-sect ion of con-
sumer s over t ime.
90
Absent such dat a, Man-
ner ing focuses only on t he consumer s short-
term decisions bet ween pur chasing or t aping
audio r ecor dings. He uses a car efully con-
st r uct ed, cr oss-sect ional sur vey of audio-r e-
lat ed behavior t o develop and est imat e mod-
els t o assess how a copying ban would affect
social welfar e. His necessar y focus on consum-
er s shor t -t er m decisions imposes some limi-
t a t ions on subsequent welfa r e comput a -
t ions.
91
The fir st t ypes of limit at ion ar e model limi-
tations. Because t he model does not explicit ly
account for longer -t er m choices, Manner ing
cannot assess t he effect s of an audio home-
copying ban on consumer s choices of audio
equipment and musical-t ype pr efer ences.
92
Fur t her mor e, he cannot est imat e t he changes
in pur chase pr ices of var ious for mat s t hat ar e
likely t o occur aft er such a ban.
93
Thus, his
model must assume t hat consumer s musical
t ype pr efer ences and audio equipment st ocks,
as well as pur chase pr ices, r emain const ant in
t he face of a home-copying ban. The effect of
t his assumpt ion on welfar e est imat es is am-
biguous, pr imar ily because indust r y pr icing
of r ecor dings and audio equipment is not pr e-
dict able. Anot her modeling concer n ar ises
fr om t he int er r elat ionship bet ween t he fr e-
quency of audio pur chase/t aping choices and
t he specific for mat s chosen. This int er r ela-
t ionship r esult s fr om t he fact t hat t he fr e-
quency is, in par t , a funct ion of t he sat isfac-
t ion t he consumer der ives fr om specific
pur chase/t aping for mat choices. Given t his,
fr equency and individual choices should be
modeled joint ly, but t his was not feasible.
Ther efor e, est imat es of changes in welfar e r e-
quir e assumpt ions as t o how t he fr equency of
pur chase/t aping decisions will be affect ed by a
home-copying ban.
94
The second t ypes of limit at ions ar e sur vey
limitations r elat ed t o t he most -r ecent -list en-
ing-exper ience appr oach t aken in t he sur vey.
Consumer s wer e asked t o r ecall t heir most r e-
cent list ening exper ience t o det er mine t he
musical select ion/for mat t hey list ened t o at
t hat t ime, as well as t he lengt h of t ime t hey
had owned t hat specific it em. This cr eat es t wo
concer ns. Fir st , pur chase/t aping decisions
t hat occur r ed many year s ago ar e pr oblem-
at ic consumer s may have had differ ent mu-
sical t ast es and st ocks of audio equipment . To
mit igat e t his, Manner ing uses only pur chase/
t aping decisions made dur ing t he year pr eced-
ing t he sur vey. Second, t he most -r ecent ap-
pr oach is likely t o uncover past pur chase/
t a ping decisions t ha t r esult ed in for ma t
s- Mmnering, op. cit ., f~t not e 82, PP. 4-7
wIde~ly, these data ~ou]d cover a ~rl~ of yews to ensure pr oper specificat ion of t he int er r elat ionships among choices; t hey would
be cost ly t o collect .
91 M~e]ing t h
e
]Onwr -t er m choices of muslc~-t yp pr efer ences ~d audio e~ipment rewires socioeconomic, t ast e, ~d audio in-
vent or y infor mat ion at t he t ime such decisions wer e made, which may have been a number of year s ago.
92wi t h ou t t h e h ome~p i n gop t i on , con su mer s ma y a d ju st t h ei r a u d i o e~ipment st~ks, md perhaps even their musical t ype pr ef-
er ences (e.g., t owar d discount ed t ypes, in an effor t t o hold t heir audio budget s const ant ).
93 Est imat ing such pr ice shins Wou]d r ewir e a m~e] t hat i
n c
]
u
des indust ~ price behavior and consumer purchasing behavior t o
pr edict equilibr ium for mat pr ices afl.er t he ban.
S@ne would ex~ t hat t h
e
~ Wou]d ]Ower t he fr eWency because t he t aping alt er nat ive would be eliminat ed. Since at least some
addit ional pur chases ar e likely t o be made, however , t he net fr equency will appr oach pr e-ban levels.
choices t hat t end t o be mor e heavily used. To
t he ext ent t hat usage and for mat ar e int er r e-
lat ed, some bias w-ill be int r oduced in est imat -
ing t he pur chase/t aping choice model and t he
subsequent changes in welfar e.
95
Su r vey Result s-Of t he 1,501 complet ed
sur vey int er views, 517 r espondent s pr ovided
dat a t hat Manner ing could use in his analysis
since they reported t hey ha d list ened t o r e-
cor ded music t hey had acquir ed in t he past
year . In t able 7-6, Manner ing summar izes t he
st at ist ics of t hese r espondent s, whom he di-
vides int o t wo gr oups t hose having only r e-
cor d and t ape audio equipment (400 r espon-
dent s) and t hose having r ecor d, t ape, and CD
equipment (117 r espondent s). This segment a-
t ion r eflect s significant obser ved differ ences
in pur chase/t aping behavior s.
Table 7-6 begins by pr esent ing, for t he last
list ening exper ience, t he per cent age of r espon-
dent s choosing each of four for mat s: LP,
pr er ecor ded casset t e, made-t ape, and CD.
Manner ings est imat ion r esult s indicat e t hat
pr er ecor ded casset t es ar e t he pr efer r ed for -
mat among non-CD owner s, wher eas CDs ar e
t he pr efer r ed for mat among CD owner s. For
non-CD owner s, t he made-t ape opt ion is t he
least pr efer r ed; for CD owner s, r ecor ds and
made-t ape opt ions ar e least pr efer r ed.
96
Com-
par ing CD and non-CD owner for mat invent o-
r ies (fr om sur vey quest ion 29), Manner ing
finds t hat , on aver age, CD owner s have lar ger
invent or ies of all for mat s; t hey also have sub-
st ant ially higher pur chase fr equencies, as in-
dicat ed by t he r epor t ed number of pur chases
in t he last mont h. This suggest s t hat individu-
als choosing t o own a CD t end t o be mor e ac-
t ive audio consumer s. The socioeconomic
compar ison of t he t wo gr oups offer s few sur -
pr ises: Manner ing finds t hat CD owner s t end
t o be younger and ar e mor e likely t o have full-
t ime employment and higher income t han
t heir count er par t s who do not own CDs.
Econ omet r i c Fr a mewor k a n d Est i ma t i on
Resu lt s
97
Assuming t hat r espondent s select
t he pur chase/t aping for mat opt ion t hat pr o-
vides t he most sat isfact ion, Manner ing used a
mult inominal logit choice model of individu-
als for mat choices.
98
He specified t he for mat
choice as a funct ion of t he for mat choice it self,
t he pr ice of t he for mat , t he consumer s in-
come, his exist ing for mat invent or ies, his
st ock of exist ing audio equipment , and ot her
socioeconomic condit ions (e.g., employment ,
educat ion, et c.).
Manner ings est imat ed model fit t he dat a
well. Tables 7-7 and 7-8 show t he est imat ion
r esult s for t hose who do not own a CD player
and t hose who do, r espect ively. Most wer e st a-
t ist ically significant , as indicat ed by t he t -st a-
t ist ic. Fur t her mor e, Manner ing was able t o
conclude t h a t con su mer s viewed t he
pr er ecor ded casset t e and made-t ape opt ions
as dist inct .
99
g5Th1~ t yp of bias Cou]d & e]lminat~ ha standard econometric pr ocedur es for int er r elat ed discr et e/cont inuous choices. B~lt t hese
could not be used wit hout a mor e ext ensive cr oss-sect ional sample t han t his dat a set cont ains.
While r ecor ds include LPs, EPs, and 45s, Manner ing finds that LPs/EPs are the dominant choice among a major it y of r espon-
dent s. A r elat ively small number of people use 45s, but t hey t end t o be r elat ively fr equent pur chaser s wit h lar ~ invent or ies.
97sW Mmnerlng, op. cit ., foot not e 82, PP. 9-15
~For a de~ripti~n of ]o@t m~e]s, SEW D. McFadden, Economet r ic Models of Pr obabilist ic Choice, in S tructural Analysis of Di.~-
crete Data with Econometric Applications (Cambridge, MA: MIT Press, 1981); and K Train, Quaiitataue Choice Analysis: Theory,
Econometrics, and an Application to Automobile Demand (Cambr idge, MA: MIT Pr ess, 1986).
The met hod is somewhat analogous t o a r egr ession wher e t he dependent var iable i.e., t he for mat choice is discr et e, r at her t han
cont inuous. A par t icular advant ige is t hat t he model can be shown t o be consist ent wit h ut ilit y-maximizing behavior .
99Ma n n er i n g u s~ a sFi fi ca t i on t est ~evelo@by Smd ] ~(] Hsi a o. See Ma n n er i n g ( ]~sg), op. cit., foot not e 82, p. 15; and K_ small
and C. Hsiao, Mult inomial Logit Specificat ion Test s, International Economic Review, vol. 29, No. 3, 1985.
.
Table 7-6.-Sample Summary Statistics (averages unless otherwise noted)
Non-CD CD
owners owners
Percent choosing LP format . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17.0 10.26
Percent choosing prerecorded . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.0 28.21
tape format
Percent choosing made-tape format . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0 10.26
Percent choosing CD format . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51.27
Annual household income (dollars) . . . . . . . . . . . . . . . . . . . . . . . . ........32,140
40,120
LP inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.2 60.5
Prerecorded tape inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.1
34,4
Made-tape inventories . . . . . . . . . . . . . . . . . .
14.7 29.1
CD inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27.6
Percent with car tape deck . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.3 86,3
Percent white/nonwhite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85/15 87/13
percent male/female . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38/62 58/42
Age (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.6 30.5
Education (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.6 12.7
Percent with full-time employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
61
Number of LP, prerecorded tape, . . . . . . . . . . . . . . . . . . . . . . . . . . 0.21 1.57
and CD purchases in the Iast month
Number of household members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.18 3.18
Percent indicating sound quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.5 58.1
is extremely important to listening
SOURCE: Mannering, 1989
For the non-CD gr oup, Manner ing found a
pr efer ence against made-t apes, r elat ive t o t he
r ecor d for mat opt ion; t his could r eflect t he
t ime invest ment r equir ed for made-t apes.
100
For mat pr ice, r elat ive t o household income,
had a highly significant negat ive effect on t he
pr obabilit y of select ing a for mat . The t ot al in-
vent or y of all for mat s was found t o have a sig-
nificant posit ive effect on t he made-t ape for -
mat choice t hat may have r eflect ed t he fact
t hat act ive audioconsumer s t end t o have high
usage r at es of t he made-t ape opt ion. The car
t ape deck indicat or var iable has t he expect ed
sign (posit ive), wit h t hose consumer s having a
car deck being mor e likely t o select t ape for -
mat s (pr er ecor ded casset t e or made-t ape).
101
Finally, t he sound-qualit y indicat or (fr om
sur vey quest ion 14) demonst r at es t hat t hose
consumer s in t he non-CD gr oup who consid-
er ed t hat sound qualit y was ext r emely impor -
t ant wer e less inclined t o select t he pr e-
r ecor ded ca sset t e opt ion. This t ends t o
suppor t t he popular not ion t hat pr er ecor ded
casset t es offer infer ior sound qualit y when
compar ed wit h r ecor ds or even made-t apes r e-
cor ded fr om CDS on high-gr ade audiot ape.
l~he ~on.CDwoup~~ ~]ight r e]at ive pr efer ence for pr er ~or d~ casset t es over r ~or ds was not st ,at ist ic&d]y significant .
IOIIn addit ion, whit es wer e mor e likely t o se]ect @pe opt ions.
Table 7-7.Multlnominal Logit Estimation Results
for Individuals Not Having a CD Player in Home or
Car (t-statistics in parenthesis)
Estimated
coefficient
Cons t a nt f or pr e r e c or de d t a pe s
C o n s t a n t f o r m a d e - t a p e s
F o r m a t p u r c h a s e p r i c e ( i n
dollars) divided by annual
household income (in
thousands of dollars)
Total record and tape ., ., . . . .
inventory, defined for
made-tape option only
Car tape deck indicator .
defined for tape options
(1 if have car tape deck,
O otherwise)
Race indicator defined for ... . . . . . . . .
tape options (1 if
white, O otherwise)
Sound quality indicator . . . . . . . . .
variable defined for
prerecorded tape option
only (1 if sound quality
extremely important,
O otherwise)
0.366
(1.0297)
-2.92
(-5.638)
-2.327
(-3.471)
0.0059
(1.76)
0.7427
(2.59)
0.905
(2.80)
-0.449
- 1.724)
Number of observation . . . . . . . 400
Log-likelihood at zero -439.44
Log-likelihood at -272.37
convergence
SOURCE. Mannering, 1989
Table 7-8. Multinominal Logit Estimation Results
for Individuals Having a CD Player in Home or Car
(t-statistics in parenthesis)
Estimated
coefficient
Constant for prerecorded tapes .
Cons t a nt f or ma de - t a pe s . . . , . ,
C o n s t a n t f o r c o mp a c t d i s c s . ,
F o r m a t p u r c h a s e p r i c e . ,
(in dollars) divided by
annual household income
(in thousands of dollars)
Sound qua l i t y i ndi c a t or . . . . .
variable defined for
prerecorded tape option only
(1 if sound quality extremely
important, O otherwise)
Race i ndi cat or def i ned . , . . . . .
for compact disc option
(1 if white, O otherwise)
C l a s s i c a l m u s i c i n d i c a t o r
defined for compact disc
option only (1 if listen
to classical music, O otherwise)
Full-time employment . . . . . . . .
indicator defined for
made-tape option only
(1 if employed full time,
O otherwise)
13351
(3 28)
-1012
(-1 .37)
O 728
(1 .096)
1618
( 2.00)
-0582
(-1 37)
1211
(1 91)
(
1 166
(1 54)
Number of observations 117
Log-likelihood at zero . 162.20
Log-likelihood at convergence . . . 12929
This r esult is par t icular ly int er est ing because
t he explicit sur vey quest ions about t he per -
ceived qualit y of var ious for mat s (quest ion
15) and qualit y as a mot ivat ion for t aping
(quest ion 45j) did not yield t his r esult for t he
sample populat ion as a whole.
102
I oz~mem~r that Mmnerlng~S SUb~p]e of517 (out of a ~ssib]e 1,501) ~] had list ened t o r ecor ded music t hey had acWir ed in
t he \ ast year .
For the CD group, Manner ings coefficient
est imat es ar e br oadly similar in t er ms of in-
t er pr et at ion t o t hose for t he non-CD gr oup.
For t his gr oup, Manner ing found on aver age a
pr efer ence for pr er ecor ded casset t es t o r e-
cor ds.
103
As wit h t he non-CD gr oup (and, as
expect ed) t he signs of t he pr ice/income var ia-
ble and t he (pr er ecor ded casset t e) sound-
qualit y var iables wer e negat ive. Manner ing
again found t hat r ace was a significant fac-
t or per haps as a pr oxy for ot her envir on-
ment al/t ast e effect s wit h whit es mor e likely
t o choose t he CD for mat , when ot her t hings
wer e held const ant .
Manner ing found t hat t he classical music
indicat or showed t hat individuals who had
chosen classical music (sur vey Q. 17) t ended t o
select t he CD opt ion, appar ent ly t o t ake ad-
vant age of t he CDs super ior sound qualit y.
Finally, he found t hat t he employment indica-
t or suggest ed t hat individuals wit h full-t ime
employment have a pr efer ence for t he made-
t ape opt ion.
104
Fr om t hese est imat ion r esult s, Manner ing
calculat ed how consumer s choices of var ious
for mat s would r espond t o incr eases in pr ices
of t he for mat s r elat ive t o annual income. He
r epor t s t hese choice-pr obabilit y elast icit ies in
t able 7-9 for r espondent s who do not own a CD
player and in t able 7-10 for t hose who do. All
t he elast icit ies have absolut e values of less
t han 1;
105
Manner ing concludes t hat t hese low
elast icit ies most likely r eflect t he habit ual use
of for mat s and t he significance of t he longer -
t er m fact or s of musical-t ype pr efer ence and
audio-equipment st ocks. Int er est ingly, t he
absolut e values of t he choice-pr obabilit y elas-
t icit ies for bot h of t he t ape for mat opt ions
(pr er ecor ded casset t e and made-t ape) ar e
smaller t han for t he LP r ecor ds and CD op-
t ions. This means t hat t he shift in pr efer ences
away fr om one of t he t ape for mat choices
would be smaller t han t he analogous shift
away fr om t he LP or CD opt ion.
106
Consumer Welfar e Effect s of a Home Copy-
i n g Ba n
107
To det er mine t he change in con-
sumer welfar e r esult ing fr om a ban on audio
home copying, Manner ing uses compensat -
i n g vari at i on s" mea sur es of how much
money a consumer would have t o be given af-
t er t he ban, t o be as well off in t er ms of sat is-
fact ion as befor e t he ban.
108
He weight ed t hese
measur es by consumer s r epor t ed pur chase/
t aping fr equencies.
109
This calculat ion yielded
IOcEst imat ed Cmfflclent s indicat ing pr efer ences for CDs r elat ive t o r ecor ds and against made-tipes relative to records were not
statistically significant.
1 ~The cw~clent was not statistically significant at t he 95-per cent level. Manner ing speculat es that it may reflect the practice of
custom taping for use in a car t ape deck dur ing t he wor k commut e.
IOsE]ast lcit y is defined as t he ~r cenhw change in one var iable with respect to a l-percent ch~ge in the other. For ex~ple, the
(non-CD) choice probability elasticity with respect to LP purchase price/household income (table 7-9) implies that a 1 percent rise in
t he pr ice/income r at io will give r oughly a 0.6 per cent decr ease in consumer s pr obabilit y of choosing r ecor ds in a pur chase/t aping
decision (for t he CD gr oup (t able 7-10) t he decr ease would be about 0.4 per cent ).
loefifihermore, for CD Omers, the made.~pe choice was more Ine]astic th~ the prerecorded cassette choice. For non-CD owner s,
t he made-t ape choice was t he mor e elast ic. This cont r ast may r eflect CD owner s opt ion t o make t apes fr om CDs.
107w Manner ing, op. cit ., foot not e 82, pp. 18-23.
1 ~~mem~r t hat t h
e
~ consider s t hat ~ause home ~ping infr inges Copyr ight , no Cor npnsat ion is due. (H. ms.ell, ~, Op .
cit ., foot not e 86. )
lo- Mmner lng, op. Cit ., fmt not e 82, pp. 19.20. For det ails of t he t echnique, see K- Small ~d H. ~sen, Applied Welfar e Econom
-
ics wit h Discr et e Choice Models, Econometric, vol. 49, 1981.
Table 7-9. Choice-Probability Elasticity Estimates
for Individuals Not Having a CD Player in Home or
Car (t-statistics In parenthesis)
Elasticity with
respect to: Elasticity
LP purchase price (in dollars) . . . -0,592
divided by annual household
income (in thousands of dollars)
P r e r e c o r d e d t a p e p u r c h a s e . , -0,214
price (in dollars) divided by
Made-tape purchase price . . . . . . . . . . -0.312
Total record and tape inventory, . . 0.346
defined for made-tape
option only
SOURCE Mannering, 1989
Table 7-10.Choice-Probabiiity Elasticity
Estimates for individuals Having a CD Player in
Home or Car (t-statistics in parenthesis)
Elasticity with
respect to: Elasticity
L P p u r c h a s e p r i c e ( i n d o l l a r s ) 0.385
income (in thousands of dollars)
Prerecorded tape purchase . . . . . . . . -0.332
price (in dollars) divided by
Made-tape purchase price . . . . . . . . . . . . . . . -0.221
CD purchase price (in dollars) . . . . . . . . . . . . . . -0.416
income (in thousands of
dollars)
a fr equency-weight ed aver age compensat ing
var iat ion of $1.62 imposing a ban would r e-
sult in a consumer -welfar e loss of $1.62 for
each pur chase/t aping decision. This est imat e
assumes t hat t he t ot al number of pur chase/
t aping decisions r emains t he same aft er t he
made-t ape opt ion is eliminat ed, and t hat t he
ot her opt ions ar e unaffect ed by t he ban.
This t echnique cannot account for t he ef-
fect s of long-t er m changes in musical-t ype
pr efer ence, equipment st ock, pur chase/t aping
fr equencies, or use of alt er nat ive media. Al-
t hough t he dir ect ion of t he est imat e bias in-
duced by t hese effect s is not clear , most of t he
excluded effect s ar e longer -t er m in nat ur e.
This suggest s t hat t he compensat ing var i-
at ion obt ained under t hese assumpt ions will
be a r easonable por t r ayal of act ual shor t -t er m
impact s say, over t he fir st year aft er t he
ban.110
The aver age frequency-weighted pr obabilit y
of select ing t he made-t ape opt ion is 15.8 per -
cent .
111
This implies t hat t he consumer values
each made-t ape at $10.25 ($1.62/0.158) a
r easonable value given t he cur r ent pr ices of
r ecor ds, pr er ecor ded casset t es, and CDs, and
t he unique char act er ist ics of made-t apes (po-
t ent ially super ior sound qualit y, opt ion t o
combine songs by mor e t han one ar t ist , abilit y
t o cust omize by select ing only desir able songs,
et c.). To under st and t he implicat ions of t his
value, consider t he aver age consumer making
10 pur chase/t aping decisions. On t he basis of
t he 15.8 per cent pr obabilit y, t his consumer
can be expect ed t o make 1.58 made-t apes per
10 pur chase/t apings. Using Manner ings com-
pensat ing-var iat ion calculat ion indicat es t hat
in t he shor t t er m for example, dur ing t he
fir st year aft er a t aping ban t he consumer
would have t o be paid $16.20 ($1.62X 10) t o be
as well off as befor e t he ban.
I I ~hiS technl{~e ~ou]~ ~]So ~ ~~ t. ~S~ t. ev~uate other ~]icies that might restrict, rather than eliminat e h o m e t a p i n g .
111 Not e t hat t his is higher t han t h
e
nweight ~ ~r cen~e Chwsingt he made-~pe option as indicated in t able 7-6. This r eflect s t he
fact t hat t he consumer s in t he sample wit h higher pr obabilit ies of choosing t he made-t ape opt ion also have higher pur chase/t aping
fr equencies.
200 * Copyr i gh t a n d Hom e Copyi n g: Tech n ol ogy Ch a l l en ges t h e La w
Est i ma t i n g Hyp ot h et i ca l I n d u st r y a n d
Con su mer Effect s Absen t Ta p i n g
Pr evious analyses have not pr esent ed est i-
ma t es of t he economic effect s of home
audiot aping on consumer s. Alt hough t he r e-
cor ding indust r y only consider s lost r evenues
t o be r elevant for policy,
112
consumer effect s
ar e impor t ant when consider ing societ ys eco-
nomic welfar e. This sect ion will evaluat e t hr ee
t ypes of hypot het ical effect s:
c
q
q
t he change in r ecor ding-indust r y r eve-
nues (i.e., r et ail sales of albums or t he
equivalent ), absent home t aping,
t he change in r evenues fr om blank-t ape
sales, absent home t aping,
t he change in consumer s economic wel-
far e, absent home t aping, based on Man-
ner ings est imat es of t he compensat ing
var iat ion and consumer s valuat ion of
homemade t apes.
Calculat ions will use 1987 pr ice and sales vol-
ume figur es, consist ent wit h t he t ime per iod
of Manner ings est imat es. The hypot het ical
change in net economic welfar e, absent home
t aping, can be est imat ed by combining t he in-
dust r y-r evenue and consumer -welfar e effect s.
This est imat e will r oughly appr oximat e t he
net effect , because changes in indust r y pr ofit s
and r ent s (i.e., r ecor ding and blank-t ape in-
dust r y pr ofit s and r oyalt ies t o per for ming ar t -
ist s and copyr ight holder s), r at her t han indus-
t r y r evenues, should be used. We ar e unable t o
obt ain indust r y dat a wit h which t o est imat e
pr ice-cost mar gins, t hus r evenues ar e used.
For illust r at ive pur poses, a ballpar k r ange
for r ecor ding indust r y pr ofit s and r ent s will be
pr ovided, based on t he 40-per cent figur e t hat
Gr eenspan pr esent ed in his t est imony. OTA
consider s t hat t his is an upper bound for r e-
cor ding-indust r y pr ofit s and r ent s.
The est imat es in t his sect ion select a br oad
r ange of plausible values for t he indust r y and
consumer effect s, but do not at t empt t o ac-
count for t he fr act ion of music t apings t hat
ar e fair use or ar e done by amat eur or pr ofes-
sional musicians, composer s, et c.
On t he basis of t he number of home t apes
assumed not t o be made, we can use Manner -
ings compensat ing var iat ion and t he $10.25
valuat ion of homemade t apes t o est imat e t he
hypot het ical shor t -t er m decr ease in consum-
er s economic welfar e absent home music t ap-
ing. On t he basis of t he assumed number of
t apes t hat would not be made and t he as-
sumed sales displacement and/or sales st imu-
lat ion effect s of t aping, t he hypot het ical
shor t -t er m effect s on r ecor ding-indust r y r eve-
nues can be est imat ed. Similar ly, if blank
t apes wer e not pur chased t o make home
t apes, t he hypot het ical effect s on blank-t ape
r evenues can be est imat ed.
The same st ar t ing point i.e., t he number
of blank t apes sold in a given year can be
used t o pr oduce a br oad r ange of est imat es.
Calculat ions of t his sor t ar e necessar ily inex-
act , since t hey r ely on sequences of assump-
t ions and appr oximat ions. Mor eover , even t he
pr emises used t o appr oximat e t he indust r y
and consumer effect s ar e subject t o disput e.
113
For a chosen fr amewor k, var ious appr oaches
t o int er pr et ing and using sur vey and indust r y
dat a ar e possible. Oft en, sever al alt er nat ives
ar e equally plausible, and t he choice is subjec-
t ive. Thus, analyst s can disagr ee as t o t he
pr efer r ed calculat ion.
1 lz~ a~ve. This pint was emphasimd in the RIAA comments on a drafl of this report.
113For e~p]e, depending on ones pers~ive as to t he legal st at us of home t aping, one might pr efer a net -eCOnOmic-welfme
fr amewor k, as opposed t o a focus only on r ecor ding-indust r y r evenue effect s. As we have seen, RIAA favor s t he lat t er appr oach, while
HR.RC favor s t he for mer .
Tables 7-11 pr esent s r anges for t he est i-
mat ed indust r y, consumer , and net economic
effect s absent all home t aping. Table 7-12 pr e-
sent s est imat es absent home t aping fr om
pr er ecor ded sour ces only. These examples
show br oad r anges of values, but t he end
point s should not be int er pr et ed as maximum
or minimum values.
The calculat ions in t able 7-11 ar e based on a
r ange of conclusions about t he hypot het ical
effect s of a ban on home t aping t hat t he same
set of sur vey dat a and ot her sour ces can be
shown t o suppor t . The st ar t ing point for
t hese is t he number of blank t apes sold in
1987. The calculat ions ar e based on:
q
q
q
q
Manner ings value for made-t apes,
est imat ed 1987 aver age r et ail pr ices of
$7.80 per album-equivalent and $2.45
per blank t ape,
a 1983 Audit s and Sur veys finding t hat
84 per cent of blank t apes ar e used t o r e-
cor d music, and
t he 1988 OTA sur vey finding t hat 79.6
per cent of t apings use new blank t ape.
The var iat ions, a dozen examples in all, dif-
fer accor ding t o:
q
q
q
whet her an at t empt is made t o cor r ect
for business use of blank t apes,
114
how much sales-displacing mat er ial is
assumed t o be on each t ape,
115
how t he OTA sur vey quest ions on dis-
placement ar e int er pr et ed and/or dis-
count ed t o pr oduce t he displacement
r at e, and
. whet her t he abilit y t o make home t apes
is assumed t o st imulat e some pur chases
of pr er ecor ded music.
The t hr ee var iat ions cat egor ized under (A)
in t able 7-11 follow t he calculat ions in Man-
ner ings cont r act or r epor t , which consider ed
t he effect s of a ban on music t aping fr om bot h
pr er ecor ded and br oadcast sour ces. Manner -
ing used indust r y sales dat a fr om 1987 (t he
last year t hat complet e dat a wer e available at
t he t ime of wr it ing), along wit h some ear lier
sur vey r esult s t o augment t he OTA sur vey.
116
The sales dat a indicat ed t hat indust r y ship-
ment s of pr er ecor ded for mat s r eached an an-
nual r at e of 637 million album-equivalent s in
1987, wh ile r ou gh ly 388 million bla n k
audiocasset t es wer e sold. Manner ing con-
cluded t hat if as t he 1983 Audit s and Sur veys
r esult s indicat ed, r oughly 84 per cent of blank
t apes ar e used t o r ecor d music, t hen some 326
million blank t apes wer e used t o r ecor d music
in 1987. Since t he OTA sur vey dat a (quest ion
43g) suggest ed t hat 79.6 per cent of t apings
used nonblank (pr eused) t apes, Manner ing
calculat ed t hat about 409.5 million blank and
nonblank t apes wer e used t o make home mu-
sic t apes. On t he basis of t he OTA sur vey dat a,
he also est imat ed t hat home t apes cont ained
an aver age of 1.63 album-equivalent s of mat e-
r ial (quest ions 44d-441).
Fr om r esponses t o sur vey quest ions 451 and
45n, Manner ing det er mined t hat (for t hose r e-
spondent s asked t hese quest ions), a net of
about 4 of ever y 10 albums t aped would have
114Accor d1ngt o t he ~C, some 10 ~r cent of consumer pur chases of blank t apes ar e for business u*. Therefore, they argue, these
ar e pr esumably not used for music t aping and blank-t ape sales should be adjust ed accor dingly. (Gar y J . Shapir o et al., op. cit ., foot not e
87, p. 26. )
11 SMmner ing est imat ~ t hat home t iPS cont ined on aver age 1.63 album equivalent s. The HR.RC ar gues t hat consumer s might
not pur chase all t he r ecor ded mat er ial on a home t ape, if t aping wer e not possible. (Ibid., p. 22)
I I BAuditS and surveys!
Home Taping in Amer ica, op. cit ., foot not e 11; A. Gr eenspan (Hear ings on S. 1739), op. cit ., foot not e 9;
Int er nat ional Tape/Disc Associat ion, Repor t on 1987 Blank Audio Casset t e Sales (New Yor k, NY: ITA 1988); Recor ding Indust r y
Associat ion of Amer ica, News R.eleaseofApr . 19, 19880n 19871 ndust r y Shipment s; War ner Communicat ions, Inc., 1981 Est imat e
of Loss Due t o Home Taping, op. cit ., foot not e 11.
20-900 - 89 - 6
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Table 7-11.-Hypotheltlcal Changes Absent Home Music Taping (All Sources) - Short Term Only
Recolrding industry A B C 0
a. 1987 blank tape sales ... 388M 388M 388M 388M
b. base (home use) ........ 100% 100% 90% 90%
c. % used for music taping . 84% 84% 84% 84%
d. Il of blank tapes used ... 326M 326M 293M 293M
e. % of music taping on
blank tapes ..... . . . . . . 79.6% 79.6% 79.6% 79.6%
f. Il of blank & non-blank
tapes used for home
music taping .......... 409.5 M 409.5 M 368.5 M 368.5 M
g. tl of album-equivalents
per home tape ........ 1.63 1.0 1.0 1.0
h. assumed sales
dlisplacement rate ...... 38% 21% 5.4% 38% 21% 5.4% 38% 21% 5.4% 38% 21% 5.4%
i. Ii of displacing album-
equivalents ........... 254 M 140 M 36M 156 M 86M 22M 140 M nM 20M 140 M nM 20M
j. a.verage 1987 price per
album-equivalent ....... $ 7.80 $ 7.80 $ 7.80 $ 7.80 $ 7.80 $ 7.80 $ 7.80 $ 7.80 $ 7.80 $ 7.80 $ 7.80 $ 7.80
k. hlypothetical gross

dlisplacement change
absent taping ......... $1981 M $1092 M $ 281 M $1217 M $ 671 M $ 172 M $;1092 M $ 601 M $ 156 M $1092 M $ 601 M $ 156 M
I. assumed sales
stimulation rate ....... . 0% 0% 0% 0% 0% 0% 0% 0% 0% 2% 2% 2%
m. 1987 shipments
I[album-equivalents) .... -
- - - - - - - -
637M 637M 637M
n. Il of lost sales
(album-equivalents) ... - 13 M 13 M 13 M
o. hlypothetical recording-
industry revenue
stimulative change
albsent taping .........
- - - - - - - - -
-$101 M -$101 M -$101 M
p. hypothetical net
recording-Industry
revenue change
Ilbaent taping ........ $1981 M $1092 M $ 281 M $1217 M $ 671 M $ $1092 M $ 601 $ 156 M $ 991 M $ 500 M $ SSM
q. as hypothetical
net change In proflta
lind royalties ........ $ 782 M $ 437 M $ 112 M $ 487 M $ 268 M $ $ 437 M $ 240 M $ 62 M $ 386 M $ 200M $ 22M
(Continued on next page)
Table 7-11.Hypotheticai Changes Absent Home Music Taping (All Sources) Short Term Only (continued)
Blank-tape Industry
r # blank tapes assumed
not purchased for
music taping (1987)
(see idem d above) . . .
s 1987 average price
per blank tape . . . . . . . .
t. hypothetical revenue
change absent music
taping . . . . . . . . . . . . .
Consumer welfare
u # of home music tapes
not made (see item f
above) . . . . . . . .
v consumer valuation
(per tape) . . . . . . . . . . . .
w. hypothetical consumer-
welfare change absent
music taping . . . . . . . .
x. Range of net economic
welfare change (based)
on industry revenues) .
NOTES:
326 M
$2.45
-$799 M
409.5 M
$10.25
-$4197 M
293 M
$2.45
-$718 M
368.5 M
$10.25
-$3777 M
43015 M - TO
-$4440 M
a From industry sales data, International Tape/Disc Assoaation (ITA), 1988
b According to the HRRC, about 10% of all consumer tape sales are for professional (not home) use
c From Audits & Surveys data, 1982
d d = axbxc
e From OTA survey data, 1988
f f d/e
g The 163 figure comes from OTA survey data, 1986 The HRRC argues that consumers might not purchase
all the material on the made tape
h Various interpretations of OTA survey data, 1988 Mannering used the 38% and 21% figures, the HRRC
suggested an alternative discounting yielding 5.4%
i i = f x g x h
j Calculated by Mannering from RIAA Market Research Committee data, 1988
k k = iX j
I OTA survey does not yield a measure of this rate directly Forsake of illustration, a 2% rate IS assumed OTA
data indcates that for 14% of recent purchases, individual had heard selection from album or by the artist on
a home tape
m Album-equivalent shipments from RIAA data, 1888
n n = I xm
o o = n x -$(7.80)
p p = k + o
q Townsend& Greenspan (1985) suggested that 40% of gross revenues went to company profits and
royalty payments
r See (d)
s Calculated by Mannering from ITA data, 1988
t t = -(r x s)
u See (f)
v Estimated by Mannering, 1989
w w = (u x v)
x x = p + t + w
Table 7-12.-Hypothetical Changes Absent Home Music Taping From Prerecorded Sources - Short Term Only
Recording industry
a total blank & nonblank
tapes used for home
music taping . . . . .
b. # of album-equivalents
per home tape . . . . . . .
c. % of music taping from
prerecorded sources
d.
e
f.
g.
h.
i.
j.
assumed sales
displacement rate . . . . .
# of displacing album-
equivalents ... . . . .
hypothetical gross
recording-industry
displacement change
absent taping
(@ $7.60 ea) . . . . . . . . .
assumed sales
stimulation rate . . . . . . .
1967 shipments
(album-equivalents) . . .
# of lost sales
(album-euivalents) . . .
hypothetical recording
industry stimulative
change absent taping . .
k. hypothetical net
recording-industry
revenue change
absent taping . . . . . . .
i. 40% as hypothetical
net change in profits
and royalties . . . . . . .
E
409.5 M
1.63
57%
36% 21% 5.4%
154 M 80M 80M
$1131 M $624 M $ 156 M
o% o% o%

$1131 M $624 M $ 156 M
$452 M $ 250 M $ 62 M
F
409.5 M
1.0
57%
36% 21%
89M 49 M
$694 M $362 M
o% o%

5.4%
13 M
$ 101 M
o%
-.
$694 M $362 M $ 101 M
$278 M $ 153 M $ 40 M
G
366.5 M
1.0
57%
36%
80M
$624 M
o%
21%
44M
$343 M
o%
5.4%
11 M
$ 8 6 M
o%
.
$624 M $343 M $ 66 M
$ 250 M $ 137 M $ 34 M
H
366.5 M
1.0
57%
36% 21% 5.4%
80M 44M 11 M
$624 M $343 M $ 66 M
2% 2% 2%
637 M 637 M 637 M
13 M 13 M 13 M
-$101 M -$101 M $101 M
$523 M $242 M -$ 15 M
$209 M $ 97 M -$ 6M
(Continued on next p a g e)
Table 7-12.-Hypotheticai Changes Absent Home Music Taping From Prerecorded Sources Short Term Only (continued)
Blank-tape Industry
m. # of blank tapes assumed
not purchased from
prerecorded sources
(57% of tapings)
n. 1967 average price
per blank tape . . . . . . . .
0. hypothetical revenue
change absent music
taping . . . . . . . . . . . . .
Consumer welfare
p. # of home tapes
from prerecorded
sources not made
q consumer valuation
(per tape) . . . . . . . . . . . .
r. hypothetical consumer
welfare change absent
music taping . . . . . . . .
s. Range of net economic
welfare change (baaed]
on industry revenues)
NOTES:
a See item f in table 711
b See Item g m table 7-11
c OTA survey data, 1988
d See item h m table 7-11
e e = ax b xcxd
186 M
$2.45
-$456 M
233 M
$10.25
-$2366 M
167 M
$2.45
-$409 M
210 M
$10.25
-$2152 M
To -$2576 M
f f = ($7 SO) x e See item j in table 7-11
g See item I in table 7-11
h RIAA data, 1988
I I =g xh
I j
=
-($7.80) x i
k k = f + j
I See item q in table 7-11
m See item r in table 7-11, m = 326 M or 293 M times 57
n Calculated by Mannering from ITA data. 1988
o o = -(m x n)
p p = (057 x a)
q Estimated by Mannering, 1909
r r = -(p x q)
s s = k + o + r
been pur chased if home t aping wer e not avail-
able.
117
Only t hose r espondent s who answer ed
yes t o Q.45iindicat ing t hat t hey t hought
t hey could have purchased a recording with
the same material, if they had wanted to wer e
asked t hese sales-displacement quest ions.
For t he ent ir e populat ion, aft er account ing for
per cept ions a bou t t h e a va ila bilit y of a
pr er ecor ded ver sion, a net of about 2 of ever y
10 albums t aped would have been pur chased
if home t aping wer e not an opt ion. Manner ing
pr esent ed calculat ions using bot h values.
118
Some r eviewer s have subsequent ly ar gued
t hat even t he lower value gr eat ly over st at es
t he displacement r at e t hat could be most
plausibly infer r ed fr om t he sur vey dat a.
Dr awing on t he mar ket r esear ch pr act ice of
halving t he undiscount ed t ake r at e indi-
cat ed by r esponses t o quest ions like t he t wo
above, t hese r eviewer s suggest ed t hat abet t er
assumpt ion would be a 5.4 per cent sales dis-
placement r at e.
119
The t r ue r at e can be ver y
confident ly bounded by O and 40 per cent . For
each set of var iat ions in t able 7-11, hypot het i-
cal r evenue incr eases have been calculat ed us-
ing displacement r at es of 38, 21, and 5.4 per -
cent .
Since fewer blank t apes would pr esumably
be sold, absent home music t aping, blank-
t ape r evenues would decr ease. Table 7-11 calc-
ulat es t his hypot het ical r evenue loss using an
est imat e of $2.45 for t he aver age 1987 r et ail
pr ice.
120
Shor t -t er m consumer -welfar e losses (i.e., in
t he fir st year ) ar e based on t he 409.5 million
blank and nonblank t apes t hat will no longer
be used for t he made-t ape opt ion, valued at
$10.25 per for egone made-t ape (see r ows u-v
of t able 7-11). These est imat ed consumer
losses exceed est imat ed indust r y r evenue
gains fr om t he ban and pr oduce a net eco-
nomic loss t o societ y.
121
For t he calculat ions in var iat ion (B) of t able
7-11, each made-t ape is assumed t o cont ain
only one album-equivalent of mat er ial. In
var iat ions (C) and (D), t he base of blank-t ape
sales is r educed by 10 per cent t o account for
business use of blank t apes, under t he as-
sumpt ion t hat t hese ar e not used for music
t aping. Also, var iat ion (D) assumes t hat some
sales of r ecor dings ar e st imulat ed by t he abil-
it y t o make home t apes fr om t hem. Because
t he OTA sur vey does not allow t his effect t o be
measur ed dir ect ly, a nominal value of 2 per -
cent was select ed for illust r at ive pur poses; ac-
t ual values may be higher or lower .
Not e t hat t he t welve var iat ions used as ex-
amples pr oduce a ver y br oad r ange by over a
fact or of30 of hypot het ical r ecor ding-indus-
t r y r evenue changes absent home audiot ap-
ing. These var iat ions do not , however , alt er
1 I 7A net of~ ~rcent of t i@~bums wer e r epor t ed as would-be pur chases. Respondent s indicat ed t hat near ly 5 of ever y 10 r oped
albums ar e would-be pur chases, but t hat one of t hese 5 would displace anot her pur chase, leaving t he net effect at near ly 4 out of 10.
This is r oughly t he same figur e r epor t ed by War ner Communicat ions in 1982 and used in t he Townsend & Gr eenspan analyses.
1 laMmner ing consider ed t hat t he Upper bound is t he mor e r easonable one, because pr er ecor ded for mat s could r easonably act as a
subst it ut e for a cust omized home t ape, even if t he mat er ial is not exact ly t he same (e.g., t he cust om t ape might delet e or add a single
song, compar ed wit h an album).
119$hapir o et ~., op . cit ., footnote 87, PP. 25-27.
1 ~M~n er i n g d et er mi n ed t h e u n i t . t a p e pr ice fr om t he 1984 figur e ($2.24) as r epor t ed by Gr eensPan ~d aaust ed it t o 1987 pr ice
levels by assuming an annual t ape pr ice inflat ion r at e of 3 per cent .
1 zlTab]e 7.11 appr o~ma~s t his as t he sum of r ecor ding- and blank-t ape indust r y r evenue chan~s ~d t he ch~~ in consumer
welfar e. St r ict ly speaking, indust r y pr ofit s and r ent s, not r evenues, should be used. Ther efor e, t able 7-11 over st at es t he indust r y
effect s.
To pr ovide some per spect ive as t o t he magnit ude of t his loss, Manner ing est imat ed t hat for net indust r y r evenue gains (t he sum of
changes in r ecor ding- and blank-t ape r evenues) t o exact ly balance consumer welfar e losses, t he aver age consumer would have t o r -
Wir e only $2.88 (as opposed t o $10.25) compensat ion t o for ego a made-t ape choice, under t he assumpt ion of a 38-per cent salesdis-
placement r at io. For a 21-per cent r at io, t he consumer would have t o value t he made-t ape at only $0.71, less t han t he pr ice of a blank
t ape.
.
t he qualit at ive r esult , which indicat es a con-
sist ent lost in consumer s economic welfar e
and in societ ys economic welfar e. Fur t her -
mor e, blank-t ape r evenues decr ease t hr ough-
out .
Table 7-12 summar izes calculat ions similar
t o t hose in t able 7-11, except t hat it only con-
sider s mu sic t a pin g fr om pr er ecor ded
sour ces. The OTA sur vey indicat ed t hat some
57 per cent of home audiot apings ar e fr om
pr er ecor ded sour ces (see ch. 6). In t able 7-12,
a lt h ou gh bla n k-t a pe r even u es decr ea s e
t hr oughout , t he losses ar e smaller because
fewer sales ar e lost . Consumer s economic
welfar e losses ar e smaller because only 57 per -
cent of home t apes ar e not made; similar ly,
t he net economic loss t o societ y is smaller
t han in t he examples in t able 7-11.
Thus, alt hough home t aping may r educe
t he r ecor ding indust r ys r evenues, a ban on
home audiot aping would be even mor e har mf-
ul t o consumer s, and would r esult in an out -
r ight loss of benefit s t o societ y, at least in t he
shor t t er m, in t he billions of dollar s.
122
The
longer -t er m consequences of such a ban ar e
less clear , and would depend on how t he r e-
cor ding indust r ys pr ofit s wer e invest ed, how
addit ional r evenues would affect cr eat ivit y,
how r ecor ding companies chose to pr ice t heir
pr oduct s, what new t echnologies were devel-
oped, and how consumer s t ast es changed. I n
t h e lon g t er m, t h e n et effect s on soci et ys eco-
n omi c welfa r e mi gh t be p osi t i ve or n ega t i ve.
Manner ings analysis suggests t hat the so-
cial costs of a home-t aping ban can be signifi-
cant in the shor t t er m, but t hat the r ange of
possible effects is very br oad. Mor eover , the
long-t er m effects are ambiguous, depending
on r esponses by the r ecor ding indust r y and so-
cietys valuat ion of any addit ional wor ks t hat
ar e pr oduced, absent home t aping. The possi-
ble net effects (on indust r y and consumer s)
must be given car eful consider at ion in policy
for mulat ion. I t i s pot ent ially misleading t o
ba se p oli cy on a n est imat e of on e of sever a l
h a r ms or ben efi t s.
lzzEven iwor ingeff~s on blank-t ape r evenues, t he loss t o societ y fr om a ban would be in t he $2-$3 billion r~ge ~depenciing On the
salesdisplacement r at e used).
Ap p en d i xes
Ap p e n d i x A
Su r vey Develop men t a n d Revi ew
Sur vey development was in t wo major
st ages: 1) pr eliminar y act ivit ies, including
cont r act or select ion and focus gr oup meet -
ings, and 2) sur vey inst r ument development
and r eview.
P RELI MI NARY ACTI VI TI ES
Con t r a ct or S el ect i on
OTA r et ained t he ser vices of a pr ofessional
sur vey r esear ch fir m, Schulman, Ronca &
Bucuvalas, Inc. (SRBI), t o develop t he sur vey
inst r ument and t o administ er t he sur vey.
SRBI was select ed as t he sur vey cont r act or in
May 1988 fr om a field of 14 fir ms t hat submit -
t ed pr oposals for consider at ion.
SRBIs r esponsibilit ies, as specified in t he
cont r act , included developing and r evising a
concept ual fr amewor k and conduct ing t wo fo-
cus-gr oup meet ings. Then SRBI was t o de-
velop t he sampling plan and sur vey inst r u-
ment in conjunct ion wit h OTA st aff and
OTAs sur vey wor king gr oup. The sur vey in-
st r ument was expect ed t o aver age 20 minut es
in lengt h (t hat is, it would be much shor t er for
r espondent s who did no t aping or copying and
longer for r espondent s who had a number of
copying activities). Aft er t he sur vey inst r u-
ment was complet ed, SRBI was t o administ er
it t o a nat ionally r epr esent at ive sample of
1,500 per sons of age 10 and over .
Focu s Gr ou ps
SRBI held t wo focus-gr oup meet ings at t he
beginning of t he sur vey development pr ocess.
Focus gr oups ar e small discussion gr oups of
about 10 people r andomly select ed fr om a
populat ion similar t o t he expect ed sur vey
populat ion. The meet ings ar e st r uct ur ed, in
t hat t he discussion leader has a specific
agenda of quest ions t o ask and t opics t o cover .
They ar e, however , designed t o encour age t he
par t icipant s t o speak fr eely on t he t opics and
t o give t heir opinions, feelings, and impr es-
sions. The focus gr oup meet ings wer e espe-
cially useful in get t ing immediat e feedback on
what people t hought and how t hey t alked
about home copying issues. The meet ings
wer e also a pr eliminar y t est of r espondent s
r ea ct ions t o pr oposed quest ions. Focus
gr oups can help a sur veyor ident ify addit ional
t opics of int er est or change wor ds and phr ases
t hat will be confusing t o r espondent s.
Accor ding t o pr evious st udies, young people
ar e major pur chaser s of pr er ecor ded audio
pr oduct s and ar e ver y act ive in home t aping.
For t hese r easons SRBI and OTA felt it essen-
t ial t hat t he per spect ives of young people be
well r epr esent ed in t he focus-gr oup discus-
sions. Thus, while one focus gr oup had all
adult s (per sons over 18 year s of age), t he ot her
ha d pr ima r ily young people (per sons 15
t hr ough 22 year s of age). In bot h gr oups,
near ly all of t he par t icipant s owned at least
one t ape player and had pur chased a r ecor d,
pr er ecor ded casset t e t ape, or compact disc
wit hin t he past 6 mont hs. In addit ion, most of
t he par t icipant s also had at least one videocas-
set t e r ecor der in t heir household, and about
half of t hem had access t o a per sonal comput -
er .
SURVEY DEVELOP MENT AND
REVI EW P ROCESS
The sur vey inst r ument it self was developed
by SRBI and OTA st aff wit h consider able in-
put fr om out side advisor s and r eviewer s. The
open pr ocess used t o develop t he sur vey of
home copying was based on public involve-
ment t echniques t hat ar e commonly used in
OTA st udies.
211
Roles of R evi ewer s
The advisory panel, as in most OTA st udies,
ser ved t he r ole of gener al r eview of t he st udy.
The panel included r epr esent at ives of many of
t he r elevant st akeholder gr oups, as well as
t echnology exper t s and labor and consumer
r epr esent at ives.
Inst r ument al t o t he development of t he
sur vey was t he sur vey working group. This
gr oup included a number of sur vey exper t s.
Two member s wer e familiar wit h ear lier
audiot aping st udies, while t he r est wer e unaf-
filiat ed wit h any ear lier wor k r elat ed t o t he
home-copying issue. In addit ion, t her e wer e
member s who wer e specifically exper t in con-
sumer behavior issues. The sur vey wor king
gr oup was designed t o lend t echnical exper t ise
in t he development of t he sampling plan, sur -
vey inst r ument , and analysis.
In addit ion, t her e wer e appr oximat ely 20
ot her reviewers. These included independent
t echnical exper t s, r epr esent at ives of st akehol-
der gr oups, as well as OTA cont r act or s wor k-
ing on ot her aspect s of t he st udy. OTA st aff
mailed dr aft mat er ial t o t hese r eviewer s, who
r et ur ned comment s in wr it ing or by t ele-
phone. In addit ion, some r eviewer s at t ended
meet ings of t he advisor y panel and sur vey
wor king gr oup and cont r ibut ed t o t he discus-
sions.
Thr oughout t his appendix, member s of t he
above t hr ee gr oups ar e collect ively r efer r ed t o
as (r eviewer s unless t her e is a par t icular r ea-
son t o specify member s of t he advisor y panel
and sur vey wor king gr oup separ at ely.
The r eviewer s gave invaluable comment s
and advice as t he sur vey inst r ument was de-
veloped. But t he act ual wor k of cr eat ing t he
sur vey inst r ument was per for med by t he sur -
vey cont r act or , SRBI, in consult at ion wit h
OTA st aff. Of cour se, OTA r emains r esponsi-
ble for t he final cont ent of t he sur vey inst r u-
ment .
Ma j or Poi n t s of Con t r over sy Ea r l y
i n t h e R evi ew Pr ocess
OTA st aff and t he sur vey cont r act or dis-
cussed ear ly ideas for t he sampling plan and
concept ual fr amewor k of t he sur vey at t he in-
it ial meet ings of bot h t he advisor y panel and
t he sur vey wor king gr oup. In addit ion, t he
sur vey wor king gr oup r eviewed an ear ly dr aft
of t he sur vey inst r ument at it s fir st meet ing.
Thr ee major point s of cont r over sy ar ose
dur ing t he init ial meet ings of t he advisor y
panel and t he sur vey wor king gr oup. These
had t o do wit h t he scope of t he sur vey and t he
sampling plan. OTA or iginally planned t o ask
quest ions about audio, video, and comput er
copying in t he same sur vey. The sur vey popu-
lat ion was int ended t o be a nat ionally r epr e-
sent at ive sample of 1,500 per sons of age 10
and over . Some member s of t he sur vey wor k-
ing gr oup and advisor y panel (r epr esent ing
pr imar ily t he st akeholder gr oups on bot h
sides) ar gued for cefully t hat OTA should fo-
cus only on audiot aping. They ar gued t hat
audio, video, and comput er copying wer e fun-
dament ally differ ent and could not be t r eat ed
in t he same sur vey. Audiot aping, accor ding t o
t heir r easoning, was t he pr oblem cur r ent ly of
int er est t o t he Congr ess. They held t hat OTA
should conduct a det ailed analysis of home
audiot aping t hat would at t empt t o r esolve t he
differ ences seen in pr evious st udies. To t his
end, t hese r eviewer s consider ed t hat OTA
should at t empt t o give a definit ive answer t o
such quest ions as:
q
q
How much audiot aping is done each
year ?
How many sales of pr er ecor ded, copy-
r ight ed mat er ial ar e displaced by home
t aping? and
.
Appen d i x A-S u r vey Devel opm en t a n d Revi ew q 213
. To what ext ent ar e sales of r ecor dings
st imulat ed by home t aping?
1
All r eviewer s agr eed t hat OTAs or iginal
plan t o include audio, video, and comput er
copying was ext r emely ambit ious and would
be difficult t o accomplish in a single sur vey in-
st r ument . Most r eviewer s did, however , sup-
por t OTAs goal of keeping t he sur vey focus as
br oa d a s possible. Alt hough audiot aping
should be t he pr imar y t opic of t he st udy, most
r eviewer s agr eed t hat quest ions on videot ap-
ing and comput er copying would help t o for m
a bet t er cont ext for policy analysis, and would
per haps ser ve as a basis for fut ur e wor k. As it
t ur ned out , at a lat er st age of t he sur vey devel-
opment pr ocess, t he sect ion on comput er
copying had t o be delet ed because of quest ion-
nair e lengt h.
In a r elat ed ar ea of cont r over sy, some r e-
viewer s suggest ed t hat t he sample populat ion
should be 1,500 audiotapes r at her t han 1,500
member s of t he gener al public, only some of
whom would be t aper s. It would be possible,
wit h a sample of all t aper s, t o ask mor e de-
t ailed quest ions and t o make finer dist inc-
t ions, for example, bet ween heavy t aper s and
occasional t aper s. These r eviewer s suggest ed
t hat such an appr oach would make it possible
for OTA t o pr oper ly weight t he r esponses and
t o make mor e accur at e est imat es of t he
amount of t aping and t he level of economic ef-
fect s on t he r ecor ding indust r y.
By t he same t oken, some of t he same r e-
viewer s object ed t o including opinion ques-
t ions. They suggest ed t hat t he OTA sur vey
should focus on quest ions about audiot aping
act ivit y, and not include any quest ions about
at t it udes t owar d t aping or t owar d int ellect ual
pr oper t y or opinions r elat ed t o policy opt ions.
They point ed out t hat t her e would not be
t ime, in an aver age 20 minut e int er view, t o do
a t hor ough st udy of audiot aping act ivit y and a
t hor ough opinion poll as well.
Most r eviewer s suppor t ed OTAs or iginal
plan t o int er view t he gener al public and t o in-
clude opinion and at t it ude quest ions. They
felt , as did OTA st aff, t hat only a st udy of t he
gener al public could give a clear pict ur e of t he
ext ent of home t aping and copying. Opinion
quest ions give t he oppor t unit y t o see what r e-
lat ionships exist bet ween t aping act ivit y and
at t it udes t owar d int ellect ual pr oper t y. Pr evi-
ous st udies have not usually consider ed t hese
t wo t opics t oget her .
Fur t her , it is useful t o under st and major
similar it ies and differ ences in at t it ude be-
t ween t aper s and ot her member s of t he pub-
lic. If t he at t it udes of t aper s and nont aper s t o-
war d int ellect ual pr oper t y ar e essent ially
similar , Congr ess may wish t o t ake a differ ent
appr oach t o new policy t han it would if t he at -
t it udes ar e ver y differ ent . In det er mining how
effect ive pot ent ial policy alt er nat ives will be,
it is useful t o gauge how accept able t hey seem
t o t he populat ion as a whole as compar ed wit h
t heir accept abilit y t o a special int er est gr oup
(e.g., people who make home audiot apes).
The final ar ea of cont r over sy dealt wit h ac-
cur acy. Some r eviewer s suggest ed t hat OTA
would not be able t o get accur at e infor mat ion
fr om a sur vey on t aping and copying act ivit y.
They suggest ed t hat some t aper s, believing
t heir act ions t o be illegal or immor al, would
simply answer unt r ut hfully. Ot her r espon-
dent s would int end t o answer t r ut hfully, but
t heir answer s would be inaccur at e owing t o
fault y r ecall and t elescoping.
2
1 Excer pt ed fr om: Rober t S. Schwar t z, McDer mot t , Will&Emor y and member , sur vey wor kinggr oup; J oseph Smit h, Oxt oby-Smit h;
St even Br enner , Cor nell, Pelcovit s & Br enner , Consult ant s for Home Recor ding Right s Coalit ion; memor andum t o OffIce of Technol-
ogy Assessment , J uly 8, 1988, p. 4.
Telescoping r efer s t o inaccur acy in r emember ing t he t ime elapsed bet ween event s or t he number of event s in a t ime per iod. Oft en
event s t hat occur r ed out side t he r efer ence per iod ar e r ecalled as occur r ing wit hin t he r efer ence per iod.
Some r eviewer s st at ed t hat OTA would not
get accur at e infor mat ion about t he number of
r ecor ds or t apes a r espondent owned, for ex-
ample, owing t o fault y r ecall. The only way,
t hey said, t o det er mine how many homemade
t apes a per son has would be t o count t hem
dur ing an in-per son int er view. These r eview-
er s wer e par t icular ly wor r ied t hat if OTA used
r esult s of t he sur vey t o calculat e economic
har ms t o indust r y, t he calculat ion would be
inaccur at e. A number of ear lier st udies have
est imat ed losses t o indust r y by ext r apolat ing
t he number of hour s of t aped music (or t he
number of t aped songs) in home t ape libr ar ies
and mult iplying t hat number by t he pr ice of
pur chased r ecor dings. If OTA used such an
appr oach, t he r esult s would be lower t han ac-
t ual, since people ar e most likely t o under est i-
mat e t he number of t apes in t heir libr ar ies.
The pr oblems of dishonest y, fault y r ecall,
and t elescoping wer e r ecognized t o be pr ob-
lems of all sur vey r esear ch. Few r eviewer s
t hought t hat dishonest y would be a ser ious
pr oblem. In t he exper ience of SRBI and ot her
r esear cher s, r espondent s ar e gener ally hon-
est , even about sensit ive issues, so long as t he
quest ions ar e phr ased in a nonjudgment al
way. The possibilit y of conflict bet ween t her e-
spondent s behavior and belief could be mini-
mized by asking behavior al and at t it ude ques-
t ions at differ ent t imes. For example, t he OTA
sur vey was designed t o ask about t aping be-
havior fir st ; quest ions about beliefs and opin-
ions, which might be consider ed somewhat
judgment al, wer e clust er ed at t he end of t he
sur vey.
Fault y r ecall and t elescoping can be mini-
mized but not eliminat ed. The way t o mini-
mize t hese pr oblems is t o concent r at e on
quest ions about a specific event (e.g., t he last
t ime t he r espondent pur chased or used a cer -
t ain object ) or about a ver y r ecent t ime per iod
(e.g., event s in t he past week or past mont h).
The OTA sur vey focused on act ivit ies of t he
past week or mont h, or on t he most r ecent and
t he next most r ecent exper ience of pur chas-
ing, list ening, copying, et c. A few quest ions
asking for annual est imat es wer e r et ained,
mainly for scr eening pur poses (e.g., a per son
who had not viewed a videot ape in t he past
year was consider ed a nonviewer and excused
fr om fur t her quest ions in t hat sect ion) and t o
affor d a gener al compar ison wit h r esult s fr om
some pr evious st udies.
The pr oblem of fault y r ecall r emained, of
cour se. We could only expect t hat t he answer s
t o such quest ions as Appr oximat ely how
many audiot apes do you own? would be only
t he r espondent s best est imat e, not absolut e
t r ut h. As is discussed in t he chapt er on eco-
nomic analysis, OTAs appr oach differ ed fr om
t hat of ear lier est imat es of indust r y losses.
For t he pur poses of t his analysis, each r espon-
dent s best est imat e was adequat e.
Com m en t s on La t er S t a ges of R evi ew
Eleven mor e dr aft s of t he sur vey inst r u-
ment s wer e cr eat ed, and t her e wer e t hr ee ad-
dit ional r ounds of r eview following t he init ial
meet ings of t he advisor y panel and sur vey
wor king gr oup. Reviewer s wer e invit ed t wice
mor e t o comment on any aspect of t he sur vey
inst r ument , including possible inclusion, de-
let ion, or r ewor ding of quest ions. In t he last
r ound, immediat ely befor e t he sur vey went
int o t he field, r eviewer s wer e invit ed t o scr een
t he final sur vey quest ions for possible biases
in t he wor ding only.
The r eview pr ocedur e for t he sur vey wor k-
ing gr oup was t he most det ailed. Aft er r eading
a dr aft of t he sur vey, member s submit t ed
wr it t en comment s and t hen par t icipat ed in a
l-hour (or somet imes, mult i-hour ) t elephone
confer ence call t o discuss t heir comment s in
det ail wit h OTA and SRBI st aff. Sever al ot her
r eviewer s, including r epr esent a t ives of
st akeholder gr oups, also elect ed t o submit de-
t ailed comment s and t o par t icipat e in confer -
ence calls. Ot her r eviewer s and advisor y panel
member s pr esent ed br iefer comment s in wr it -
ing or by t elephone.
Appen d i x A- S u r vey Devel opm en t a n d Revi ew .215
Some of t he r eviewer s, specifically t he sur -
vey r esear ch exper t s advising t he Recor ding
Indust r y Associat ion of Amer ica, Inc. (RIAA)
and t he Home Recor ding Right s Coalit ion
(HRRC), submit t ed sample quest ions t hat
t hey t hought should be included in t he sur vey
inst r ument . Some of t hese wer e ver y helpful
t o OTA in developing it s own sur vey. For ex-
ample, t he ser ies of quest ions about t he most
r ecent pur chase of r ecor ds, pr er ecor ded cas-
set t es and CDs was gr eat ly impr oved by
adopt ing a modified ver sion of quest ions de-
veloped by t he HRRC and it s consult ant s.
3
Some suggest ed quest ions fr om st akehol-
der s could not be used, however , eit her be-
cause t hey went int o a level of det ail t hat was
inappr opr iat e for t he OTA sur vey or because
t hey would have int r oduced or exacer bat ed a
bias in t he sur vey. For example, HRRC and it s
consult ant s also offer ed an ext ensive and well-
developed ser ies of quest ions about t aping of
noncopyr ight ed mat er ial.
4
These quest ions, designed t o count ever y
occasion of such t aping, would have been use-
ful if OTA had been at t empt ing t o calculat e,
for example, what per cent age of audiot apes
ar e used nat ionwide for pur poses ot her t han
t o t ape copyr ight ed music. This had been
done in some pr evious sur veys. This was not
OTAs object ive, however , and t he det ailed in-
for mat ion, while int er est ing, would have been
inappr opr iat e. The OTA sur vey includes a
simpler sect ion on t aping of noncopyr ight ed
mat er ial t hat is bet t er balanced wit h t he sec-
t ion on music t aping and is mor e suit able for
t his st udy.
Comment s of all r eviewer s wer e ver y help-
ful in r emoving biased and leading quest ions
fr om t he sur veys.
s*, for e~p]e: R,Ober t S. Schwar t z, J oseph Smit h, and St even Br enner , per sonal communicat ion, J UIY 18, 1988.
41bid.
Ap p e n d i x B
Su r vey Qu est i on n a i r e
DESIGNATED RESPONDENT INTRODUCTION
He l l o , I m f r om SRBI , t he na t i ona l s t a t i s t i c a l r e s e a r c h or ga n-
i zat i on i n New Yor k Ci t y. We ar e conduct i ng a st udy f or t he Of f i ce of Technol ogy
Assessment of t he U. S. Congress on home audi o and vi deo t echnol ogy. The st udy
wi l l hel p t o i nf orm Congress about how t he publ i c uses home audi o and vi deo
t echnol ogy and t hei r at t i t udes about some pol i cy al t er nat i ves i n t he s e a r e a s .
Your a ns we r s wi l l be t r e a t e d a s s t r i c t l y c onf i de nt i a l .
Let me begi n by aski ng a f ew quest i ons about home vi deo t echnol ogy.
l a . Do you cur r ent l y have a vi deocasset t e r ecor der , a VCR, i n your househol d?
Yes. . . . . . . . . . . . . . .1 SKIP TO Q. 2
No. . . . . . . . . . . . . . ..2
Ref used/ Not Sur e. . 3
l b. Have you owned, bor r owed or r ent ed a VCR a t any t i me I n t he past mont h?
Yes. . . . . . . . . . . . . . .1 SKIP TO Q. 3
No. . . . . . . . . . . . . . . .2
Ref used/ Not Sur e. . 3
1c. Have you pur chased a pr er ecor ded vi deocasset t e, ei t her f or
your sel f or someone el se i n t he past year ?
Yes. . . . . . . . .1 SKI P TO Q. 8b, PAGE 6
No. . . . . . . . ..2 SKIP TO Q. 9, PAGE 7
Not sure. . . . 3 SKIP TO Q. 9, PAGE 7
Refused. . . . .4 SKIP TO Q. 9, PAGE 7
2. How many worki ng VCRs do you current l y have i n your househol d?
None. . . . . . . . . . .0
One. . . . . . . . . ...1
Two. . . . . . . . . . ..2
Thr ee or mor e. . 3
Refused. , . . . . . .4
IF UNDER 17 YEARS OLD, SKIP TO Q.
3. I n t he past mont h, on how many
Made a vi deot ape wi t h a home
9 (PAGE 7)
occasi ons have YOU ( RE AD
video camera, . .
Rented a videotape from a club or store. . . . .
Borrowed a videotape from a library. , . . . . . . .
Recorded a program from television. . . , . . . . . .
Copied a prerecorded videotape. . . . . . . . . . . . . .
Purchased a prerecorded videotape. . . . . . . . . . .
I TEM)?
None. . . 0 0 Not sur e. . . 99
None. . . 0 0 Not sur e. . . 99
None. . . 0 0 Not s ur e . . . 9 9
None. . . 0 0 Not sur e. . . 99
None. . . 0 0 Not sur e. . . 99
None. . . 0 0 Not sur e. . . 99
217
40. How many videotapes, i ncl udi ng bl ank vi deot apes, woul d you say t hat
you cur r ent l y have i n your househol d? Your be s t e s t i ma t e i s f i ne .
NUMBER VIDEOTAPES
None. . . . . . . . 00 SKI P TO Q. 8a
Not sur e. . . . 99
b. How many of t hese vi deot apes, i f any, wer e pur chased as pr er ecor ded
vi deot apes?
NUMBER PRERECORDED TAPES
None. . . . . . 00
Not sur e. . 99
c . How many vi deot apes do you have ( i n t he househol d) , i f any,
t hat were made wi t h a home vi deocamera?
NUMBER OF VIDEOCAMERA TAPES
None. . . . . . . . 00
Not sure. . . .99
d. How many vi deot apes do you have ( i n t he househol d) , i f any, t hat
cont ai n pr ogr ams r ecor ded f r om t el evi si on or copi ed f r om ot her t apes?
NUMBER OF HOMEMADE TAPES
None. . . . . . . . 0 0
Not sure. . . .99
5a. When was t he most recent t i me t hat you made or acqui red a vi deot ape,
not i ncl udi ng bl ank t apes?
Today. . . . . . . . . . . . . . . . . . . .0
Number of Days Ago. . . . . . .1
Number of Weeks Ago. . . . . .2
Number of Months Ago. , , ..3 RECORD ON FLYSHEET

Number of Years Ago, . . . . .4 RECORD ON FLYSHEET
.
Not sure. . . . . . . . . . . .5
Appen d i x BS u r vey Qu est i on n a i r e q 219
IF 12 MONTHS OR MORE IN Q. 5A, SKIP TO AUDIO SECTION, PAGE 7
5b. Was t hat a pr er ecor ded vi deot ape t hat you pur chased, a pr er ecor ded t ape
t hat someone el se purchased f or you, a pr ogr am t hat you r ecor ded f r om TV,
5C.
5d.
5e,
a vi deot ape t hat you copi ed, or a videotape someone made
Prerecorded t ape you purchased. . . . . . . . . . . 1 SKIP TO 6a
Pr er ecor ded t ape pur chased f or YOU. . . . . . . 2 SKI P TO 6a
Pr ogr am you r ecor ded f r om TV. . . . . . . . . . . . . 3
Tape you copied . . . . . . . . . . . . . . . . . . ........4 SKIP TO 6C
Tape made for you. . . . . . . . . . . . . . . . ........5 SKIP TO 6a
Videocamera tape (vol. ). . . . . . . . . . . . . . ....6 SKIP TO 6a
f or you?
Never have acqui r ed my own t ape. . . . . . . . . . 7 SKI P TO Q. 9, PAGE 7
Rented or borrowed (vol. ). . . . . . . . . . . . ....8 ERROR, REPEAT Q. 5a
Not sure. . . . . . . . . . . . . . . . . . . ........9 SKIP TO Q. 9, PAGE 7
What ki nd of pr ogr am wer e you r ecor di ng?
Di d you make t hat t ape t o keep or t o use onl y t empor ar i l y?
To keep. . . . . . . . . . . . .1
Use temporarily. . . . .2
Not sure. . . . . . . . .3
Di d you use a new bl ank t ape t o make t he recordi ng or di d
you t ape over anot her r ecor di ng?
New bl ank t ape. . . . . . 1
Taped over. . . . . . . . . .2
Not sure. . . . . . .3
6a. Not c ount i ng r e c or di ngs made f rom t el evi si on or home vi deocameras, have
you ever copi ed a vi deot ape ( pr er ecor ded or home r ecor ded) ei t her f or
your sel f or f or someone el se?
Yes. . . . . . . . . . . . . . .1
No. . . . . . . . . . . . . . ..2 SKIP TO Q. 8a
Not sure. . . . . 3 SKIP TO Q. 8a
6b. When was t he most recent t i me t hat you copi ed a vi deot ape,
ei t her f or your sel f or someone el se?
Today. . . . . . . . . . . . . . . . . . . .0
Number of Days Ago. . . . ...1
Number of Months Ago. . . . .3 RECORD ON FLYSHEET

Number of Years Ago. . . . ..4 RECORD ON FLYSHEET

Not sure. . . . . . . . . . . .5
IF 12 MONTHS OR MORE I N Q. 6B (5A I F NO 6B), SKI P TO Q. 7A
6C .
6d .
6e.
6f .
6g .
Were you maki ng t hat copy f rom a rent ed or purchased prerecorded t ape
or f rom a t ape t hat you or someone el se had made?
Rent ed or purchased t ape. . . . . . . . . . . . 1
Tape you/ someone el se had made. . . . . . 2
Not sure. . . . . . . . . . . . . , . . . , . ....3
Refused. . . . . . . . . . . . . . . . . . . . . ...4
Where di d you obt ai n t he t ape t hat you were copyi ng?
O w n original. . . . . . ........1
Family. . . . . . . . . . . . . . ......2
Friend/co-worker. . . . . . . . . .3
Public library. . . . . . . . . ...4
Vi deo r ent al cl ub/ st or e. . . 5
Ot h e r (S P E C I F Y)
..11
Not sure. , . . . . . . . . . . . . . . ..12
Di d you make t hat t ape t o keep or t o use onl y t empor ar i l y?
To keep. . . . . . . . . ....1
Use temporarily. . . . .2
Not sure. . . . . . .3
Di d you use a new bl ank vi deot ape t o make t he r ecor di ng or di d you
t ape over anot her r ecor di ng?
Ne w bl a nk . . . . . . . 1
Ta pe d ov e r . . . . . . 2
Not s ur e . . . . . 3
Why di d you copy i t ? Anyt hi ng el se?
6h. To t he best of your knowl edge, coul d you have purchased t hat on
pr er ecor ded t ape, i f you had want ed?
Yes. . . ........1
No. , , . . . . . . . . . 2
Not sure. . .3
Appendix BS urvey Questionnaire q 221
7a .
8 a .
I n t he pa s t y e a r , f rom about how many persons out si de of your househol d,
i f any, have you bor r owed vi deot apes?
NUMBER
None. . . . . . ..0 SKIP TO Q. 8a
Not sure. . .99
7 b. How of t e n, i f e v e r , do you borrow vi deot apes f rom persons out si de
of your househol d i n order t o copy t hem? Woul d you say at
.
l e a s t we e k l y , a t l e a s t mont hl y , a f ew t i mes a year , r ar el y or never ?
At least weekly. . . . . . .1
At least monthly. . . . , .2
Few times a year. . . . . .3
Rarely. . . . . . . . . . . . , ...4
Never. . . . . . . . . . , , . . ...5
Not sure. . . . . . . . . . . . . .6
Have you ever pur chased a pr er ecor ded vi deocasset t e t ape, ei t her f or
your sel f or someone el se?
Yes. . . . . . . . . . . . .1
No. . . . . . . . . . . . ..2 SKIP TO Q. 9, PAGE 7
Not sure. . . 3 SKIP TO Q. 9, PAGE 7
8b. When was t he most recent t i me t hat you purchased
v i de ot a pe , ei t her f or your sel f or someone el se?
IF ONE
Today. . . . . . . . . . . . . . . . . . . .0
Number of Months Ago. . . ..3
.
Number of Years Ago, . . . . .4
.
Not sure. . . . . . . . . . . . . .5
MONTH OR MORE IN Q. 8b, SKIP TO Q. 9
a pr er ecor ded
8c. How many prerecorded vi deot apes di d you purchase on
t hat occasi on?
NUMBER
Not sur e. . . 99
AUDIO SECTION
Now , we d l i ke t o change t o some quest i ons about musi c and home audi o t echnol ogy.
9 . H o w i m p o r t a n t a n a c t i v i t y t o you do you consi der l i st eni ng t o musi c - -
e x t r e me l y i mpor t a nt , qui t e i mpor t a nt , s l i ght l y i mpor t a nt , or not
a t a l l i mpor t a nt ?
Ext remel y i mport ant . . . . . . . . . . . . . . . 1
Qui te i mportant. . . . . . . . . . . . . . . . . . . 2
Sl i ght l y i mport ant . . . . . . . . . . . . . . . . 3
Not at al l i mpor t ant . . . . . . . . . . . . . 4
Not sure. . . . . . . . . . . . . . . . . . . . ..5
10. Dur i ng t he l ast seven days, approxi mat el y how much t i me di d you spend
l i st eni ng t o musi c on t he r adi o and t el evi si on?
.
HOURS MINUTES
None. . . . . . . 0
Not sure. . .99
11. Not i ncl udi ng musi c on r adi o and t el evi si on, approxi mat el y how much t i me
i n t he l ast seven days di d you spend l i st eni ng t o musi c on r ecor ds,
audi ot apes and CDs not i ncl udi ng backgr ound musi c i n publ i c pl aces
( e . g . , s t or e s , o f f i c e s , e l e v a t or s , ba r s ) .
HOURS MINUTES
None. . . . . . . 0
Not sure. . . 9 9
12a . Whi ch of t he f ol l owi ng t ypes of audi o equi pment do you
home or car. Do you have a (READ ITEM)?
- - - - - 1 2 a - - - -
Do
Have
a . Record player. . . . . . . . . . . . . . . . . . . . . . . 1
b. Casset t e t ape deck i n
a home stereo system. . . . . . . . . . . . . . . . 2
c . Casset t e t ape deck
in a car. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
d. Compact disk player . . . . . . . . . . . . . . . . . 4
e . Wal kman- t ype por t abl e
cassette player. . . . . . . . . . . . . . . . . , , . . 5
f . P o r t a b l e r a d i o / t a p e p l a y e r
(Including boom box). . . . . . . . . . . . . . . . 6
g. None of the above. . . . . . . . . . . . . . . . . . 7
h. Refused. .,..,.... . . . . . . . . . . . . . . . . . . 8
i. Not sure . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IF MORE THAN ONE ITEM HAVE" IN, Q. 12a ASK:
12b. Whi ch of t hese audi o syst ems or component s do you
t o l i st en t o musi c on r ecor ds, audi ot apes or CDS?
IF ANY CASSETTE PLAYER REPORTED IN Q. 12a ASK:
have i n your
Q. 12b
MOST
USED
1
2
3
4
5
6
7 SKIP TO Q. 14
8 SKIP TO Q. 14
9
use most f r equent l y

RECORD ABOVE.
72C. Do any of your casset t e t ape decks have t wo or mor e casset t e dr i ves
( dua l c a s s e t t e s ) ?
Y e s . . . . . . . . . . . . 1
No. . . . . . . . . . . . ..2 SKIP TO Q. 13
Not sure. . . . 3 SKIP TO Q. 13
12d. Do any of your casset t e recorders have a hi gh speed dubbi ng
or f a s t dubbi ng f e a t ur e ?
Yes. . . . . , . . . . . . .1
No. . . . , . . . , . . . . ,2
Not sure. . .3
13. How woul d you descri be t he sound qual i t y of your ( I TEM FROM Q. 12b)
- - woul d you say i t i s excel l ent , ver y good, good, f ai r or poor ?
Excellent. . . . . . . . ..1
Very good. . . . . . . . . .2
Good. . . . . . . ........3
Fair. . . . . . . . . . . . . . .4
Poor. . . . . . . ........5
Not sure. . . . . .6
14. How i mpor t ant i s I t t o you t o get hi gh qual i t y sound when you l i st en t o
music? I s I t e x t r e me l y I mpor t a nt , qui t e i mpor t a nt , s l i ght l y I mpor t a nt ,
or not a t a l l i mpor t a nt ?
Extremely important. . . . . . . . . .1
Quite important. . . . . . . . . . . ...2
Sl i ght l y i mpor t a nt . . . . . . . . . . . 3
No t a t a l l i mp o r t a n t . . . . . . . . 4
Not sure. . . . . . . . . . . . . . . .5
1 5 . Now, I d l i k e t o ge t y our opi ni on of t he s ound qua l i t y of di f f e r e nt t y pe s of
recorded musi c, based on your experi ence, what you ve read or what you have
been t ol d. Usi ng a scal e of 1 t o 7, wher e 1 means r eal l y poor sound qual i t y
and 7 means r eal l y excel l ent sound qual i t y, wher e woul d you r at e t he sound
q u a l i t y of ( RE AD I TE M)
ROTATE LIST
( ) Compact di sks
( ) LP r ecor ds
( ) 4 5 r e c or ds
( ) Pr e - r e c or de d
( ) Tapes copi ed
CDs
( ) Tapes copi ed
LP r ecor ds
( ) Tapes copi ed
pr e- r ecor ded
c a s s e t t e s
f r om
f r om
f r om
c a s s e t t e s
POOR
SOUND
1 2
1 2
1 2
1 2
1 2
1 2
1 2
3
3
3
3
3
3
3
4
4
4
4
4
4
4
5
5
5
5
5
5
5
EXCELLENT
SOUND
6 7
6 7
6 7
6 7
6 7
6 7
6 7
NOT
SURE
8
8
8
8
8
8
8

16. When was t he l ast t i me you l i st ened t o musi c on r ecor ds, audi ot apes,
or CDs, not i ncl udi ng r adi o or t el evi si on or backgr ound musi c I n
publ i c pl a c e s ( e . g. s t or e s , of f i c e s , e l e v a t or s , ba r s ) ?
Today, . . . . . . . . . . . . . . . . ..0
Number of Days Ago. . . ...1
Number of Weeks Ago. . . . . 2

Number of Mont hs Ago. . . . 3

Number of Year s Ago. . . . . 4

Not sure. . . . . . . . . . . . . . . .5
IF 12 MONTHS OR MORE IN Q. 16, SKIP TO Q. 29
17. What ki nd of musi c wer e you l i st eni ng t o t hat t i me?
1 8 . Whe r e we r e y ou l i s t e ni ng t o i t - - - a t home , i n t he c a r , a t a f r i e nd s ,
at wor k, at school or somewhere el se?
Home. . . . . . . . . . . . ..1
Car. . . . . . . . . . . . . . .2
Friends. . . . . . . . . . .3
Work. . . . . . . . . . . . . .4
School. . . . . .. .....5
Ot he r (S P E C IF Y )
. . 11
19. How many ot her persons, i f any, wer e l i st eni ng t o t he musi c wi t h you?
PERSONS
None. . . . . . . 0
Not sure. . .99
2 0 a , Wer e you l i st eni ng t o r ecor ds, audiotapes or CDs? MULTIPLE RECORD IF NECESSARY
IF ONLY ONE FORMAT RECORDED IN Q. 20a, SKIP TO Q. 20c
20b. Whi ch di d you l i st en t o l ast , on that occasi on? SI NGLE RECORD
20c. H OW many di f f er ent ( FORMAT I N Q. 2 0 a / b) di d y ou l i s t e n t o t ha t t i me ?
Q. 20a Q. 20b Q. 2 0 c
TYPES LAST NUMBER
LISTENED LISTENED LISTENED
Records. . . . . . . ..1 1
I
Tapes. . . . . . . ....2 2
I
RECORD ON FLYSHEET
CDs. , . . . . . . . . . . ,3 3
Not sure. . . . . . . .4 4 99
21. H O W l ong di d you l i st en t o (F O R M A T I N Q. 2 0 a / b) t ha t t i me ?
HOURS MINUTES
None. . . . . . . . . . . 0
Not sure. . . . ..99
2 2 . Wa s t h e ( r e c o r d / t a p e / C D) your s or someone el se s?
(I F MORE TH AN O N E, USE LAST LI STENED)
Yours. . . . . . . . . . . . .1
Someone elses. . . .2 SKIP TO 0.29
Dont recall. . . . . .3
23. How l ong had you had t hat recordi ng?
Less than a day. . . . . .0
Numbe r of Da y s . . . . . . 1
Number of Weeks . . . . .2
.
Number of Mont hs . . . . 3

Numbe r of Ye a r s . . . . . 4

Not sure. . . . . . . ,5
24a. How di d you obt ai n t hat ( r ecor d/ t ape/ CD) - - di d you buy i t , bor r ow i t ,
r e c e i v e i t a s a g i f t , make i t or somet hi ng el se?
Bought. . . . . . . . . . . . . . . . . . . . . . . . . ........1 SKIP TO Q.24d
Ot her househol d member bought ( vol . ) . . . 2 SKI P TO 0. 29
Borrowed. . . . . . . . . . . . . . . . . . . . . . .. . . . ....3 RECORD ON FLYSHEET
Given. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....4 RECORD ON FLYSHEET
Made. . . . . . . . . . . . . . . . . . . . . . . . . . . ........5 SKIP TO Q.25
Ot her ( SPECI FY)
. . . . . . . . . . . 11
IF AUDIOTAPE IN Q. 20a/b and BORROWED OR GIVEN IN Q.24a, ASK Q. 24b
ALL OTHERS SKIP TO Q.29
24b. Was t hat a pr er ecor ded audi o casset t e t hat someone
had purchased or an audi ot ape t hat someone had made?
Prerecorded casset t e purchased. . . . . 1
Audiotape someone had made. . . . . . . . . .2
Not sure. . . . . . . . . . . . . . . . . . . . . . . . . . ..3
24c. Who or wher e di d you get i t f r om?
Household member. . . . . . . . . . . ..,1 I
Other family. . . . . . . . . . . . . .....2 I
Friend/co-worker. . . . . . . . . . . . . .3 | => SKI P 10 Q. 29
Library . . . . . . . . . . . . . . . ........4 I
Store . . . . . . . . . . . . . . . . . ..,.....5 I
Other . . . . . . . . . . . . . . . . . .......11 |
25.
26a
24d. How much di d you pay f or i t ? Your be s t e s t i ma t e i s f i ne .
Less t han $5. . . . . . . . . . . . . 1 |
$ 5 - 9.99. . . . . . . ...,....2 I
$10 - 14. 99. . . . . . . . . . . . . . 3 | Q. 29
$15 - $ 1 9 . 9 9 . . . , . . . . . . . . . 4 I
$20 or more. . . . . . . . . . . . . . 5 I
Not sure. . . . . . . . . . . . . . . 6 |
Wher e di d you obt ai n t he musi c f or t hat t ape? MULTIPLE RECORD IF NECESSARY
Music on radio. . . . . . . . . , . . . . . . . . . . . . . . . . . .1
Music on TV. . . . . . , . . ..., . . . . . . . . . . ........2
Own pr er ecor ded r ecor d/ casset t e/ CD. . . . . . . . 3
Someone el se s r ecor d/ casset t e/ CD. . . . . . . . . 4
Tape you had made. . . , . . . . . . , . . . . . . . . . . . , . .5
Tape someone else had made. . . . . . . . ........6
Ot her ( SPECI FY)
. . . . . . . . . . . 12
Not sure. . . . . . . . . . . . . . . . . . . . . ~ . . . . . .13
Di d t he audi ot ape you made cont ai n one or more whol e LPs, casset t e al bums or
CDs?
Yes, whole LPs/albums/CDs. . . . , . . . .1
No. . . . . . . . . . . . . ., . . . . . . . . . . . . . , . ..2
Not sure. . . . . , . . . . , . . . . . . . . . . . .3
26b. Di d t he audi ot ape you made ( al so) cont ai n a mi xt ur e of sel ect i ons f r om
LPs, 4 5 s , casset t es or CDs?
Yes, mixture. . . . . . . . . . . . . . . . .1
No. . . . . . . . . . . . . . . . . . . . , . .....2
Not sure. . . . . . . . . , . . . . . .3
27. About how much of your per sonal t i me, i n al l , was t aken up i n
assembl i ng t he mat er i al s and maki ng t hat t ape?
HOURS MINUTES
None. . . . . , . . . 0
Not sure. . . , .99
28a. Do you r ecal l what gr ade of audi ot ape you used t o make t hat r ecor di ng?
Yes, recall. . . . . . . . . .1
No. . . . . . . . . . . . . . . ....2 SKIP TO Q. 29
Not sur e. . . . . . . . . . . 3 SKI P TO Q. 29
28b . What grade of t ape di d you use?
Nor ma l bi a s / f e r r i c ox i de / Ty pe I . . . . . . . . 1
Hi gh bi a s / c hr ome / Ty pe II. . . . . . . . .. .....2
Me t a l tape/Type IV. . . . . . . . . . . . . ........3
Ot her ( SPECI FY)
. . . . . . . . . . . . . 4
Not sure. . . . . . . . . . . . . . . . . . . . . . . ........5
29. Peopl e have di f f er ent t ypes of audi o r ecor di ngs. We d l i ke t o know a
l i t t l e about t he t ypes of r ecor di ngs t hat you own. Approxi mat el y how
many (ITEM) do you own:
RANGE NOT
NONE 1 - 1 0 1 1 - 2 5 2 6 - 5 0 5 1 - 1 0 0 1 0 0 + S URE
a . Compact disks. . . . . . . . . . . . . 1 2 3
1~
5 6 7
b. 45 Records. . . . . . . . . . . . . . . . 1 2 3 4 5 6 7
c . LP Records. . . . . . . , . . . . . . . . 1 2 3 4 5 6 7
d. Audiotapes. ......, . . . . . . . . 1 2 3 4 5 6 7
I F NO AUDI OTAPES I N Q. 29d, SKI P TO Q. 30a
Of t he audi ot apes you own, how many are:
e . Pr e- r ecor ded
audiocassettes. . . . . . . . . . 1 2 3 4
f . Audi ot a pe s t ha t
you have made, . . . . . . . . . . 1 2 3 4
5 6 7
5 6 7
9
Audiotapes someone
else made for you. . . . . . . 1 2 3 4 5
6
7
I F BOUGHT
W
I N Q. 24a, SKI P TO Q. 30b
30a. Have you ever purchased a record, pr er ecor ded audi ocasset t e or CD?
Yes. . . . . . , .1
No. . . . . . . . .2 SKIP TO Q. 38a
Not sure. . .3 SKIP TO Q. 38a
30b. When was t he l ast t i me you purchased a r e c o r d , pr e r e c or de d a udi o-
casset t e or CD?
Today, . . . . . . . . . . . ........0
Number of Days Ago. . . . . . . 1
Number of Weeks Ago. . . . . . 2
Number of Months Ago. . ...3 RECORD ON FLYSHEET

Number of Year s Ago. . . . . . 4 RECORD ON FLYSHEET

Not sure. . . . . . . . . . . ,5
IF 12 MONTHS OR MORE IN Q. 30B, SKIP TO Q. 38A
31. What di d you buy on t hat occasi on? How many?
Prerecorded audiocassettes. . . . . .1 None. . . . .00 Not sure. .99 RECORD ON FLYSHEET
LP records. . . . . . . . . . . . . . . . . . ....2 None. . . . . 0 0 Not s ur e . . 9 9
45 records. . . . . . . . . . . . . . . . . . ....3 None. . . . . 0 0 Not s ur e . . 9 9
CDs. . . . . . . . . . . . . . . . . . . . . ........4 None. . . . . 0 0 Not s ur e . . 9 9
Not sure. . . . . . . . . . . . . . . . . . . . . . . .5
32. What ( was/ wer e) t he title of t he r ecor di ng( s) you pur chased and t he name
of t he per f or mer or gr oup? IF MORE THAN THREE, ASK FOR THE FIRST THREE.
ITEM 1 ITEM 2 ITEM 3
TI TLE:
PERFORMER/GROUP:
.
Not sure. . . . . . . . . . , . . 0 0 0
33. Was t he r ecor di ng of ( I TEM) on r ecor d, audi ocasset t e or CD?
Record . . . . . . . . . . . . . . 1 1 1
Cassette . . . . . . . . . . . . 2 2 2
CD. , . . . . . . . . . . . . . . . . 3 3 3
Not sure. . , , . . . 4=>Q. 37a 4=>Q. 37a 4- >Q. 37a
34a. How much di d you pay f or i t ? Your be s t e s t i ma t e i s f i ne .
Le s s t ha n $ 5 . . . . . . . . . . 1 1 1
$ 5 - 9. 99. . . . . . . . . . . . 2 2 2
$ 1 0 - 14. 99. . . . . . . . . . . . 3 3 3
$15 - 19. 99. . . . . . . . . . . . 4
$20 or more. . . . . . . . . . ,5
4 4
5 5
Not sure. . . . . . . . . . . . .6 6 6
34b. At t he t i me you bought t hi s ( r ecor d/ casset t e/ CD) di d you expect
t o t a pe f r om i t ?
Yes. . . . . . . . . . . . . . . . . 1 1 1
No. . . . . . . . . . . . . . . . . . 2 2 2
Not Sure. . . . . . 3 3 3
34C. Have you made a t ape f r om t hi s ( r ecor d/ casset t e/ CD) ?
Yes. . . . . . . . . . . . . . . . . 1 1 1
No. . . . . . . . . . . . . . . . . . 2 2 2
No t S u r e . , . . . , 3 3 3
35. Before buying ( ITEM) , had you ever hear d sel ect i ons f r om
t he r ecor di ng or by t he per f or mer bef or e?
Yes. . . . . . . . . . . . . . . . ...1
No. . . . . . . . . . . . . . . . . . . .2=> Q.37a
Not sure. . . . . . . . . .3=> 0.370
36. Bef or e buyi ng i t , h a d y ou he a r d t he
ROTATE LIST
( ) Ra di o or t e l e v i s i on. . . . l
( ) L i v e c o n c e r t s . . . . . . . . . . 2
( ) Recor ds, pr er ecor ded
cassettes or CDs. . . . .3
( ) Tapes made by
y ou or ot he r s . . . . . . . . 4
1 1
2- > Q. 37a 2=> Q. 37a
3=> Q. 37a 3=> Q. 37a
r ecor di ng or t he per f or mer on:
1
2
3
4
1
2
3
4
IF ONE MONTH OR MORE AGO IN Q. 30b, SKIP TO Q. 37e
37a. Not count i ng t he pur chase t hat you j ust t ol d me about , when was t he next
most recent t i me you purchased a record, pr er ecor ded casset t e or CD?
Today. . . . . . . . . . . . ........0
Number of Mont hs Ago. . . . . 3 RECORD ON FLYSHEET


Not sure. . . . . . . . . . . .5
IF 12 MONTHS OR MORE IN Q. 37a, SKIP TO Q. 37e
37b. What di d you buy on t hat occasi on? How many?
NUMBER
Pr er ecor ded cassettes. . . . . . . .1 None. . . . . 0 0 No t s u r e . . 99 RECORD ON FLYSHEET
.
LP records. . . . . . . . . . . . . . . . . ..2 None. . . . 0 0 Not s ur e . . 9 9
45 records. . . . . . . . . . . . . . . . . . .3 None. . . . . 00 Not s ur e . . 9 9
CDs. . . . . . . . . . . . . . . . . . . . . .....4 None. . . . . 00 Not s ur e . . 9 9
Not sure. . . . . . . . . . . . . . . . . . . . .5
IF ONE MONTH AGO OR MORE IN Q.37a, SKIP TO Q. 37e
37c. On how many occasi ons, i n al l , have you pur chased a r ecor d, pr e-
r ecor ded casset t e or CD i n t he past mont h?
IF ONLY TWO, SKIP TO Q. 37e
Not sure. . . . . . . . . . . . . . . . . .99
Appen d i x BS u r vey Qu est i on n a i r e .231
37d. Dur i ng t he past mont h, how many ( I TEM) woul d you est i mat e
t hat you have purchased?
NUMBER
Pr e r e c or de d c a s s e t t e s . . . . . . . . ; None. . . . . 00 Not s u r e . . 9 9
LP records. . . , . . . . . . . . . . . . . . . .2 None. . . . . 0 0 Not s ur e . . 9 9
45 records. . . . . . . . . . . . . . . . . . . .3 None. . . . . 0 0 Not s ur e . . 9 9
CDs. . . . . . . . . . . . . . . . . . . . . ......4 None. . . . . 0 0 Not s ur e . . 9 9
-
IF PRERECORDED CASSETTES PURCHASED IN Q. 31 OR Q. 37b, SKIP TO Q. 38a
37e. When was t he l ast t i me t hat you pur chased a pr er ecor ded audi ocasset t e?
Today. . . . . . , . , . . . . . . . . . . .0
Number of Days Ago. . , . ...1
Number of Weeks Ago. . . . ..2
Number of Months Ago. . . . .3
.
Number of Years Ago. . . . . ,4
.
Not sure. . . . . . . . . . . . . .5
Never. . . . . . . . . , . . . . . . .6
38a. Has anyone ever gi ven you a record, audi ot ape or CD as a gi f t ?
Yes.. .....1
No. . . . . . . . .2 SKIP TO Q. 40
Not sure. . . 3 SKIP TO Q. 40
38b. When was t he l ast t i me t hat someone gave you one as a gi f t ?
Today. . . . . . . . . . . . . . . . . . . ,0
Number of Months Ago. . . . .3 RECORD ON FLYSHEET

Number of Years Ago. . . . . .4 RECORD ON FLYSHEET

Not sure. . . . . . . . . . . . . .5
IF 12 MONTHS OR MORE IN Q. 388, SKIP TO Q. 38E
38c. What di d you r ecei ve on t hat occasi on? How many?
NUMBER
Pr er ecor ded audi ocasset t e. . 1 None. . . . . 0 0 No t s u r e . . 99 RECORD ON FLYSHEET
Home made audiotape, . . . . . . .2 None. . . . . 00 Not sur e. . 99
LP records. . . . . . . . , . . . . ....3 None. . . . . 00 Not sur e. . 99
45 records. . . . . . . . . . . . . . ...4 None. . . . . 00 Not sur e. . 99
CDs. . . . . . . . . . . . . . . . ........5 None. . . . 00 Not sur e. . 99
Not sure. . . . . . . . . . . . . . . . . . .6
IF ONE MONTH OR MORE IN Q. 38b, SKIP TO Q. 38e
38d. Dur i ng t he past mont h, on how many occasi ons, i n al l , di d you
r e c e i v e a r e c or d, audi ot ape or CD as a gi f t ?
NUMBER
No others. . . . 0 0
Not s ur e . . . . . 9 9
IF PRERECORDED CASSETTE TAPES REPORTED IN Q. 38c, SKIP TO Q. 40
38e. When was t he most r ecent t i me, i f ever , t hat you r ecei ved a
pr er ecor ded audi ocasset t e as a gi f t ?
Today. . . . . . . . . . . . ........0
Number of Days Ago. . . . . . . 1
.
Number of Mont hs Ago. . . . . 3
.
Number of Year s Ago. . . . . . 4

Not sure. . . . . . . . . . . . . .5
Never. . . . . . . . . . . . . . . . .
4 0 . I n t he pa s t y e a r , have you used an audi o recorder t o t ape musi c f rom
e i t he r r a di o, t e l e v i s i on, r e c or ds , t a pe s or CDs ?
Yes. . . . . . . . . . . .1
No. . . . . . . . . . . . . 2
Not sur e. . , . . 3
410. I n t he pa s t y e a r , have you used an audi o r ecor der t o t ape anyt hi ng el se
at home, i nc l udi ng v oi c e s , answeri ng machi ne messages and di ct at i on?
Yes. . . . , . . . . . . .1
No. . . . . . . . . . . . .2 SKIP TO Q. 43a
Not sure. . . . . 3 SKIP TO Q. 43a
Appen d i x BS u r vey Qu est i on n a i r e. 233
41b. Whi ch, i f any, of t he f ol l owi ng t hi ngs have you r ecor ded i n t he past year ?
( I NT E R V I E WE R : CODE ONLY YES ANSWERS)
a .
b.
c .
d.
e .
f .
g.
h.
i .
j .
Yes
Family member voices. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .....1
Musi c per f or med by you, f ami l y member s, or f r i ends. . . . . 2
Speci al occasi ons, l i k e bi r t hda y s a nd we ddi ngs . . . . . . . . . 3
Telephone answering machine messages. . . . . . . . . . . ........4
L e t t e r s , messages and reports for work or school . . . . . . . 5
Messages or instructions for others. . . . . . , . . . . . . . . . . . . .6
Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Lect ur es, classes or sermons. . . . . . . . . . . . . . . . . . . . . . . . . . .8
Dictation for home or office. . . . . . . . . . . . . . . . . . . . . . . . ...9
None of the above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
I F NO YES" I N Q. 41b, SKI P TO Q. 43a
41c. When was t he l ast t i me you made a r ecor di ng of ( t hi s/ any of t hese) t ype?
Today. . . . . . . . . . . . ........0
Number of Days Ago. . . ....1
Number of Weeks Ago. . ....2

Number of Year s Ago. . . . . . 4

Not sure. . . . . . ......5
IF 12 MONTHS OR MORE I N Q. 41c, SKI P TO Q. 43a
41d. Do you r ecal l what gr ade of audi ot ape you
Yes, recall. . . . . . . . . .1
No.. . . . . . . . . . . . . . ....2 SKIP TO Q. 41f
Not sur e. . . . . . . . . . . 3 SKI P TO Q. 41f
41e. What grade of t ape di d you use?
RECORD ON FLYSHEET
RECORD ON FLYSHEET
used t o make t hat r ecor di ng?
Nor ma l bi a s / f e r r i c ox i de / Ty pe I . . . . . . . . 1
Hi gh bi as/ chrome/ Type I I . . . . . . . . . . . . . . . 2
Metal tape/Type IV. . . . . . . . . . . . . ........3
Ot her ( SPECI FY)
. . . . . . . . 4
Not sure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..5
41f . Di d you use a 30 mi nut e, 60 mi nut e, or 90 mi nut e t ape?
30 minute. . . . . . ........1
60 mi nut e. . . . . . . . . . . . . . 2
90 minute. . . . . . . . . . . ...3
Ot her ( SPECI FY)
. . 4

Not sure. . . . . . . . . . . . . .5
IF ONE MONTH OR MORE IN Q. 41c, SKIP TO Q. 43a
42. Dur i ng t he past mont h, on how many occasi ons, i n al l , have you
made an audi o recordi ng of any of t hese ki nds?
OCCASIONS
None. . . . . . . . 0
Not sure. . . .99
43a. Have you ever made an audi ot ape of musi c f r om r adi o or t el evi si on?
Yes. ......1
No. . . . . . ..2 SKIP TO Q. 44a
Not sure. . 3 SKIP TO Q. 44a
43b. When was t he most recent t i me t hat you made an audi ot ape
of musi c f r om r adi o or t el evi si on?
Today. . . . . . . . . . . . . . . . . . . .0


Not sure. . . . . , . . . . . .5
IF 12 MONTHS OR MORE IN Q. 43b, SKIP TO Q. 44a
43c. How many di f f erent t apes di d you make on t hat occasi on?
Number
Not sure. . . .99
IF MORE THAN ONE TAPE MADE, ASK ABOUT LAST TAPE MADE
43d. Di d you use a 30 mi nut e, 60 mi nut e, or 90 mi nut e t ape?
3 0 minute. . . . . . ........1
60 minute. . . . . . . . . . . . . .2
90 mi nut e. . . . . . . . . . . . . . 3
Ot her ( SPECI FY)
. . . . 4
Not sure. . . . . . . . . . . . , .5
43e. Were you t api ng one or more whol e al bums or were you t api ng
si ngl es or sel ect i ons f r om al bums, or bot h?
Whole album. . . . . . . . . . . . . ..1
Se l e c t i ons or s i ngl e s . . . . . 2
Both. . . . . . . . . . . . . . . . . . . . . .3
Musi c vi deo ( vol . ) . . . . . . . . 4
Te l e v i s e d c onc e r t ( v ol . ) . . 5
Ot he r (S PE C I F Y)
. . 6
Not sure. . . . . . . . . . . . . . . . . .7
43f . Di d you make t hat t ape t o keep or t o use onl y t empor ar i l y?
To keep. . . . . . . . . . . . 1
Use temporarily. . . .2
Not sure. . . . . .3
43g. Di d you use a new bl ank audi ot ape t o make t he recordi ng or di d you
t ape over anot her r ecor di ng?
New blank. . . . . .1
Taped over. . . . . .2
Not sure. . . . .3
IF ONE MONTH OR MORE SINCE MOST RECENT TAPING IN Q. 43b, SKIP TO Q. 44a
43h. Duri ng t he past mont h, on how many occasi ons, i n al l , have y o u
made audi ot apes of musi c f r om r adi o or t el evi si on?
OCCASIONS
Not sure. . .99
No other. . . 00
44a. Have you ever t aped musi c f rom a record, pr er ecor ded audi ocasset t e or CD?
Yes. . . . . . .1
No. . . . . . ..2 SKIP TO Q. 54, PAGE 31
Not sure. . 3 SKIP TO Q. 54, PAGE 31
44b. When was t he most recent t i me t hat you t aped musi c f rom a record,
pr er ecor ded audi ocasset t e or CD?
Today. . . . . . . . . . . . . . . . . . . .0
Number of Days Ago. . . ....1
.
Number of Year s Ago. . . . . . 4 RECORD ON FLYSHFET

Not sure. , . . . . . . . , . . .5
I F 12 MONTHS OR MORE IN Q. 44b, SKIP TO Q. 54
44c . How many di f f erent t apes di d you record ont o on t hat occasi on?
NUMBER
Not sur e. . . . 99
IF MORE THAN ONE TAPE IN Q. 44c, ASK ABOUT THE LAST TAPE.
44d. Were you t api ng one or more whol e LPs, casset t e al bums or C D s ?
Yes. . . . . . . . . ........1
No. . . . . . . . . . . . . . . . .,2 SKIP TO Q. 44k
Not sure. . . . . . . 3 SKIP TO Q. 44k
IF ANY WHOLE RECORDS, TAPE ALBUMS OR CDS COPIED, ASK:
44e. How many complete LPs, casset t es al bums or CDs di d you copy ont o
t ha t t a pe ?
One. . . . . . . . . . . . 1
Two. . . . . . . . . ...2
Three. . . . . . . . . .3
Not sure. . . ,4
ASK FOR EACH REPORTED IN Q. 44e
44f . What ( was/ wer e) t he t i t l e of t he al bums( s) you t aped and t he name
of t he per f or mer or g r o u p ?
TI TLE:
- - - . .
PERFORMER:
Not sure. . . . . . . . . .
44g. Was t he r ecor di ng of ( I TEM) on r ecor d, pr er ecor ded casset t e or CD?
Record . . . . . . . . . . . . . . 1 1 1
Pr er ecor ded casset t e. . 2 2 2
CD. . . . . . . . . . . . . . . . . . 3 3 3
Not sure. . . . . . . . . . 4 4 4
44h. Wher e di d you get t he ( r ecor d/ pr er ecor ded casset t e/ CD) t hat you made
t he t ape f r om? Di d you own i t , di d you bor r ow i t f r om member s or a
member of your househol d, anot her f ami l y member , a f r i end o
r
somewhere el se?
Own original . . . . . . . . . 1 1 1
Household member . . . . . 2 2 2
Other family . . . . . . . . . 3 3 3
Friend. . . . , . . . ........4 4 4
Ot h e r (S P E C I F Y)
4 4 i . Di d y ou g e t t h e l y r i cs or l i n e r not e s t o t he r e c or di ng f r om a ny pl a c e ?
Yes. . . . . . . . . . . . . . . . . . .1 1 1
No. . . . . . . . . . . . . . . . . . . .2=>Q.44k 2=>Q. 44k 2=>Q. 44k
4 4 j . Where di d you get t hem?
44k. Wer e you ( al so) t api ng sel ect i ons f r om LPs, si ngl es, casset t es, or
CDs ont o t hat t ape?
Yes. . . . . . . . , . . , . . . .1
No. . . . . . . . . . . . . . . ,.2 SKIP TO Q. 45a
Not sure, . . . . , . 3 SKIP TO Q. 45a
441. I n t a p i n g t h e s e s e l e c t i o n s , how many (RE AD I TEM) di d you use?
45 Records. . . . . . . . . . . . . .
/
Not sure. , .99
LP Records. . . . . . . . . . . . . .
/
Not sure. . .99
CDs. . . . . . . . . . . . . . . . . . . . .
/
Not sure. . . 9 9
Pr e- r ecor ded
audio cassettes. . . .
/
Not sur e. . . 99

Home - ma de a udi o t a pe s . . .
/
Not sur e. . . 99
44m. Wher e di d you get t he or i gi nal ( r ecor ds/ t apes/ CDs) t o make t he t ape?
Did you own them, bor r ow t hem f r om member s of your househol d,
anot her f ami l y member, a f r i end or di d you get i t somewher e el se?
RECORD ALL THAT APPLY
Own original . . . . . . . . . 1
Household member . . . . . 1
Other family . . . . . . . . . 1
Friend. . . . . . . . ........1
Ot h e r ( S P E CI FY )
. . . . 1
45a. Wer e you maki ng t he t ape( s) f or your sel f , anot her member of
your househol d or someone el se?
Your s e l f . . . . . . . . . . . 1
Househol d member . . . 2 SKI P TO Q. 45c
Someone else. . . . . . .3 SKIP TO Q. 45c
45b. Di d you make t hat t ape t o keep or t o use onl y t empor ar i l y?
45c.
45d.
45e.
To keep. . . . . . . . . . . . . . , .1
Use temporarily. . . . . . . .2
Not sure. . . . . . . . . .3
Di d you use a new bl ank audi ot ape t o make t he recordi ng or di d you t ape
over anot her r ecor di ng?
Ne w bl a nk . . . . . . . 1
Ta pe d ov e r . . . . . , 2
Not s ur e . . . . . . 3
Di d you use a 30 mi nut e, 60 mi nut e, or 90 mi nut e t ape?
30 minute. . . . . . . . . , . . . .1
60 minute. . . . . . . . . . . . ..2
90 minute. . . . . . . . . . . . . .3
Ot her ( sPECI FY)
. . . . 4
Not sure. . . . . . . . . . . . . .5
Do you r ecal l what gr ade of t ape you used t o make t hat r ecor di ng?
Yes, recall. . . . . . , . . .1
No. . . . . . . . . . . . . . . . . . .2 SKIP TO Q. 45g
Not sure. . . . . . . , . . .8 SKIP TO Q. 45g
Appen d i x B-S u r vey Qu est i on n a i r e .239
45f . What grade of t ape di d you use?
Normal bias/ferric oxide/Type I. . . . . . . .1
Hi gh bi as/ chrome/ Type I I . . . . . , . . . . . . . . . 2
Metal tape/Type IV. . . . . . . . . . . . . . . . . . . . .3
Ot her ( SPECI FY)
Not
45g. About how
. . . . . . . . . 4
sure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
much of your per sonal t i me, i n al l , was t a k e n up i n
assembl i ng t he mat er i al s and maki ng t he t ape?
HOURS MINUTES
None. . . . . . . . . .0
Not sure. . . . .99
45h. Why di d you copy t he recordi ng? Anyt hi ng el se?
4 5 i . To t he best of your knowl edge, coul d you have purchased a record,
pr er ecor ded casset t e or C D wi t h t he same mat eri al , i f you had w a n t e d ?
Yes. . . . . . . . . . . . . .1
No. . . . . . . . . . . . . . .2 SKIP TO Q. 450
Not sure. . . .3
240 q Copyright and Home Copying: Technology Challenges the LAW
45j . Whi ch of t he f ol l owi ng concer ns, i f any, wer e al so i mpor t ant
f act or s i n your r eason f or maki ng t hi s t ape?
I mpor t ant Not I mpor t ant Not Sur e
READ THOSE NOT VOLUNTEERED IN Q. 45h
( )1. Y o u wa nt e d t o pr ot e c t y our
ori gi nal s from damage or wear. . . . . . . .1
( ) 2. You wa nt e d t o be a bl e t o
pl ay t he r ecor di ng on a t ape pl ayer . . 1
( ) 3 . You wa nt e d t o ge t be t t e r qua l i t y
sound . . . . . . . . . . . . . . . . . . . . . . . ........1
( ) 4. I t was l ess expensi ve t han
purchasi ng t he recordi ng. . . . . . . . . . . . . 1
( ) 5. You want ed a l onger pl ayi ng t i me. . . . . 1
( ) 6. You want ed t o cr eat e a cust omi zed
selection of music. . . . . . . . . . . . . . . . . . .1
( ) 7. Buyi ng t he pr er ecor ded musi c
was inconvenient for you. . . . . . . . . . . . .1
( ) 8. You al r eady had a copy of t he
musi c i n prerecorded f orm and
di dn t want t o buy anot her . . . . . . . . . . . 1
( )9. The pur c ha s e pr i c e wa s hi ghe r
t han you wer e wi l l i ng t o pay
for that recordi ng. . . . . . . . . . . . . . . . . . . 1
2
2
2
2
2
2
2
2
2
3
3
3
3
3
3
3
3
3
45k. To t he best of your knowl edge, how much do you t hi nk i t woul d have
cost t o buy t hat t hat mat er i al on r ecor d, pr er ecor ded casset t e or CD?
Less than $5. . . . . . . . . . . . .1
$ 5 - 9.99. . . . . . . ........2
$10 -14. 99. . . . . . . ........3
$15 - 19. 99. . . . . . . . . . . . . . . 4
$20 or more. . . . . . ........5
Not sure. . . . . . . . . . . .6
451. I f you had not been abl e t o make t hat t ape, do you t hi nk t hat you
woul d have pur chased ( t hat r ecor di ng/ anot her copy of t hat r ecor di ng)
or not ?
Woul d have pur chased. . . . . . 1 SKIP TO Q. 45n
Would not. . . . . , . . . . . . . . . ..2
Not sur e. . . . . , . . . . . . , 8 SKI P TO Q. 450
Appen d i x BS u r vey Qu est i on n a i r e . 241
45m. Why not?
SKIP TO Q. 450
45n. I f you had bought t hat r ecor di ng, woul d i t have been i n addi t i on
t o ot her r ecor di ngs you have pur chased, or i n pl ace of ot her
recordi ngs you purchased?
I n a d d i t i o n . . . . . . . . . 1
I n pl ace. . . . . . . . . . . . 2
Not sure. . . . . . . . .3
450. To avoi d maki ng i t your sel f , woul d you have been wi l l i ng t o pay someone
el se t o make t hat t ape f or you?
Yes. .. ......1
No. . . . . . . . . . 2 SKI P TO Q. 46a
Not sur e. . 3
45p. I n t ha t c a s e , what i s t he most t hat you woul d have been
wi l l i ng t o pay someone t o make t hat t ape f or you, not
count i ng t he cost of t he bl ank t ape?
$

None. . . . . . . . . . . . . . . . . . . . 0
Not sure. . . . . . . , . . . . . . . .999
IF ONE MONTH. OR MORE AGO IN Q. 44b, SKIP TO Q. 47a
46a. Not count i ng t he t i me you j ust t ol d me about , when was t he next most r ecent
t i me t hat you made an audi ot ape f rom a record, pr er ecor ded casset t e or CD?
Today, . . . . . . . . . . . . . . . . . . .0

Number of Years Ago. . . . . .4

Not sure. . . . . . . . . . . .5
IF ONE MONTH OR MORE IN Q. 46a, SKIP TO Q. 47a
46b. Dur i ng t he past mont h, on how many occasi ons, i n al l , di d you
make an audi ot ape f rom a record, pr er ecor ded casset t e or CD?
NUMBER OF TAPING OCCASIONS

Not sur e. . . 99
47a. I n t he pa s t y e a r , f rom about how many persons out si de of your househol d,
i f any, have you bor r owed r ecor ds, prerecorded casset t es or CDs?
None. . . . . . 00 SKI P TO Q. 4 8
Not sur e. . 99
47b. How of t en, i f ever , do you bor r ow r ecor ds, t apes or CDs f r om per sons
out si de of your househol d i n or der t o make copi es? Would you say
. .
t hat you do t hat at l east weekl y, at l east mont hl y, onl y f ew t i mes a
year , r ar el y or n e v e r ?
Weekly. . . . . . . . . ........1
Monthly. . . . . . . . ........2
Fe w t i me s a y e a r . . . . . . . 3
Rarely. . . . . . . . . ........4
Never. . . . . . . . . . . . . . ....5
Not sur e. , . . . . . . . . 6
47c. Do you bel ong t o any musi c swap cl ubs?
Yes. . . . . . . . .1
No . . . . . . . . . . 2
Not sure. . . .3
IF UNDER 17 YEARS OLD, SKIP TO Q. 54
Peopl e t ape f r om r ecor ds, pr er ecor ded
(PAGE 31)
casset t es and CDs f or many reasons. They
may make i ndi vi dual t apes f or mare t han one reason. I m goi ng t o ment i on some
reasons why peopl e somet i mes t ape and ask i f t hey are among t he reasons why
you have made tapes.
RANDOM START Q. 48 TO Q. 53
( ) 48a. Some peopl e t ape sel ect i ons f r om sever al r ecor ds, casset t es or CDs t o
creat e t hei r own cust omi zed program of musi c on t ape. Have you ever made
a t a pe , ma i nl y f or t hi s r e a s on?
Ye s . . . . . . . . 1
No. . . . . . . . .2 SKIP TO 49a
Not sure. . .3
48b. When was t he l ast t i me you made a t ape mai nl y f or t hi s reason?
T o d a y . . . . . . . . . . 0
Days ago. . . . . . .1
Weeks ago. . . . . .2
Months ago. . . ..3

Years ago. . . . . .4

Not sur e. . 5
IF ONE MONTH OR MORE IN Q. 48b, SKIP TO Q. 49a
c . How many times in the past month have you made a tape
mai nl y f or t hi s r eason?
NUMBER
Not sur e. . . 99
Appen d i x BS u r vey Qu est i on n a i r e . 243
( ) 4 9 0 . Some peopl e make t apes of t hei r own r ecor ds, casset t es and CDs, i n or der
t o pr ot ect t he or i gi nal s f r om damage and keep t hem f r om wear i ng out .
Have you ever made a t ape of a record, casset t e or CD t hat you owned
Yes. . ......1
No. . . . . . . . .2 SKIP TO 50a
Not sure. . . 3 SKIP TO 50a
Today . . . . . . . . . . 0
Days ago. . . . . . . 1
Weeks ago. . . . . . 2
Months ago. . . . . 3

Years ago. . . . . . 4

Not sure. . .5
4 9 c . How many times in the past month have you made a tape
NUMBER
Not sure. . . . .99
( ) 5 0 0 . Some peopl e make t apes of t hei r own r ecor ds, casset t es and CDs, so t h a t
t hey can pl ay t hem i n t hei r car , Wal kman or el sewher e. Have you ever
made a t ape of a record, casset t e or C D t hat you owned mai nl y f or t hi s
reason?
Yes. . . . . . . .1
No. . . . . . . . .2 SKIP TO 51a
Today . . . . . . . . . . 0
Days ago. . . . . . . 1
Weeks ago... . . . 2
.
Years ago. . . . . . 4

Not sure, . .5
50c. How many times in the past month have you made a tape
NUMBER
Not sure. . .99
( ) 5 1 a . Some peopl e make t apes of t hei r f r i ends r ecor ds, casset t es and CDs so
t hat t hey don t have t o buy t he m. Have you ever made a t ape mai nl y
f or t hi s r e a s on?
Yes. . . . . . . . 1
No. . . . . . . . .2 SKIP TO 52a
Not sur e. . . 3
Today . . . . . . . . . . 0
Days ago. . . . . . . 1
Weeks ago. . . . . . 2

Years ago. . . . . . 4

Not sure. . .5
c . How many times in the past month have you made a tape
NUMBER
Not sure. . . . 9 9
( ) 52a. Some peopl e make t apes of ot her peopl e s r ecor ds, casset t es and CDS
t ha t t he y woul d l i k e t o l i s t e n t o, but pr obabl y woul d not buy.

Have you ever made a t ape mai nl y f or t hi s reason?
Yes. . . . . ...1
No. . . . . . . . .2 SKIP TO 53a
T o d a y . . . . . , . . . . 0
Days ago. . . . . . . 1

Weeks ago. . . . . . 2

Years ago. . . . . . 4

Not sure. . .5
52c. How many t i mes i n t he past mont h have you made a t ape
mai nl y f or t hi s r e a s o n ?
NUMBER
Not sure. . .99
Appen d i x B-S u r vey Qu est i on n a i r e q 245
( ) 5 3 0 . Some peopl e make t apes of recordi ngs because t hey t hi nk t hey can get
b e t t e r qua 1 it y sound from a tape they make compared to one
t hey coul d buy. Have you ever made a t ape mai nl y f or t hi s reason?
Yes. . . . . . . .1
No. . . . . . . . .2 SKIP TO 54
Not sur e. . . 3
53b. When was t he l ast t i me you made a t ape mai nl y f or t hi s r eason?
Today . . . . . . . . . . 0
Days ago. . . . . . . 1
Weeks ago. . . . . . 2

Years ago. . . . . . 4

Not sure. . .5
IF ONE MONTH OR MORE, SKIP TO Q. 54
53c. How many times in the past month have you made a tape
NUMBER
N ot sure. . .99
54. I am goi ng t o r ead you some t hi ngs t hat peopl e somet i mes do. For each, I d
l i ke t o know how accept abl e you woul d f eel t hi s act i on t o be. Usi ng a scal e
of 1 to 7, wher e 7 means t hat t he act i on i s p e r f e c t l y a c c e pt a bl e t o do i n your
opi ni on and 1 means t hat t he act i on i s not at al l accept abl e t o do, how woul d

( )a.
( )b.
( )C.
( )d.
( )e.
y o u r a t e t he a c c e pt a bi l i t y t o y ou
on t hat ?
No t a t a l l
Accept abl e
t o do
Maki ng a t aped copy
own use of a r ecor d, casset t e

or CD that you own . . . . . . . . . . 1
Maki ng a t aped copy t o gi ve
t o a f r i e nd of a r e c or d,

casset t e or CD t hat you own. . 1
Maki ng a t aped copy t o sel l

of a r e c or d, c a s s e t t e or
CD that you own. . . . . . . . . . . . . . 1
Maki ng a t aped copy f or your
o w n use of a compl et e
r ecor d, casset t e or CD t hat
you borrowed . . . . . . . . . . . . . . . . . 1
Maki ng a t aped copy f or your
o wn use of sel ect i ons f r om
s e v e r a l r e c or ds , c a s s e t t e s
or CDs that. you borrowed . . . . . 1
55. How f ami l i ar woul d you say t hat you
of ( READ I TEM) or don t you have an opi ni on
2
2
2
2
2
a r e
3
3
3
3
3
4
4
4
4
P e r f e c t l y
A c c e p t a b l e N o
t o do Opi ni on
5 6 7 8
5 6
7
8
5 6 7 8
5 6 7 8
4 5 6 7 8
wi t h copyr i ght l aws and t hei r
appl i cat i on t o home audi o t api ng? Woul d you say t hat you ar e - - ext r emel y
f a mi l i a r , q u i t e f a mi l i a r , s l i g h t l y f a mi l i a r o r n o t a t a l l f a mi l i a r ?
Extremely familiar. . . . , . . . . . .1
Quite familiar. . . . . . . . . . . . . . .2
Slightly familiar. . . . . . . . . . . .3
Not at all familiar. . . . . . . . ..4
Not sure. . . . . . . . . . . . . . . . .5
I F UNDER 17 Y E ARS OF AGE, SKI P TO DE MOGRAP HI CS ( P AGE 3 3 )
56. Peopl e have di f f er ent vi ews on how f ai r cur r ent pr act i ces of audi o t api ng
ar e f or di f f er ent gr oups. On a scal e of 1 t o 7, wher e 7 means per f ect l y
f ai r and 1 means not at al l f ai r , how f ai r woul d you consi der ( I TEM)
or don t you have an opi ni on on t hat ?
No t a t a l l P e r f e c t l y N o
F a i r F a i r Opi ni on
ROTATE LIST
( ) a. Pr esent pr act i ces of home
t a pi ng f r om r e c or ds , pr e -
r ecor ded audi ocasset t es
and CDs ar e t o t he
r ecor di ng i ndus t r y
( ) b. Pr esent pr act i ces of home
t api ng f r om r ecor ds, pr e-
r ecor ded audi ocasset t es
and CDs ar e t o song wr i t er s
and per f or mer s
1 2 3 4 5 6 7
1 2 3 4 5 6 7
8
8
( ) c. pr esent pr act i ces of home
t a pi ng of r e c or ds , a udi o-
casset t es and CDs ar e t o t he
average consumer 1 2 3 4 5 6 7 8
57. Now usi ng t he same scal e r unni ng f r om 1, me a ni ng not a t a l l f a i r , t o 7 ,
me a ni ng pe r f e c t l y f a i r , I d l i ke t o know how f ai r you t hi nk each of t he
f ol l owi ng suggest i ons woul d be or don t you have an opi ni on?
No t a t a l l P e r f e c t l y No
F a i r F a i r Opi ni on
( ) a. New audi o r ecor der s shoul d be
bui l t s o t he y c a n t c opy
commer ci al r ecor di ngs
( ) b. Audi o r ecor di ngs shoul d be
made so t hey can t be copi ed
( ) c. A f ee shoul d be char ged on
audi o r ecor der s and pai d t o
copyr i ght hol der s t o compen-
sat e t hem f or home t api ng
( )d. A f ee s houl d be c ha r ge d on
bl ank audi ot apes and pai d t o
copyr i ght hol der s t o compen-
sat e t hem f or home t api ng
( ) e. Cur r ent home t api ng pr act i ces
shoul d be l ef t unchanged
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1
1
2 3 4 5 6 7
2 3 4 5 6 7
8
8
8
8
8
DEMOGRAPHICS
N o w, a f ew l ast quest i ons f or st at i st i cal pur poses. . .
D1. How old are you?
age

D2a. Ar e
f o r
Ref used. . . 99
you cur r ent l y empl oyed
work, retired, going to
f ul l t i me , pa r t t i me , une mpl oy e d
school , keepi ng house or somet hi ng
a nd l ook i ng
e l s e ?
Employed full time. . . . . . . . . . . . . . .
( ( -1
Employed port time. . . . . . . . . . . . . . . .
. . - 2
Unempl oyed and l ooki ng for work. . . . . -3 SKIP TO D3
Retired. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4 SKIP TO D3
Going to school. . . . . . . . . . . . . . . . . . . . . -5 SKIP TO D3
Keeping house. . . . . . . . . . . . . . . . . . . . . . . -6 SKIP TO D3
Disabled (vol. ). . . . . . . . . . . . . . . . . . . . . -7 SKIP TO D3
Ot h e r (S P E C IF Y )
:
. . . . . . . . . . . . . . -13 SKIP TO D3
Refused. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. - 1 4
D2b. Do you use a comput er at work?
Yes. . . . ....1
No. . . . . . . . . 2
D3. How many worki ng computers, if any, do you have i n your househol d?
None. . . . . . . . . . . . 1
One. . . . . . . . . . . . . 2
Two. . . . . . . . . . . . .3
Three or more. . .4
Refused. . . . . . . . .5
04. What I s hi ghest gr ade or year of r egul ar school you have compl et ed?
No formal schooling. . . . . . . . . . .1
Fi r st t hr ough 7t h gr ade. . . . . . . 2
8th grade. . . . . . . . . . . . . ........3
Some high school. . . . . . ........4
High school graduate. . . . . . . . . .5
Some college. . . . . . . . . . . .. .....6
Four - y e a r c ol l e ge gr a dua t e . . . . 7
Some graduate school. . . . . . . . . .8
Gr aduat e degr ee. . . . , . . . . . . . . . . 9
Refused. . . . . . . . . . . . . ....10
D 5 . Whi ch of t hese cat egor i es best descr i bes your r aci al backgr ound?
White. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Black. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Asian or Pacific Islander. . . . . . . . . . . .3
Eskimo, Aleut or American Indian. . . . .4
Ot her . . . 5
Refused. . . . . . . . . . . . . . . . . . . ......6
IF UNDER 17 YEARS OF AGE, SKIP TO 07
06. Whi ch of t he f ol l owi ng cat egor i es best descr i bes t he t ot al househol d i ncome
bef or e t axes i n 1987? Your be s t e s t i ma t e i s f i ne .
Nothing. . . . . . . . . . . . . . . . . . .1
Less t han $5, 000. . . . . . . . . . 2
$5000 to $9,999.00 , , . . . . ..3
$ 1 0 , 0 0 0 t o $ 1 9 , 9 9 9 . . . . . . . . 4
$20, 000 to $29,999. . . . . . , .5
$ 3 0 , 0 0 0 t o $39, 999. . . . . . . . 6
$ 4 0 , 0 0 0 t o $49, 999. . . . . . . . 7
$ 5 0 , 0 0 0 t o $74, 999. . . . . . . . 8
$ 7 5 , 0 0 0 t o $ 9 9 , 9 9 9 . . . . . . . . 9
$100,000 or more. . . . . . . . .10
Refused. . . . . . . . . . . . .11
D7. How many persons, i nc l udi ng bot h a dul t s a nd c hi l dr e n, l i v e i n t hi s hous e hol d?

Onl y r espondent . . . . . 1 SKI P TO D9
Refused. . . . . . . . . . . .99
IF UNDER 16 YEARS OLD, SKIP TO 09
0 8 . Whi c h of t he f ol l owi ng c a t e gor i e s best descr i bes how much you

per sonal l y ear ned f r om al l sour ces, bef or e t axes, i n 1987 ?
Nothing. . . , . . . . . . . . . . . . . . .1
Less than $5,000. . . . . . . . ..2
$ 5 0 0 0 t o $9, 999. . . . . . . . . . . 3
$10, 000 t o $19, 999. . . . . . , . 4
$20, 000 to $29,999. . . . . . , . 5
$ 3 0 , 0 0 0 t o $ 3 9 , 9 9 9 . . . . . . . . 6
$40, 000 to $49,999. . . . . ...7
$50, 000 to $74,999. . . . . . . . 8
$ 7 5 , 0 0 0 t o $ 9 9 , 9 9 9 . . . . . . . . 9
$100,000 or more. . . . . . . . .10
Refused. . . . . . . . . . . . .11
20-900 - 89 - 7
IF OVER 16 SKIP TO D11
D9. Do you get an al l owance f rom your f ami l y?
Ye s . . , . . . . . 1
No. . . . . . . . .2 SKIP TO D11
D10. How much i s your al l owance,
per week? (ON AVERAGE)
$

None. . . . . . . . . . . ........0
Not sure. . . . . . . . . . . . .999
FROM OBSERVATION
D11. Sex
Male. . . . ....1
Fe ma l e . . . . . . 2
Thank you f or your assi st ance. That completes our interview.
Not e : State/Region is coded in Sample Point.
Census designation as SMSA Central
Ci ty or SMSA Remai nder or Non- SMSA i s coded i n Sampl e Poi nt .
HOME TAPING FLYSHEET
AGE IS UNDER 16
1-11 MONTHS
5a.
6b .
30b .
37a.
38b .
41c .
43b .
44b .
AGE IS OVER 17
12 MONTHS OR MORE

2 0 a / b. TAPES. . . . . . . . . . . . . . . . OTHER
24a. BORROWED, GIVEN. . . . . . BOUGHT
31. PRERECORDED
37b. PRERECORDED
38c. PRERECORDED
CASSETTE OTHER
CASSETTE OTHER
CASSETTE OTHER
Ap p e n d i x C
OTA Su r vey Ta bles
The following t ables ar e t aken fr om t he r e- ble number s in t his appendix cor r espond
por t Sur vey of Home Taping and Copying t o t he number s in t he SRBI r epor t . Due t o
Final Report (Vol. 2) pr epar ed for OTA by space limit at ions, t ables have been abbr evi-
Schulman, Ronca, and Bucuvalas, Inc. Thet a- at ed.
Table 2-1. - Importance of Music
Question 9: How important an activity do you consider listening to musicextremely important quite important, slightly im-
portant, or not important a t all?
Unweighed Not at Not
base Extremely Quite Slightly all sure
Total: . . . . . . . . . . . . . . . . . . . . . . . . . .
Age:
10 14
15-19 . . . : : : : : :
20-24 . . . .
25-29 . . . . . .
3 0 - 3 4
3564. :. .
65+ .
Sex:
M a l e
F e m a l e
Race:
W h i t e
Black ~ :
(1,501)
( 57)
( 118)
( 140)
( 173)
( 180)
( 619)
( 197)
( 594)
( 907)
(1,288)
( 131)
24
27
39
36
22
20
21
16
22
25
23
32
32
20
33
34
35
29
32
35
31
33
33
23
34
41
22
24
34
40
35
34
34
33
33
32
10
12
5
7
9
8
13
12
12
9
10
11
1
-
2
4
1
1
1
1
253
Table 2-4. -Past Week Pr er ec or ded Musi c -Li st eni ng
Quest i on 11: Not i nc l udi ng musi c on r adi o and t el evi si on, appr ox i mat el y how muc h t i me i n t he l ast seven days di d you spend
l i st eni ng t o musi c on r ec or ds, audi ot apes and CDs, not i nc l udi ng bac k gr ound musi c i n publ i c pl ac es (e.g., st or es,
of f i c es, el evat or s, bar s).
Unweighed Less 1- 3.5- 7.- 14- 21- 28-
base None 1 HR 3.5 7 14 21 28 35 35+
Total ... , . . . . . . . . . (1,501) 43 3 22 11 10 5 2 1 2
Age:
10-14, ., . . . . . . . . . .
15-19 ..., . .
20-24 . . . . . . . . . . .
25-29 . . . . . . . . . . . . .
3(-34 . . . . . . . . . . .
35-64 . . . . . . . . . . .
65+ . . . . . . . . . .
Sex:
Male . . . . . . . . . . . . . .
Female . . . . . . . . . . .
R a ce:
57)
118)
140)
173)
180)
619)
197)
18
6
28
30
40
53
71
12
4
1
2
3
3
1
28
34
16
20
31
21
13
14
18
17
10
10
10
5
14
15
15
19
7
8
1
4
10
12
8
5
3
1
1
6
3
2
1
1
2
3
4
q
1
q
8
4
4
4
1
1
1
3
3
23
21
11
10
10
9
6
5
2
1
1
1
2
2
594)
907)
40
45
White . . . . . . . . . . . . . (1288)
Black . . ., ... ,., ( 131)
43
43
3
3
22
19
11
11
10
8
6
2
6
5
3
2
2
1
1
2
6
Pl a ce:
City . . . . . . . . ( 440)
Suburb .., ,,, ,. (680)
Rural . . . . . . . . . . ( 381)
10
9
11
1
1
1
1
3
2
46
39
46
2
3
5
20
25
20
12
11
9
1
2
2
R egi on :
East . . . . . . . . . . . . . . ( 311)
Midwest . . . . . . . . ( 370)
south. . . . . . . . . . . . . (519)
We s t , . . . . . . , , . . , . . ( 3 0 1 )
42
46
46
33
3
2
4
3
25
20
21
24
8
15
9
13
8
9
9
14
6
3
4
8
1
2
2
1
*
1
1
2
4
1
2
2
Importance of
music:
Extremely . . ( 344)
Quite . . . . . . . . . . . ( 492)
SIightly . . . . . . . . . (506)
None . . . . . . . . . . . . . (148)
2
2
7
1
1
22
36
54
73
1
2
4
7
17
25
26
16
17
14
7
1
14
12
6
2
13
5
1
3
2
1

Appen d i x COTA S u r vey Ta bl es . 2.55
Table 2-6. Prevalence of Selected Audio Playback Equipment
Question 12a: Which of the following types of audio equlpment do you have in your home or car? Do you have a (READ ITEM)?
Unweighed Record Tape deck CD Walk Boom
base player Home Car player man box None
Total: . . . . . . . (1,501)
Age:
10-14 ., . ... , ( 57)
15-19 ., . . ( 118)
2024 . . . ( 140)
25-29 ... ., . . . . . . . . ( 173)
30-34 ., ( 180)
35-64 . . . (619)
6 5 + . ( 197)
Sex:
M a l e . . ( 594)
Female . . . . . . ( 907)
Race:
White ,, . (1288)
Black . . . . . . . . . . . . . . . ( 131)
Place:
C i t y ( 440)
Subur b . : : : : : : : : : : . ( 680)
Rural . ., . . ., ( 381)
Region:
East . . . . . . . . . (311)
M i d w e s t ( 370)
south. . .: .:::: ( 519)
west, .., ,,, , ( 301)
Income:
Less than $5,000.. . ( 63)
$5,000 $9,999 ( 104)
$ 1 0 , OOO $ 1 9 , 9 9 9 ( 238)
$20,000 $29,999 . (258)
$30,00(-$39,999 . . . . . (206)
$40,000 -$49,999 . . . . . ( 140)
$50,000 -$74,999 ( 118)
$75,000 + . . . . : : : : ( 65)
81
88
86
76
81
88
83
69
81
82
81
83
80
83
79
83
77
81
85
54
76
77
82
81
86
92
82
76
91
94
86
76
83
76
46
77
75
76
74
73
79
75
75
73
77
78
57
58
68
77
74
84
81
91
65
75
74
73
64
73
68
35
70
61
67
49
65
65
65
56
60
71
71
36
34
52
66
65
77
90
89
15 48
17 65
23 79
22 67
17 53
14 49
15 45
2 12
18 51
12 46
16 48
9 49
16 49
15 52
14 40
14 50
13 49
16 46
17 49
9 28
11 27
9 35
15 47
14 47
16 68
26 56
33 59
63 2
73
79
71
70 2
58
64 2
40 10
62 2
64 3
63 2
67 3
65 1
63 2
61 4
58 2
61 3
66 3
66 2
57 16
49 4
57 3
62
*
60 3
68 1
70 1
68 2
Tabl e 2-7.-Changes i n Home Pl aybac k Equi pment : 1979-1988
1979* 1988
Unweighed base:
Record player . . . . . . . . . . . . . . . . . 78
Cassette players . . . . . . . . . . . . . . . . . . 38
Installed in home . . . . . . . . . . . . . . . .
Installed in auto . . . . . . . . . . . . . . . . .
Portable . . . . . . . . . . . . . . . . . . . .
8-track player, , .,, . . . . . . . . . . . . . . . . 43
CD pl a y e r . . . . . . . . . . . . . . . . . . . . . , , . NA
None . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(1,501)
81
94
20 76
8 65
24 63
NA
15
2
*The Roper Organization, A Study m Tape Recording Practices Among the General Public, June 1979
NA = not applicable
Tabl e 3-1 .Most Rec ent Li st eni ng
Quest i on 16: When w as t he l ast t i me you l i st ened t o musi c on r ec or ds, audi ot apes, or CDs, not i nc i udi ng r adi o or t el evi si on or
bac k gr ound musi c i n publ i c pl ac es (e.g., st or es, of f i c es, el evat or s, bar s)?
Unweighed Past Past Past A year Not
base week month year or more sure,
Total: . . . . . . . . . . . . . . . . . . (1,501) 59 18 11 7 5
Age:
10-14 . . . . . . . . . . . . . . . . . . . . . ( 57) 79 17 4
15-19 . . . . . . . . . . . . . . . . . . . ( 118)

92 7
*
1
20-24 . . . . . . . . . . . . . . . . . . . ( 140)
79 11 6 2 2
25-29 . . . . . . . . . . . . . . . . . . . . . . . . . ( 173) 66 9 19 3 3
3(-34 . . . . . . . . . . . ( 180) 56 27 10 3 4
=-~, ,,, ,,, ,,, ,,, ,,, ,, ( 619) 52 21 13 9 5
65+ . ,. ( 197) 33 21 15 19 12
Sex:
Male, ,,, ,., ,,, ,,, ,,, ,,. . .,, ,, ( 594) 61 17 10 8 3
Female, ,,, ,, ..,, ,,, ( 907) 57 19 12 6 6
Race:
White . . . . . . . . . . . . . . . . . . . . . . . (1,288) 60 19 11 6 4
Black . . . . . . . . . . . . . . . . . . . . . ( 131) 55 13 11 14 7
Pl ac e:
City . . . . . . . . . . . . . . . . . . . . . . . ( 440) 56 18 13 9 4
Suburb . . . . . . . . . . . . . . . . . . . . . . ( 680) 61 18 11 6 5
Rural . . . . . . . . . . . . . . . . . ( 381) 60 18 9 7 7
Region:
East . . ( 311) 57 17 13 7 6
Midwest, . ., . . .,,.,..,. ( 370) 56 17 15 8 5
South ,,, . . . . . . . . . . . . ( 519) 58 20 11 7 5
West, . . . . . . . . . . . . . . . . . . . ( 301) 68 17 6 6 4
Appen d i x COTA S u r vey Ta bl es . 257
Table 3-7 (Abbreviated) .- Format Listened
Question 20a: Were you listening to records, audiotapes, or CDs? MULTIPLE RECORD
(Base: past year listened)
Unweighed
base Records Tapes CDs Mixed Not sure
Total: . . . . . . . . . . . . . . . . . . . . . . . . . . (1 ,326) 21 64 10 3 2
Age:
10 14 . . . . . . ., ... ( 57) 16 78 4 2
15-19 . . . . . .
, . . ( 117) 13 72 10 4
2(-24 ., ... ., : : : : ., ... ( 136) 16 64 15 4 1
25-29 . . . . . . . . . . . . . . . . . . . . . . ( 165) 22 57 14 6 1
30-34 . . . . . . . . ( 170) 23 60 12 4 1
35-64 . . . . . . ( 537) 20 65 9 3 2
65+. ,,, ,,, ,,, . . . . ( 134) 32 57 2 3 6
Sex:
Male ,,. . . . ( 533) 16 64 11 6 2
F e m a l e ( 793) 24 64 8 2 2
Table 3-13 (Abbreviated).-Source of Recording
Qustions 24a: How did you obtain that (record/tape/CD) - did you buy it, borrow it receive it as a gift, make it, or something
else?
Unweighed self Other Bor-
base bought bought rowed Given Made Other
T o t a l : (1 ,012) 74 2 1 12 10 1
Age:
10-14 . . ( 34)
15-19 ( 89)
20-24 .: :., :., . :,,.. ( 107)
25-29. , ( 129)
30- 34 . . . , , : : : : : : : : : : . ( 136)
3564 . . . . . ( 417)
6 5 + ( 96)
58
84
71
77
74
74
77
8 15
11
15
11
11
12
17
18
5
13
10
12
9
4
2
1
3
1
1
1
1
*
2
2
.
2
Sex:
Male, . . . . ( 410)
Female .,...., . . ( 602)
78
71
2
1
*
2
7
17
12
7
1
2
Race:
White ,. .,.... ,, ( 886)
Black, ,, . . . . . ( 69)
75
67
2
1
1
13
6
8
20
1
4
Tabl e 3-15. -Cont ent s of Audi ot ape Last Li st ened
Question 26a: Did the audiotape you made contain one or mor e w hol e LPs, c asset t e al bums, or CDs?
Quest i on 26b: Did the audiotape you made (also) contain a mixture of sel ec t i ons f r om LPs, 45s, c asset t es, or CDs?
Mixture of Selections in Percent (N = 83)
Whole albums ., . . . . . . . . . . . . . . . . . Yes No Not sure Total
Yes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 29
51
No . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 13 46
N.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3 4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 21 3
NOTE: Totals may not add due to rounding
.
Appendix COTA S urvey Tables q 259
Tabl e 4-2. - Most Rec ent Pur c hase
Question 30b: When was the last time YOU pur c hased a r ec or d, pr er ec or ded audi oc asset t e or CD?
base week month year or more sure Never
Total: . . . . . . . . . . . . . . . . . . . . . (1,501) 5 15 38 20 4 17
Age:
10-14. . . . . . . . . . . . . ( 57)
15-19. . . . . . . . . . . . . . . . . . ( 118)
20-24. . . . . . . . . . . . . . . . . . . . ( 140)
25-29. . . . . . . . . . . . . . . . . . . . ( 173)
30-34. . . . . . ( 180)
35-64 . . . . . . . . . . . . . . . . . . ,, ( 619)
65+ .,., ,,, ., . .,, ,,,..,, ( 197)
3
16
13
5
4
4
q
17
29
22
21
17
11
6
34
44
43
45
44
40
22
8
8
12
18
20
24
30
6
1
1
4
7
4
4
32
3
9
7
8
16
37
Sex:
Male . . . . ,., . . . . . ( 594)
Female . . . . . . . . . . . . . . . ( 907)
7
4
16
14
40
37
20
21
3
5
13
20
R a ce:
White . . . (1288)
Black . . . . .. ., ., .,.....:: ( 131)
6
4
15
13
39
32
20
18
4
4
15
29
Pl a ce:
ci t y . . . . . . . . . . . . . . . . . . . . ( 440)
Suburb ,.. . . . . . . . . . . . ( 680)
Rural . . . . . . . . . . ( 381)
5
6
5
18
15
12
39
39
36
18
22
20
4
4
5
17
14
23
R egi on :
East . . . . . . . . . . . . . . . . . . . ( 311)
Midwest . . . . . ( 370)
s out h, . . . . . . . _ _ . . : : ( 5 1 9 )
West . . . . . . . . . . . . . . . ( 301)
6
4
6
6
14
12
17
16
34
42
37
41
22
21
18
22
3
5
5
3
22
16
17
12
Income:
Less than 5,000. ,. ,,. ( 63)
$5,000-$9,999 . ( 104)
$ 1 0 , 0 0 ( - $ 1 9 , 9 9 9 : : : . . . ( 238)
$ 2 0 , 0 0 0 - $ 2 9 , 9 9 9 ( 258)
$ 3 0 , 0 0 0 - $ 3 9 , 9 9 9 . , . ; : ( 206)
$40$000- $49, 999 ( 140)
$50,000-$74,999 . ...::.::: ( 118)
$75,000+ . . . . . . . . . ( 65)
24
30
23
22
26
18
17
6
5
7
4
5
1
2
7
3
30
30
20
16
11
10
6
6
3
1
7
5
4
7
9
10
2
7
13
13
13
16
22
21
36
24
34
40
44
47
39
54
Tabl e 4-5. - Most Rec ent Pur c hase Oc c asi on: Number by For mat
Question 31: What did you buy on that occasion? How many?
Cassettes LPs 45s CDs
(635) (153) (22) (108)
One . . . . . . . . . . . . 68 68 59 65
Two . ., . . ... , ., 17 16 9 20
Three ... . . . . . . . . . ., . . . . . . . . . 8 8 19 3
Four . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2
9
Five + . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 5 13 3
Not sure ,., ,. ....., ., ,., 1 1

Mean ......., . . . . . . . . . . . . . 1.73 1.89 2.17 1.81
Tabl e 5-1.-Past Year Tapi ng
Questions 40: In the past year have you used an audio recorder to tape music from either radio, television, records, tapes or
CDs?
Unweighed Not
base Yes No sure
Torah . . . . . . .,, ,,, . . . . . . . . . . . . . . . . . . (1,501)
Age:
10-14 . . . . . . . . . . . ( 57)
15-19 . . . . . . . . . . . . . . . . . .,, .,.,.,,.. ( 118)
20-24 . . . . . . . . . . . . . . ....,,.,.,,,,,. ( 140)
25-29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 173)
3 0 - 3 4 . . . . . . . . . . . . , , , , , , , ( 180)
35-64 . . . . . . . . . . . . . . . . . . . . . . . . . ,,. ( 619)
65+ . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 197)
Sex:
Male . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 594)
Female . . . . . .,,,...,. . . . . . . . . . . . . ( 907)
R a ce:
Whi t e . . . . . . . . . . . . . . . . . , , , . . , , . , , , . (1,288)
Black . . . . . . . . . . . . . . . . . . . ( 131)
Income:
Less than $5,000 . . . . . . . . . . . . . . . . . . . . ( 63)
$5,00(- $9,999 ( 104)
$10, 000 C-$19, 999 ::: ::::::::::::: ( 238)
$20,000 -$29,999 . . . . . . . . . . . . . . . . . . ( 258)
$30,000-$39,999 . . . . . . . . . . . ( 206)
$40,000 -$49,999 . . . . . . . . . . . . . . ( 140)
$50,000-$74,999 ( 118)
$75, 000+ . . . . . . . : : : : : : : : : : : : : : : : : ( 65)
41
80
77
59
45
45
29
10
44
38
40
48
32
22
37
35
31
40
43
41
59
20
19
39
54
55
71
90
56
61
60
52
68
77
62
64
69
59
56
59
1
3
1
q
1
1
1
1
1
q
1
1
Appen d i x COTA S u r vey Ta bl es q 261
Tabl e 5-2. Past Year Tapi ng by Age: 1979-1988
Question 40: In the past year, have you used an audio recorder to tape music from either radio, television, records, tapes or
CDs?
Question x: (ROPER) In the past twelve months, have you personally taped any music on a tape recorder?
1979* 1988
10-13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.1
14- 15 . . . . . . . . . . . : : . : : . . : : . . . . ~~~~~~~ . . . . . . . . . . . 39.0
16-17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.1
18-29 . . . . . . . . 31.9
30-44. . . . . . . . . . . . . . . . . . . . : : : . : : : : : : : ::::..... . . . . . . . . 25.0
45-59 ...,, . . . . . . . 16.4
60+. ..:: ::::::. . . . . . . . . . . . . . . . . . . 4.4
40.8
80.6
78.0
81.9
53,9
41.5
24.0
10,9
q The Roper Organization, A Sfudy on the Tape Recording Practices of the General Public, June 1979
Tabl e 5-3.Tapi ng i n Past 3 Mont hs: 1982-1988
Question x:(YSW) Do you ever tape music from records, prerecorded tapes, or the radio?
Question x: (YSW) How many of these tapes have you made in the last 3 months from records, prerecorded tapes, or the
radio?
1982* 1988
Percent total population14 + . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 28
Percent tapers 14- . . . . . . . . . . . . . . . . . 55 58
Yankelovich, Skelly and White, Inc Why Americans Tape: A Survey of Home Audio Taping in the United States, September 1982
Tabl e 5-4.Past Year Tapi ng Among Cur r ent Buyer s: 1978-1988
Question 40: In the past year , have you used an audio recorder to tape music from either radio, television, records, tapes, or
CDs?
1978 1988
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 41
Current buyers . . . . . . . . . . . . . . . . . . . . . . . . 32 53
q Warner Communications Inc , The PreRacorded Music Market: An Inventory Survey, March 1978
262 . Copyright a n d Hom e Copyi n g: Tech n ol ogy Ch a l l en ges t h e La w
Table 5-5.-Taping Fr om Radi o or TV
Quest i on 43a: Have you ever made an audi ot ape of musi c f r om r adi o or t el evi si on?
Unweighed Not
base Yes No sure
Total: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Age:
10-14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20-24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25-29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30-34, . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35-64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sex:
Male . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Female . . . . . . . . . . . . . . . . . . . . . . . . . . . .
R a ce:
White . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Black . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pl a ce:
City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Suburb . . . . . . . . . . . . . . . . . . . . . . . . . .
Rural . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Region:
East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Midwest . . . . . . . . . . . . . . . . . . . . . . . . .
south . . . . . . . . . . . . . . . . . . . . . .
west., ,...., . . . . . . . . . . . .
lncome:
Less than $5,000 . . . . . . . . . . . . . . . .
$5,000-$9,999 . . . . . . . . . . . . . . . . . .
$10,000 -$19,999 . . . . . . . . . . . . . . .
$20,000-$29,999 . . . . . . . . . . . . . . .
$30,000 -$39,999 . . . . . . . . . . . . . . . . .
$40,000-$49,999 . . . . . . . . . . . . . . . . . .
$50,000 -$74,999 . . . . . . . . . . . . . . . .
$75,000+ . . . . . . . . . . . . . . . . . . . . . . . . .
(1,501) 45 54 1
( 57)
( 118)
( 140)
( 173)
( 180)
( 619)
( 197)
72
78
70
49
43
36
15
28
21
30
49
56
63
85
1
1
1
*
( 594)
( 907)
50
40
49
59
1
q
(1,288)
( 131)
44
58
56
42
1
q
( 440)
( 680)
( 381)
43
50
38
56
49
61
1
1
*
( 311)
( 370)
( 519)
( 301)
50
41
45
44
49
58
54
55
1
1
1
q
( 63)
( 104)
( 238)
( 258)
( 206)
( 140)
( 118)
( 65)
37
25
41
48
37
40
48
42
61
75
58
51
62
59
51
56
1
1
1
1
1
1
1
Appen d i x C-OTA S urvey Tables . 263
Tabl e 5-6. - Rec enc y of Br oadc ast Tapi ng
Question 43b: When was the most recent time you made an audiotape of music from radio or or television?
Total: . . . . . . . . . . . . . . . . . . . . . . (1,501) 5 6 16 17 1 55
Age:
10-14 . . . . . . . . . . . . . . . . . . . ( 38)
15-19 .., . . . . . . . . . . . . . . . . . ( 90)
20-24. , . . . . . . . . . . . . ( 90)
25-29, .,, . . . . . . . . . . . . . . . . . ( 82)
30-34 . . .,, ,,, . . . . . . . . ,. . ( 74)
35-64 . . . . . . . . . . . . . . ( 211)
65+.... . . . . . . . ( 26)
13
16
12
2
2
2
26
16
7
4
1
3
2
25
35
22
21
17
12
3
7
11
26
21
23
18
9
28
22
30
50
57
64
85
1
4
2
q
1
1
sex:
Male . . . . . . . . . . . . . . . . . . . . . . ( 295)
Female. , . . . . . . . . . . . . ( 321)
4
5
6
6
18
15
21
12
1
2
1
1
50
60
R a ce:
White .,...,.,,,,,. ( 506)
Black . . . . . . . . . . . . . . . . . ( 76)
4
8
6
8
14
31
18
10
56
42
Income:
Less than $5,000 . . . . . . . . . . ( 24)
$5,000- $9,999 ( 29)
$10,000 -$19,999 :::::::: : ( 29)
$20,000-$29,999 ...,
( 111)
$30,000 -$39,999 .. ...::: : ( 79)
$40,000-$49,999 . ( 55)
$50,000 -$74,999 . ( 54)
$75,000+ ( 26)
R e f u s e d ( 5 4 )
4
1
3
4
3
2
2
2
4
2
2
4
4
1
5
4
10
2
19
10
16
17
12
16
13
15
13
10
11
16
23
21
15
27
12
16
2
1
2
1
1
2
2
3
2
63
75
59
52
63
60
52
58
64
Tabl e 5-7.-Number of Tapes Made: Most Rec ent Br oadc ast Tapi ng
Question 43c: How many di f f er ent t apes di d you mak e on t hat oc c asi on?
(Base: Past year tapers)
Unweighed Not
base One Two Three Four + sure Mean
Total: ... . . . . . . . . . . . . . . ( 338) 84 10 2 1 3 1.21
Age:
10-14 ....., . . . . . . . . . . . . . . . ( 33)
15-19 . . . . . . . . . . . . . . . . . . . ( 74)
20-24. , . . . . . . . . . . . . . . . . . . ( 46)
25-29 . . . . . . . . . . . . . . . . . . . . . ( 41)
30-34 . . . . . . . . . . . . . . . . . . . . . ( 36)
35-64 ......., . . . . . . . . . . . . ( 95)
65+, . . . . . . . . . . . . . . . . . . . . . ( 10)
86
86
95
85
89
75
81
5
14
3
12
9
12
14
7
1
2
1
3
2
1.31
1.14
1.09
1.23
1,10
1.30
1.15
2
10
5
Sex:
Male . . . . . . . . . . . . . . . . . . . . . . ( 155)
Female ..,.,,,. . . .,, ,.,..,, ( 183)
80
88
12
8
3
1
2
1
3
2
1,30
1.13
Race:
White . . . . . . . . . . . . . . . . . . . . . (254)
Black . . . . . . . . . . . . . . . . . . . . ( 60)
87
75
9
14
2
2
2
8
121
1.23
1
1
Tabl e 5-9.Number of Br oadc ast Tapi ng Oc c asi ons i n Past Mont h: by Age Cohor t
Quest i on 43h: Dur i ng t he past mont h, on how many oc c asi ons, i n al l , have you made audi o t apes of musi c f r om r adi o or
t el evi si on?
Sum Mean Percent
Torah . . . . . . . . . . . . . . . . . . . . (1,501) 712,9170 0.4749
Age:
10-14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 57)
15-19 . . . . . . . . . . . . . . . . . . . . . . . . ( 118)
2(-24 . . . . . . . . . . . . . . . . . . . . . . . . . ( 140)
2 5 - 2 9 . . . . . . . . . . . . . , , , , , , . , . . ( 173)
30-34 . . . . . . . . . . . . . . . . . . . . ( 180)
35-64 ...........,,,,, . . . . . . . . ( 619)
65+ . . . . . ( 197)
NA . . . . . . . . . . . . . . . . . . . ( 17)
232,1220
217.9340
111.7000
21,1070
12,6790
111,8030
4.8360
0.7360
1.9530
1.6750
0.8138
0.1352
0.0799
0.1922
0.0232
0.0769
32.6
30.6
15.7
3.0
1.8
15.7
0,7
0.1
NA = not applicable
Appen d i x COTA S u r vey Ta bl es .265
Tabl e 5-10.-Tot al Br oadc ast Tapes: Past Mont h
Question 43c: How many different tapes did you make on that occasion?
Question 43h: During the past month, on how many occasions, In all, have you made audio tapes of music from radio or
television?
Total Sum Mean Percent
Total: ., ., ., (1,501) 850.3330 0.5665
Age:
10-14, ., . . . . . . . . . . ( 57)
1 5 1 9 ( 118)
2 0 - 2 4 , ( 140)
25-29. ., ( 173)
30-34 . . ( 180)
3564 :. ( 619)
6 5 + ( 197)
NA . . . . ,, ,, ( 17)
311.7490
227.6360
134.7720
32.1720
12.6790
125.0170
4.8360
1.4720
2.6230
1.7496
09819
02061
0.0799
02149
00232
0,1539
36,7
26.8
15,8
3 8
1.5
14,7
0.6
0.2
NA = not available
Tabl e 5-12. Rec enc y of Tapi ng Fr om Pr er ec or ded For mat
Question 44b: When was the most recent time that you taped music from a record, prerecorded audio cassette or CD?
T o t a l : (1,501) 4 6 18 19 2 50
Age:
10-14 . ( 57)
1 5 1 9 ( 118)
20-24 ( 140)
25 29 : : : : ( 173)
30-34 ( 180)
3564 .:. .: :: ( 619)
6 5 + ( 197)
13
12
10
3
2
1
1
10
18
5
5
9
4
1
19
35
30
23
24
14
2
12
6
32
29
27
20
11
4
3
3
2
q
2
1
42
26
21
39
37
58
85
Sex:
M a l e ( 594)
Female : . : : : : : : ( 907)
4
4
7
5
21
16
23
16
2
2
44
56
Race:
White ., (1 ,288)
Black . : : : ::...... ( 131)
3
10
6
7
18
20
20
19
2
3
52
41
Income:
Less than $5,000 . . . . (
$5,000 $9,999 (
$10,000-$19,999
(
$20,000-$29,999 : : : : : : : (
$30,000-$39,999
(
$40,000 $49,999 : : : : : : (
$50,000-$74,999 (
$75,000+ (
17
12
16
18
15
17
26
24
16
12
25
24
26
24
21
14
63)
104)
238)
258)
206)
149)
118)
65)
6
2
3
3
1
1
5
4
2
3
4
5
3
8
7
6
3
1
1
3
5
6
56
71
51
49
52
46
41
46
Tabl e 5-13.-Number of Tapes Made
Question 440: How many different tapes di d you r ec or d ont o on t hat oc c asi on?
(Base: past year tapers)
Unweighed Number of tapes Not
base 1 2 3 4+ sure Mean
Total: . . . . . . . . . . . . . . . . . . . . . . . ( 406) 63 20 7 0 2 1.84
Age:
10-14 . . . . . . . . . . . . . . . . . . . . . ( 24)
15-19 . . . . . . . . . . . . . . . . . . . . . ( 77)
2(-24 . . . . . . . . . . . . . . . . . . . . . ( 58)
25-29 . . . . . . . . . . . . . . . . . . . . . ( 52)
30-34 . . . . . . . . . . . . . . . . . . . . . ( 61)
35-64 . . . . . . . . . . . . . . . . . . . . . ( 127)
65+ . . . . . . . . . . . . . . . . . . . . . . ( 5)
56
65
68
61
70
60
86
24
24
20
20
11
19
14
8
3
6
10
9
8
12
7
5
6
9
7
2.28
1.94
1.54
1.69
1.72
1.87
1.14
1
2
1
7
.
Sex:
Male . . . . . . . . . . . . . . . . . . . . ( 198)
Female . . . . . . . . . . . . . . . . . . . . ( 208)
64
63
15
25
10
3
9
6
2
3
1.96
1,71
Race:
White . . . . . . . . . . . . . . . . . . . . . ( 324)
Black . . . . . . . . . . . . . . . . . . . . . ( 55)
64
65
19
20
7
2
7
12
3
1
1.81
2.00
Tabl e 5-17.Tot al Tapes Made i n t he Past Mont h Fr om Pr er ec or ded For mat
Unweighed
base Sum Mean Percent
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (l,50l) 736.4450 0.4906
Age:
10-14 . . . . . . . . . . . . . . . . . . . . . . . . . ( 57) 256.0900 2.1547 34.8
15-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 118) 156.1910 1.2005 21,2
20-24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 140) 57.3730 1.2005 7.8
25-29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 173) 41,3860 02651 5.6
30-34 . . . . . . . . . . . . . . . . . . . . . . . . . ( 180) 52.8610 0.3331 7.2
35-64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 619) 166,5680 0.2864 22.6
65+ . . . . . . . . . . . . . . . . . . . . . . . . . . ( 197) 4.5040 0.0216 0.6
NA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 17) 14720 0.1539 0.2
NA = not available
NOTE: Two outliers reporting 10 or more tapes made on Iast taping occasion were coded as 10 tapes made, in this analysis
Tabl e 5-19. - Char ac t er i st i c s of Musi c Taper s
Unweighed Prerecorded Prerecorded Radio
base & radio only onlv None
Total: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,501) 16 12 11 61
Age:
10-14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 57)
15-19 . . . . .,, ,, ...,,.,. . . . . . . . . . . . . ( 118)
20-24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 140)
25-29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 173)
W-34 . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 180)
W-64. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 619)
65+ . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 197)
32
51
30
17
15
8
1
10
14
14
14
20
12
2
32
15
11
10
5
9
5
25
20
45
60
59
71
92
Sex:
Male . . . . . . . . . . . . . . . . . . . . . . . . . ( 594)
Female, ...,,... . . . . . . . . ( 907)
17
16
14
9
10
11
58
64
Race:
White . . . . . . . . . . . . . . . (1,288)
Black . . . . . . . . . . . . . . . ( 131)
15
24
11
13
9
24
65
39
Place:
Ci t y . . , , , . . . ( 440)
Suburb . . . . . . . . : : . : : . : : : : : : . : : . ( 680)
Rural . . . . . . . . . . . . . . . . . . . . . . ( 381)
15
19
12
11
12
13
11
10
10
62
59
65
Region:
East . . . . . . . . . . . ( 311)
Midwest . . . . . . . . . ( 370)
south . . . . . . . . . . . . ( 519)
west . . . . . . . ( 301)
17
14
18
15
9
11
13
14
12
9
11
10
62
66
58
61
income:
Less than $5,000.. . . ( 63)
5,000- $9,999 . . ( 104)
$10, 000 - $19, 999 . _: : : : : : : : : : ( 238)
$20,000 -$29,999 . . . . . ( 258)
$30,000 -$39,999 . ,. .:: ( 206)
$40,00 -$49,999 . . . . . . . . . . . . . . . . . . ( 140)
$50,000 -$74,999 . . . . . . . . . . . . . . . ( 118)
$75,000+ . . . . . . . . . . . . . . . . . ( 65)
17
4
13
12
9
13
15
17
8
14
10
14
10
13
23
16
8
10
10
12
6
10
4
10
67
73
67
61
75
64
58
57
Quest i on 9:
fQuestion 10:
Question 11:
Tabl e 5-20. - Musi c I nt er est by Past Year Tapi ng
How I mpor t ant an ac t i vi t y do you c onsi der l i st eni ng t o musi c ex t r emel y i mpor t ant , qui t e important, slightly im-
por t ant or not at al l i mpor t ant ?
Dur i ng t he l ast 7 days, appr ox i mat el y how muc h t i me di d you spend l i st eni ng t o musi c on t he r adi o and t el evi si on?
Not i nc l udi ng music on r adi o and t el evi si on, appr ox i mat el y how muc h t i me in the last 7 days did you spend listen-
ing to music on records, audiotapes and CDs, not including background music in public places (e.g., stores, of-
fices, elevators, bars).
Past year taping
Broadcast Recording
Total only only Both Neither
Importance of music:
Ex t r e me l y
Quite . . . . .
Slightly .
Not at all . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . .
. . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . .
Radio listening:
N o n e
Less than 1 hr.
1-5 hrs. ...
6 - 1 0 h r s .
11- 19 hr s.
20 or more hrs.. . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
.
. .
,.
Recording listening
None . . . . . . . . . . . . . . . . . . . .
Less than 1 hr. . . . . . .
1-5 hrs. . . . . . . .
6-10 hrs. . . . .
11-19 . . . . . . . . . . . . . . .,
20 or more hrs. ., . . . . . . . . . . .
(1,501) (126) (194) (212) (969)
24 35 23 45 16
32 25 34 31 33
34 33 38 21 36
10 7 5 2 14
7 3 8 4 9
4 5 3 1 4
31 27 22 22 35
20 22 28 19 19
11 8 10 12 11
24 34 27 39 18
43 30 20 13 57
3 6 3 3 2
31 42 44 38 26
10 10 12 15 8
5 5 8 12 3
6 5 12 18 2
Table 5-23.-Number of Past Month Tapings From Records, Cassettes or CDs by
Rec enc y of Rec or di ng Pur c hase
Sum Percent Cumulative
Total: ., ., . . . . . . . . . . ., ., ., 738,445
Last purchase of a record, cassette or CD:
Past week . . . . . . . ., ... ., . . . . . ... . . . . . . . . . . . 304,960 41.4 41.4
Past month ... . . . ., . . . . . . . . . . . 108,303 14.7 56.1
Past year ., ., ., . ... . . . . . . . . . . . . . 232,108 315 87.6
A year or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.543 3.1 90.7
Not sure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.957 1.1 91.8
Never ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.574 8.2 100.0
Appen d i x COTA S urvey Tables q 269
Tabl e 6-1 (Abbr evi at ed) .-Al bum or Sel ec t i on Tapi ng: Br oadc ast
Quest i on 430: Were you taping one or more whole albums or were you taping singles or selections from albums or both?
(Base: made tape in past year)
Unweighed Selections/ Music Televised Not
base Whole singles Both video concert Other sure
Total: ... . . . . . . . . . ( 338) 8 56 15 2 3 13 3
Age:
10-14 ...., . . . . . . . . . . . ( 33)
58 2 2
17 3
15 19, ... ., . . . . . . . . . ( 74) 6 64 13 13 4
~-24 ., ., . . . . . . . . . . ( 48) 8 58 18 3 6 7
25-29. , . . .,
( 41) 13 48 22 8
9
30 34 . . . . . . .
.
( 36) 11 46 5 4 4 24 5
35-64 . . . ., ( 95) 13 56 10 2 4 10 5
6 5 + ( 10) 5 47 9 25 15
.
Tabl e 6-3 (Abbr evi at ed).Al bum Tapi ng: Pr er ec or ded
Question 44d: Were you taping one or more whole LPs, cassettes, albums or CDs?
(Base: Past year tapers)
Unweighed Not
base Yes No sure
Total: ... . . . . ... ( 406)
Age:
1 0 1 4 ( 24)
15-19 : : : : : : : : : : : : : : : : : ( 77)
20 24 . . . . . . . . . . . . . . . . ( 58)
25-29, . . . . . . . . . . . . . . . ( 52)
W-34 . . . . . . . . . . . . . . . ( 61)
35-64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 127)
65+ . . . . . . . . . . . . . . . . . . . ( 5)
70
84
63
64
76
73
67
59
28 2
16
.
37
.
33 3
20 4
27
27 6
41
Tabl e 6-5.Al bum vs. Sel ec t i on Tapi ng: Tot al Last Tapi ng
Question 44k: Were you taping selections from LPs, singles, cassettes, or CDs onto that tape?
Questions 44d: Were you taping one or more whole LPs, cassette albums or CDs?
Whole LPs
Selections Yes No Not sure Total
Yes, . . . . . . . . . . . . . . . . 21 21
q
43
No . . . . . . . . . . . ,, 48 6 1 55
Not sure ,. . . 1
*
1 2
Total, ,,, . . . . . . . . . . . . . . . . 70 28 2
(N = 406)
Tabl e 6-10 (Abbr evi at ed) .-Sour c e of Or i gi nal : Al bum
Quest i on 44h: Wher e di d you get t he (r ec or d/pr er ec or ded c asset t e/CD) t hat you made t he t ape f r om? Di d you ow n i t , di d you
bor r ow i t f r om member s or a member of your househol d, anot her f ami l y member , q f r i end or somew her e el se?
(Base: Taped whole LP/cassette/CD)
House
Unweighed Own -hold Other
base original member family Friend Other
Tot al : . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 279)
Age:
10-14 . . . . . . . . . . . . . . . . . . . . . . . . . . ( 19)
15-19 . . . . . . . . . . . . . . . . . . . . . . . . . . ( 52)
20-24 . . . . . . . . . . . . . . . . . . . . . . . . . . ( 37)
25-29, . . . . . . . . . . . . . . . . . . . . . . . . . ( 38)
30-34 . . . . . . . . . . . . . . . . . . . . . . . . . . ( 41)
35-64 . . . . . . . . . . . . . . . . . . . . . . . . . . ( 88)
65+. ... ... ... ... ... ... ... ... ..( 3)
57
24
54
59
61
79
61
100
3
1
8
2
1
4
2
4
5
10
1
2
29 2
58
32
32
25 2
12 3
22 6
Tabl e 6-12 (Abbr evi at ed).-End User of Copy

Quest i on 45a: Were you making the tape(s) for yourself, q nether member of your househol d, or someone el se?
(Base: Made tape in past year)
Other
Unweighed household Someone Not
base Yoursetf member else sure
Age
10-14 . . . . . . . . . . . . . . . . . ( 24)
15-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 77)
20-24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 58)
25-29 . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 52)
30-34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 61)
35--64. . . . . . . . . . . . . . . . . . . . . ~~~~~~[ ( 127)
65+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 5)
73
84
66
77
76
74
69
80
7
7
5
3
9
12
19
16
27
17
18
17
18
20
1
1
2
1
Tabl e 7-1. - Why Copi ed
Quest i on 45h: Why di d you c opy t he r ec or di ng? Anyt hi ng el se? (ver bat i m r esponse)
(Base: made copy in past year)
(406)
Wanted a tape for automobile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wanted music/liked album (unspec.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wanted to give to friend/acquaintance/co-worker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Can edit/choose what selections to hear/put different
selections together/create personal selection of music . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wanted to give to family member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wanted to protect originals/keep from wearing out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wanted a tape for Walkman type player . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less expensive than buying the recording/cheaper to copy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Not willing to buy it, . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Needed/wanted it for school/class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Replace an original . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wanted to be able to play it on a tape player (unspec) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prefer cassettes/tape format (reason not specified) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dont have a record player/CD player, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wanted a tape for personal stereo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Can record more selections on 1 tape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cant buy original/not available/cant find original . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wanted better quality of sound (unspec) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dont like the quality of prerecorded tapes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dont like it enough to buy/not that interested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
More convenient than buying it, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Already had a copy/dont need another copy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Could not afford to buy it . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
To sell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other mentions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dont know/not sure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
21
14
6
6
3
3
3
3
2
2
2
1
1
1
1
1
1
1
*
*
q
q
o
10
2
Tabl e 7-2.-Coul d Have Pur c hased
Quest i on 45i : To t he best of your knowledge, c oul d you have pur c hased a r ec or d, pr er ec or ded c asset t e, or CD w i t h t he same
mat er i al , i f you had w ant ed?
Unweighed Not
base Yes No sure
Total: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 406) 57 40 4
Age:
10-14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 24) 56 44
15-19 ., ., . . . . . . . . . . . . . . . . . . . .
( 77) 65 30
2(-24 . . . . . . . . . . . . . . . . . . . . . . . . ( 58) 54 43 3
25-29 . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 52) 67 29 5
30-34 . . . . . . . . . ( 61) 65 35
35-64 . . . . . . . . . . . . . . . . . . . . . . . . . .
( 127) 45 50 5
6 5 * .,.,.....,,,,,,.,,,.,,, ( 5) 3 20 27
Sex:
Male . . . . . . . . . . . . . . . . . . . . . . . . . ( 198) 55 42 3
Female . . . . . . . . . . . . . . . . . . . . . . . . . . ( 208) 59 37
Race:
White . . . . . . . . . . . . . . . . . . . . . . . . . . ( 324) 6 40 4
Black . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 55) 58 41 2
Tabl e 7-3.-Ot her Fac t or s i n Mak i ng Tape
Question 45i: Which of the following concerns, if any, were al so i mpor t ant f ac t or s i n your r eason f or mak i ng t hi s t ape?
(Base: could have purchased)
Unweighed Not Not
base Important important sure
You wanted to protect your originals
f r o m d a m a g e o r w e a r .
You wanted to be able to play the
r e c or di ng on a t a pe pl a y e r
You wanted to get a better quality
s o u n d
It was less expensive than
p u r c h a s i n g a r e c o r d i n g
You wanted a longer playing
time. . ., .,
You wanted to create a customized
selection of music . . . .
Buying the prerecorded material
was inconvenient for you .
You already had a copy of the
music in prerecorded form and
di dn t want t o buy anot her . ,
The purchase price of the recording
was higher than you were willing
t o p a y f o r t h a t r e c o r d i n g
(234) 42% 56% 2%
(234) 86 12 2
(234) 42 55 2
(234) 63 34 2
(234) 46 51 3
(234) 57 42 2
(234) 39 58 2
(234) 51 46 2
(234) 41 54 4
Tabl e 7-4. - Reasons f or Mak i ng Tapes
(Base: adults who have taped in past year)
Past Past Past
week month year Total
50a.
46a.
49a.
51a.
52a.
53a.
Unweighed base:
Some people make tapes of their own
records, cassettes, and CDS, so that
they can play them in their car, Walkman
or elsewhere. Have you ever made a tape
of a record, cassette, or CD that you owned
mainly for this reason? . . . . . . . . . . . . . . . .
Some people tape selections from
several records, cassettes, or CDs to
create their own customized program
of music on tape, Have you ever made
a tape, mainly for that reason? . . . . . . . . . . .
Some people make tapes of their
own records, cassettes, and CDs, in
order to protect the originals from
damage and keep them from wearing out.
Have you ever made a tape of a record,
cassette, or CD that you owned mainly
for this reason? . . . . . . . . . . . . . . . . . . . . . . . . . . .
Some people make tapes of their friends
records, cassettes, and CDs so that they
dont have to buy them. Have you ever
made a tape mainly for t hat
reason? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Some people make tapes of other peoples
records, cassettes, and CDs that they
would like to listen to, but probably
would not buy. Have you ever made a
tape mainly for this reason? . . . . . . . . . . . . . . . . .
Some people make tapes of recordings
because they think they can get better
quality sound from a tape they make
compared to one they could buy.
Have you ever made a tape mainly
for this reason? . . . . . . . . . . . ...
( 38) ( 66) (240) (343)
78%
82
7996 81%
82 61 67
44
30
33
50
48
46
46
41
34
46
41
36
13 26 16 17
Tabl e 8-2.-Li k ei i hood of Pur c hase
Question 451: If you had not been abl e t o mak e t hat t ape, do you t hi nk t hat you w oul d have pur c hased (t hat r ec or di ng/anot her
c opy of t hat r ec or di ng) or not ?
Unweighed Would have Would Not
base purchased not sure
Total. ., ... . . . . . . . . . . . . . . . . . . . . ., .
Age:
10-14 ......., ., . . . . . . . . .
15-19 . . . . . . . . . . . .
20-24 . . . . . . . . . . . . . . . .
25-29, . . . . . . . . . . . . . . . ., .
30-34. . . . . . . . . . . . . . . . . . . . . . . ,,
35-64,,. . . . . . . . . . . . . . . .
65+ . . . . . . . . . . . . . . . . . . . . . . ,...,,
Sex:
Male . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Female . . . . . . . . . . . . . . . . . . . . . . . . . .
Race
White . . . . . . . . . . . . . . . . . . . . . . . . .,,.,
Black . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income:
L e s s t h a n $ 5 , 0 0 0 , . . , , . ,
$5,000- $9,999 . . . . . . . . . . .
$ 1 0 , O O - $ 1 9 , 9 9 9 .
$20,000-$29,999 . . . . . . . . .
$30,00(-$39,999 . . . . . . . .
$40,000 -$49,999 . . . . . . . . . . . . . . .
$50,00-$74,999
$75, 000+ . . . . . . . :::::::::: :: :::. ,
( 234)
( 12)
( 53)
( 33)
( 36)
( 37)
( 60)
( 3)
( 108)
( 126)
( 182)
( 34)
( 10)
( 7)
( 31)
( 45)
( 22)
( 26)
( 29)
( 10)
49
84
61
54
33
41
29
63
50
48
48
47
26
18
40
51
43
26
34
47
47
16
36
37
67
58
63
37
47
47
49
45
66
74
60
47
49
70
60
53
4
4
9
8
3
5
3
8
8
8
2
8
3
6
Tabl e 8-3.-Woul d Pur c hase

Question 45a: Were you making the tape(s) for yourself, another member of your household, or someone else?
Question 451: if you had not been able to make that tape, do you think that you wouid have purchased (that recording/another
copy of that recording) or not?
Not
Making tape for: Yes No sure
Yourself . . . . . . . . . . . . . . . . . . . . . . . . . . . (164) 53 44 3
Household member . . . . . . . . . . . . . .,., ( 25) 32 57 11
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 45) 42 54 4
Tabl e 8-5. - Pur c hase Di spl ac ement
Quest i on 45n: I f you had bought t hat r ec or di ng, w oul d i t have been I n addi t i on t o ot her r ec or di ngs you have pur c hased, or I n
pl ac e of ot her r ec or di ngs you have pur c hased?
Unweighed In In Not
base addition place sure
Tot al ., . . . . . . ., . . . . . . . . . . . . . . . .
Age:
10-14, . . . . . . . . . . . . . . . . . . . . . . . . . .
15-19 .., . . . . . . . . . . . . . . . . . . . . . . .
~-24 ... . . . . . . . . . . . . . . . . . . . . . .
25-29 ...., . . . . . . . . . . . . . . . . . . . . . . . .
30-34......,,., . . . . . . . . . . . . . . . . . . .
35-64 . . . . . . . . . . . . . . . . . . . . . . .
65+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sex:
Male.. ., . . . . . . . . ., ., . . . . . . . . .
Female. , . . . . . . . . . . . . . . . . . . . .
Race:
White . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Black . . . . . . . . . . . . . . . . . . . . . . . . .
( 104)
( 10)
( 28)
( 18)
( 12)
( 15)
( 19)
( 2)
( 51)
( 53)
( 81)
( 14)
77
62
82
88
75
83
72
00
84
70
73
98
19
31
18
6
25
17
18
11
29
23
2
4
7
10
5
2
5
Tabl e 8-11.Hear d Bef or e Buyi ng on...

Quest i on 36(l ): Bef or e buyi ng i t , had you hear d t he r ec or di ng or t he per f or mer on: r adi o or t el evi si on, l i ve c onc er t s, r ec or ds,
pr er ec or ded c asset t es or CDs,t apesmadebyyouor ot her s?
Total Record Cassette CD
(897) (170) (611) (98)
Radio or TV . . . . . . . . . . . . . . . . . . . . . . 79 83 79 78
Live concert . . . . . . . . . . . . . . . . . . . . . . . 21 18 22 24
Prerecorded records, cassettes, CDs . . . . 53 53 52 64
Tapes made by you or others . . . . . . . . . . . 24 30 22 27
Tabl e 8-13.-Tapi ng Ex pec t at i ons f or Most Rec ent Pur c hase
Quest i on 34b(1): At t he t i me you bought t hi s (r ec or d/c asset t e/CD) di d you ex pec t t o t ape f r om i t ?
Total Record Cassette CD
(894) (167) (620) (104)
Yes, expected to tape . . . . . . . . . . . . . . . . . 14 35 8 16
No, did not expect to . . . . . . . . . . . . 81 63 91 82
Not sure . . . . . . . . . . . . . . 1 2 1 1
Tabl e 8-14.-Have Taped Most Rec ent
Question 34C: Have you made a tape from this (record/cassette/CD)?
(Base: past year purchasers)
Pur c hase
Unweighed Not
base Yes No sure
Total: . . . . . . . . . . . . . . . . . ( 897) 11 87 1
Age:
10-14, ,,,.... . . . ( 33)
15-19 .,,,.,.., . . . . . . . . . . . . ( 102)
2 ( - 2 4 . , . , , , , , , , . , , , . . . , , , , , . ( 108)
2 5 - 2 9 . . . . , , , , . . , . , , , , . , , , . . . ( 127)
3034. . . . . ., .,,,. ( 124)
3564. . ( 348)
65+ ,,,,. . . ( 51)
28
11
16
9
9
8
2
72
85
81
89
90
90
94
Tabl e 9-1.Voi c e Rec or di ng i n Past Year

Question 41a: in the past year, have you used an audio recorder to tape anythingelse (other than music from either radio, televi-
sion, records, tapes, or CDs) at home, including voices, answering machine messages, and dictatlon?
Unweighed Not
base Yes No sure
Total: ..,. ,, .,.,..,, ,, (1,501) 32 67
*
Age:
10-14. .
1 5 - 1 9 .
20 24
25 29. .:._::: :::.
30-34., ,.,,,, ,. ...::
35 64.. ,,,. .,
6 5 + .
( 57)
( 118)
( 140)
( 173)
( 180)
( 619)
( 197)
49
53
42
36
36
29
9
51
46
57
64
64
70
91
1
1
1
Sex:
Mal e . . . . . , , , , . . , . . . . , . . . . , , ,
Female . . . . . . . . . . . .
( 594)
( 907)
33
32
67
68
*
q
Race:
White . . . . . . . . . . . . . . . . . .
Black . . .
(1,288)
( 131)
33
34
67
66
q
Tabl e 9-3. - Rec enc y of Voi c e Tapi ng
Quest i on 41C: When was the last time you made a r ec or di ng of (t hi s/any of t hese) t ype?
Unweighed Past Past Past Year Not
Total: . . . . . . . . . . . . . . . . . . . . . . . (1,501) 9 7 13 2 1 68
Age:
10-14 . . . . . . . . . . . . . . . . . . ., ( 57)
15-19 ......., . . . . . . . . . . . . . ( 118)
20-24 . . . . . . . . . . . . . . . . . . . . . ( 140)
25-29 ..., . . . . . . . . . . . . . . . . . ( 173)
30-34 . . . . . . . . . . . . . . . . . . . . . ( 180)
35-64 . . . . . . . . . . . . . . . . . . . . . ( 619)
65+ . . . . . . . . . . . . . . . . . . . . . . ( 197)
10
11
16
14
7
9
2
10
14
10
3
11
6
2
17
25
15
12
13
13
2
7
5
1
3
3
1
1
2
2
1
1
1
54
46
58
66
64
72
93
sex:
Male. . . . . . . . . . . . . . . . . . ( 594)
. . . . . . . . . . . . . . . . . . . . ( 907)
10
8
7
7
11
14
2
2
1
1
69
68
Race:
White . . . . . . . . . . . . . . . . . . . . . (1,288)
Black . . . . . . . . . . . . . . . . . . . . ( 131)
13
13
2
2
9
6
6
12
1 68
66
Income:
Less than $5,000 . . . . . . . . . . . ( 57)
$5,000- $9,999 . . . . . . . ( 104)
$10,000 -$19,999 ( 238)
$20, 000- $29, 999 : : : : : : : : : : ( 258)
$30,000-$39,000 . . . . . . . . . . ( 206)
$40,000-$49,999 . . . . . . . . . . ( 140)
$50,000-$74,999 ( 118)
$75,000-$99,999 :::::::::: ( 37)
$100,000 or more . . . . . . . . . . ( 28)
Refused . . . . . . . . . . . . . . ( 173)
5
6
3
9
10
13
11
30
12
10
7
6
9
13
11
19
14
12
6
9
83
83
79
71
73
57
62
55
67
75
2
3
7
6
5
7
12
1
11
2
4
1
1
1
1
3
1
3
1
1
*
1
1
5
1
TabI e9-4. - Number of Voi c e Tapi ng Oc c esi onsi n Past Mont h
Quest i on 42: Dur i ng t he past mont h,on how many oc c asi ons, i n al l ,haveyou made an audi or ec or di ng of any of t hese k i nds?
Unweighed Not
base None 1-2 3-4 5-1o 11-30 31+ sure
Total . . . . . . . . . . . . . . . (1,501) 84 5 2 2 4 1 1
Age:
10-14 . . . . . . . . . . . . . . . . . ( 57)
15-19 . . . .,, .,, ..,..... ( 118)
20-24, . . . . . . . . . . . . . . . . ( 140)
25-29 . . . . . . . . . . . . . . . . . ( 173)
30-34 . . . . . . . . . . . . . . . . . ( 180)
35-64 . . . . . . . . . . . . . . . . . ( 619)
65+ . . . . . . . . . . . . . . . . . . ( 197)
80
76
74
84
82
86
96
7
6
7
4
7
5
2
2
9
2
2
4
2
4
3
8
5
4
4
1
6
2
1
q
q
1
4
8
2
2
2
1
1
1
2
*
1
*
1
q
Tabl e 9-9. Pr opor t i on of Tapi ng Oc c asi ons f or Voi c e Tapi ng
Unweighed
base Percent
Total: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,501) 73
Age:
10-14 ,,, ,,, ,,,,,,, ,., . . . . . . . . . . . . . . . . . . . . . . . . . . ( 57) 36
15-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 118) 46
20-24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 140) 73
25-29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 173) 94
30-34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 180) 85
35-64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 619) 85
65+ .,.. .,..... ,,, ,.,,... . . . . . . . . . . . . . . . . . . . . . . . . . ( 197) 88
Tabl e 10-6.-Number of Made Tapes i n l nvent or y by Dual Casset t es
Question 29f: Of the audio tapes you own, how many are audio tapes that you have made?
Dual cassettes
Unweighed Not Not
base Yes No asked sure
Number of audio tapes
N o n e , , . , . . , , , , , , . , . , , . , . (611) 24 57 14 5
1-10, ,,,., . . . . . . . . . . . . . . . . . . (432) 51 44 3 2
1 1 - 2 5 . . . , . . . . . (162) 50 47 2 1
26-50 . . . . . . . . . . . . . . . . . . . . . . . . . . (101) 48 49 2 1
5 1 - 1 0 0 . . ( 42) 42 58

1 0 0 + ( 26) 65 30
4
N o t s u r e , . ( 40) 32 39 18 10
Tabl e 10-7. - Number of Made Tapes by Fast Dubbi ng
Quest i on 29f : Of t he audi ot apes you ow n, how many ar e audi ot apes t hat you have made?
(Base: have dual cassette)
Fast dubbing
Unweighed Not
base Yes No sure
Number of made tapes:
None . . . . . . . . . . . . . . . . . . . . . . . . . . (142) 59 24 18
1-10 ......., . . . . . . . . . . . . . . . . (232) 62 25 13
11-25 ...., ., . . . . . . . . . . . ( 82) 76 21 4
%-50 . . . . . . . . . . . . . . . . . . . . . . . ( 50) 71 20 9
51-100 ......., . . . . . . . . . . . . ( 18) 72 18 10
100+ . . . . . . . . . . . . . . . . . . . . . . ( 17) 84 2 14
Not sure . . . . . . . ., . . . ( 14) 58 31 11
Tabl e 11-1. Fami l i ar i t y Wi t h Copyr i ght
Question 55: How familiar would you say that you are with copyright laws and their application to home audiotaping? Would
you say that you areextremely familiar, quite familiar, slightly familiar, or not at all familiar?
Past year music taping
Total None Broadcast Prerecorded Both
How familiar . . . . . . . . . . . . . . . (1501) (969) (126) (194) (212)
Extremely . . . . . . . . . . . . . . . . . . . . . . . . . . 6 5 6 5 8
Quite . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 15 17 16 24
Slightly . . . . . . . . . . . . . . 42 41 49 46 43
Not at all . . . . . . . . . . . . . . . . . . . . . . . 34 38 28 31 25
Not sure ,.. . . . . . . . . . . . . . . 1 1 1 1 1
Question 54:
Table n-2.-Acceptability of Taping Practices: Total
I am going to read you some things that people sometimes do. For each, ld like to know how acceptable you would
feel this action to be. Using a scale of 1 to 7, where 7 means that the action is perfectly acceptable to do in your
opinion and 1 means that the action is not at all acceptable t o do, how w oul d you r at a t he acceptability to you of
(READ ITEM) or dont you have an opinion on that?
Not at all
acceptable
to do
Perfectly
accept abl e No
to do opinion
a
b
c.
d
e.
Making a taped
copy for your own
use of a record,
cassette, or CD that
you own .,
Making a taped
copy to give to
a friend of a record,
cassette, or CD that
you own ., .,
Mailing a taped
copy to sell of a
record, cassette,
or CD that you
own . . . . . . . .
Making a taped
copy for your own
use of a complete
record, cassette,
or CD that you
b o r r o w e d
Making a taped
copy for your own
use of selec tions
from several records,
cassettes, or CDs that
y o u b o r r o w e d
1 2 3
7 2
13 5
67 3 6
15 5
13 2 6
4
5
7
3
7
7
5 6 7 8
10
12
5
14
8 57 9
11 40 8
5 8
10 38 8
13 11 40 8
Unweighted base= 1,501
Tabl e 1 l -3. -Ac c ept abi l i t y of Tapi ng Pr ac t i c es by Tapi ng Behavi or
Quest i on 54: I am goi ng t o r ead you some t hi ngs t hat peopl e somet i mes do. For eac h, I d l i k e t o k now how ac c ept abl e you w oul d
f eel t hi s ac t i on t o be. Using a scale of 1 to 7, where 7 means t hat t he ac t i on i s per f ec t l y ac c ept abl e to do in your
opinion a nd 1 means t hat t he actioniIs not at all acceptable to do, how w oul d you r at e t he ac c ept abi l i t y t o you of
(READ I TEM) or dont you have an opi ni on on t hat ?
(mean score)
Radio Prerecorded Radio and Signif -
None only only prerecorded icance
a.
b.
c.
Making a taped
copy for your own
u se of a record,
cassette, or CD
that you own . . . . . . .
Making a taped
copy to give to a
friend of a record,
cassette, or CD
that you own . . . . . .
Making a taped
copy to se// of
a record, cassette,
or CD that you
own . . .
d. Making a taped
e.
copy for your own

use of a c omplete
record, cassette,
or CD that you
borrowed . . . . . . . . .
Making a taped
copy for your own
use of selec tions
from several records,
cassettes, or CDs that
you borrowed . . . . . .
. .
. . . . . . . .
. . . . . . . .
. . . . . . . . . . . .
. . . . . . . . . . . .
. . . . . . . . . . .
(850) (121) (190) (208)
5.6
4.8
1.6
4.6
6.1
5.4
6.4 6.5
5.4 5.8
2.1 2.0 2.6
5.2 5.5 5.8
*
q
q
4.8 5.4 5.5 6.1
q
q Difference of means between Past Year Taper and No Past Year Taper (none) is statistically significant at the O 05 level with t wo-t ailed ttest.
Question 56:
Tabl e n-5.-Fai r ness of Cur r ent Pr ac t i c es: Tot al
People have different views on how fair current practices of audio taping are for different gr ou ps . On a scale of 1 to
7, where 7 means perfectly fair and 1 means not at all fair, how fair do you consider (ITEM) or dont you have an
opinion on that?
(Base: 17 years or older)
Not at
all fair
a.
b.
c.
4
1 2 3
Present practices
of home taping
from records,
prerecorded
audiocassettes, and
CDs are to the
r e c o r d i n g i n d u st r y . . 17 9
Present practices of
home taping from
records, pre-
recorded audiocassettes,
and CDs are to
song wri t ers a nd
p e r f o r m e r s . , . , . , 17 5 8
Present practices of
home taping from
records, audiocassettes,
and CDs are to the
a v e r a g e c onsumer . . 9 3 6
4
9
10
10
Perfectly Not
fair sure
5 6 7 8
13 7 19 23
13 6 19 22
16 8 26 23
Unweighted base= 1,366
Tabl e n-8.-At t i t udes About Changes: Tot al
Quest i on 57: Now using the same scale running from 1, meaning not at all fair, to 7, meaning perfectly fair, Id Iike to know how
fair you think each of the following suggestions would be or dont you have an opinion?
(Base: 17 years or older)
Not at
all fair
a.
b
c.
d
e.
1 2 3
New audio recorders
should be built so they
cant copy commercial
recordings . . . . . . . . 42 6
Audio recordings
should be made so they
cant be copied . . . . . . . 41 7
A fee should be charged
on audio recorders and
paid to copyright holders
to compensate them for
home taping ., 42 8
A fee should be charged
on blank audiotapes and
home taping ., . . . . . . 48 6 5
Current home taping
8
7
7
practices should be
left unchanged . . . . . . . . 7 1 4
4
6
6
6
7
6
Perfectly Not
f a i r sure
5 6 7 8
5 3
6 4
14
17
15
12
7 3 11 16
6 3 8 16
10 7 46 19
Unweighted base: 1,386
Tabl e 11-9.At t i t udes About Changes by Tapi ng Behavi or
Question 57: Now using the same scale running from 1, meaning not at all fair, to 7, meaning perfectly fair, Id like to know how
fair you think each of the following suggestions would be or dont you have an opinion?
(mean score)
Radio Prerecorded Radio and Signif-
None only only prerecorded icance
a. New audio recorders
should be built so they
cant copy commercial
recordings . . . .,
b Audio recordings should
be made so they cant
be copied ., . . . . .
c A fee should be charged
on audio recorders and
home taping . . . .
d. A fee should be charged
on blank audiotapes and
home taping . . . . . . . . . .
e Current home taping
practices should be
left unchanged ... ., .
(759) (92) (166) (154)
3,2 2.8
3.5 3.0
2.2
2.5
2 2
2 2
3.0 2.4 2.3 2,4
2.6 2.2 2.4 2 2 N.S.
5.4 6.1 6.0 61
*
q Difference of means between Past Year Taper and No Past Year Taper (None) IS statistically significant at the O 05 level with two-tailed t-test
N S = not sure
Tabl e 12-8.-Most Rec ent Ac qui si t i on: Type of Tape
Quest i on 5b: Was t hat a pr er ec or ded vi deot ape t hat you pur c hased, a pr er ec or ded t ape t hat someone el se pur c hased f or you, a
pr ogr am t hat you r ec or ded f r om I V, q vi deot ape t hat you c opi ed, or a vi deot ape someone made f or you?
(Base: Past year acquisition)
Prerecorded Program Tape Video Never
purchased by recorded copied by camera acquired Not
Self Other from IV Self Other tape tape sure
Total: . . . . . . . . . . . . . . . . . . . . . . .
Age:
17-19 . . . . . . . . . . . . . . . . . . . . .
20-24 . . . . . . . . . . . . . . . . . . . . .
25-29 . . . . . . . . . . . . . . . . . . . . .
30-34 . . . . . . . . . . . . . . . . . . . . .
35-64 . . . . . . . . . . . . . . . . . . . . .
65+ . . . . . . . . . . . ., . . . . . . . .
P/ace:
ci t y . . . . . . . . . . . . . . . . . . . .
Suburb . . . . . . . . . . . . . . . . . .
Rural . . . . . . . . . . . . . . . . . . . .
Region:
East . . . . . . . . . . . . . . . . . . . . . .
Midwest . . . . . . . . . . . . . . . . . . .
south . . . . . . . . . . . . . . . . . . . . .
west . . . . . . . . . . . . . . . . . . . . .
Income:
Less than $5,000 . . . . . . . . . . . .
$5,000- $9,999 . . . . . . . . . .
$10,000-$19,999 . . . . . . . . .
$20,000-$29,999 ~ . . . . . . .
(717)
( 37)
( 84)
( 91)
(1 18)
(351)
( 31)
(210)
(341)
(166)
(152)
(166)
(234)
(165)
( 22)
( 27)
( 92)
(132)
23 4 54 2 10 3 2 2
22
21
16
27
24
15
3
6
3
2
3
4
46
53
64
53
54
52
3
5
2
5
1
24
13
11
5
7
24
1 2
3
1
1
1
1
.
3
6
4
4
q
5

20
23
25
3
5
2
57
55
49
8
9
15
3
4
1
6
3
2
1
2
1
3
3
21
23
24
21
3
2
4
6
55
55
52
58
2
5
1
2
10
8
14
5
3
4
3
3
6
1
q
2
2
1 3
16
43
30
21
21
21
26
19
5
q
3
3
7
2
7
53
47
52
49
56
56
55
54
11 5
10
9
12
12
11
8
7
11

3
4
4
1
4
2
3
5
11
5
5
1
3
2 $30,000-$39,999 . . . . . . . . . . . . . (130)
$40,000 -$49,999 . . . . . . . ( 93)
$50,000-$74,999 . . . . . . . . . . ( 89)
$75,000+ . . . . . . . . . . . . . . . . . ( 46)
Appen d i x COTA S urvey Tables .287

Table 12-10.-Permanent v. Temporary Use: Tapes Recorded From Television
Question 5d: Did you make that tape to keep or t o use onl y t empor ar i l y?
Unweighed Keep Keep Not
base permanently temporarily sure
T ot a l : . . . . . . . . . . . . . . . . .
Age:
17-19, . . . . . . . . . .,
2(-24 ... ., ...
25-29 . . . . . . . . . . . . . .
30-34 . . . . . . . . . . . . . .
35-64 . . . . . . . . . . . . . . . .
65+ ,., . . . . . . . . . . . ,. ,,,
Place:
ci t y
Suburb ::::::: :. ::::. . :::::. ::: :
Rural . . . . . . , , , . , . , . , , , , , . , , . . . .
Region
East . . . . . . . . . . . . . . . . . . . .
Midwest . . . . . . . . . . ..,., .
south . . . . . . . . .
West . . . . . . . . . , , . , , . . . . : : : : : : : :
Income:
Less t han $5, 000. . , . . . . .
$5,000-$9,999 . . .
$10,000-$19,999 . . . . . . .
$20,000-$29,999 . . .
$30,000-$39,999 . .
$40,00(-$49,999 : : : . : . : : .:.::....
$ 5 0 , 0 0 ( - $ 7 4 , 9 9 9
$75,000- . . . . . . :::::.,
( 388) 35 62 3
( 16) 52 4a
( 44) 39 58 3
( 55) 38 61 1
( 68) 42 55 4
( 189) 30 67 3
( 15) 41 59
( 121) 38 59 3
( 186) 36 62 2
( 81) 31 64 5
( 88) 36 60 4
( 94) 28 69 4
( 121) 35 62 3
( 85) 44 56
( 11)
( 15)
( 48)
( 67)
( 74)
( 53)
( 49)
( 23)
58
45
34
38
43
28
26
25
42
55
66
60
57
65
63
75
2
1
6
11
Tabl e 12-11. Per manent v. Tempor ar y Use by Pr ogr am Type
Question 5c: What kind of program were you recording?
Question 5d: Did you make that tape to keep or to use only temporarily?
To To use Not
keep temporarily sure
Movie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Soaps/soap opera . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comedy series/sit-com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dramatic series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mini-series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sports/sporting events . . . . . . . . . . .
Cartoons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other childrens programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Daily/nightly/weekend news . . . . . . . . . . ,. .
News specials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Documentaries (unspecified) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current events programs . . . . . . ..., . . . . . . . . . . . . . . . . . . . . . . . . .
Talk shows . . . . . . . . . . . .
Educational programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Science programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Home repair/car repair/how to . . . . . . . . . . . . . . . . . . . . . . . . . .
Concert/music video/music special . . . . . . . . . . . . . . . . . . . . . .
Other variety/entertainment programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other specials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other, ,,..,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dont know/not sure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44 51 4
3
21
27
52
97
79
73
39
9
1 18 80
88
32
12
68
100
71
45
100
29
55
21 79
62
24
100
38
51
.
24
80
62
20
38
100
.
40 60
78 22

Tabl e 12-12.-Ever Copi ed Pr er ec or ded Vi deot ape
Question 6a: Not counting recordings made from television or home videocameras, have you ever copied a videotape
(prerecorded or home recorded) either for yourself or for someone el se?
(Base: past year tape acquisition)
Unweighed Not
base Yes No sure
Total: . . . . . ., ., ., . . . .
Age:
17-19 . . . ., ., . . . . . . . .
20-24 . : : ... .,
25-29 . . . . . . . . . . . . . .
3(-34, ., .
3564 .,.,,,,.,,.,,,,,,
65+ . . . . . . . . . . . . ,,,,...
Race:
Whi t e . , , . , . . ,
Bl ack . . , . , , , . . . , . : : : :::: . :
Sex:
M a l e
Female ,. . .....::::::.
Income:
Less than $5,000 .,,,... . . . . . . . . .
$5,000-$9,999 . . . .
$10,000-$19,999 . .
$20,000-$29,999 . . . . .
$30,00-$39,999
$40,000-$49,999 : :, ::.:.:.:
$50,00(-$74,999 . . . . . . . . . . . .
$75,0004 . .
(693)
( 35)
( 82)
( 90)
(115)
(337)
( 30)
(613)
( 48)
(278)
(415)
( 20)
( 27)
( 87)
(127)
(127)
( 92)
( 88)
( 44)
20
18
24
22
25
18
6
19
32
23
17
16
3
19
20
22
24
20
21
80
82
76
78
73
81
94
81
68
77
82
84
97
81
80
78
76
79
79
q
1
1
1
1
1
Tabl e 12-19.-Most Rec ent Copy: Coul d Have Pur c hased on Pr er ec or ded
Quest i on 6h: To t he best of your k nowl edge, could you have purchased that on prerecorded tape, if you had wanted?
(Base: copied within past year)
Unweighed Not
base Yes No sure
Total: . . . . . . . . . . . . . . . . . . . . . . . . . . . (93)
Age:
17-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 3)
20-24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14)
25-29 ....., . . . . . . . . . . . . . . . . . . . . . . . (14)
30-34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19)
35-64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40)
65+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 2)
Place:
city . . . . . . . . . . . . . . . . . . . . . . . . (26)
Suburb . . . . . . . . . . . . . . . . . . . . . . . (44)
Rural . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23)
Region:
East . . . . . . . . . . . . . . . . . . . . . . . . . . (23)
Midwest . . . . . . . . . . . . . . . . . . . . . . . . . . . (27)
south . . . . . . . . . . . . . . . . . . (22)
west . . . . . . . . . . . . . . . . . . . . . . (21)
35
45
52
31
27
67
37
42
15
30
41
45
17
57
76
52
48
61
61
33
59
55
58
62
4a
46
77
8
24
4
8
12
4
3
27
8
11
8
6
Tabl e 12-21.Ever Copi ed Pr er ec or ded Vi deo Tape: Musi c Taper s
Quest i on 6A: Not c ount i ng r ec or di ngs made f r om t el evi si on or home vi deoc amer as, have you ever c opi ed a videotape
(prerecorded or home recorded) either for yourself or for someone else?
(Base: acquired tape in past year)
Not
base Yes No sure
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (693) 20 80
q
No music taping
in past year . . . . . . . . . . . . . . (407) 12 88
*
Taping from radio
only . . . . . . . . . . . . . . . . . . . . . ( 62) 16 84
Taping from records/

tapes/CDs only . . . . . . . . . . . . . . (114) 30 88 2
Taping from both
broadcast & pre-
recorded formats . . . . . . . . . . . . . . . . . . . (110) 39 80 1
Tabl e 12-22 .- Most Rec ent Ac qui si t i on: Musi c Taper s
Question 5b: Was that a prerecorded videotape that you purchased, a prerecorded tape thats omeone else purchased for you,
a program that you recorded from IV, a vi deot ape t hat you c opi ed, or a vi deot ape someone made f or you?
(Base: acquired tape in past year)
Prerecorded Program Tape Tape
purchased by recorded copied by copied by
self from TV self other
Total . . . . . . . . . . . . . . . . . . . . . .
No music taping
in past year . . . . . .
Taping from radio
only . . . . . . . . . . . . . . .
Taping from records/
tapes/CDs only . . . . . .
Taping from both
broadcast &
prerecorded
formats ., . . . . . . . . . . . . . . . . .
Base:
(717) 23 54 2 10
(
(
(
22) 27 49 2 10
65) 18 68
4
16) 16 60 3 8
(1 14) 18 59 4 14
Ap p e n d i x D
Li st of Con t r a ct or Rep or t s
Con t r a ct or Docu men t s : Vol ume I
Schulman, Ronca, and Bucuvalas, Inc.
S urvey of Home Taping and Copying: Final Report, Vol. 1: Executive Summary,
Feb. 10, 1989.
S urvey of Home Taping and Copying: Final Report, Vol. 2: Detailed Findings on
Home Audio-taping, Feb. 9, 1989.
A S upplementary Report on Home Videocassette Copying and Taping, Feb. 16,

1989.
Cont r a ct or Document s: Vol ume I I
William R. J ohnson
Estimating the Effect of Copying on the Demand for Original Creative Works,
i&r. 3, 1989.
Michael L. Kat z
Home Copying and Its Economic Effects: An Approach for Analyzing the Home
Copying S urvey, Mar . 9, 1989.
Fr ed L. Manner ing
Consumer Welfare and Audio Home-Copying Restrictions: An Empirical Assess-

ment, Feb. 13, 1989.
NOTE: Copies ar e available fr om t he Nat ional Technical Infor mat ion Ser vice,
5285 Por t Royal Road, Spr ingfield, VA 22161-0001. Telephone: (703)
487-4650.
293

Copyright and Home Copying: Technology Challenges and The Law

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Copyright and Home Copying: Technology

Challenges the Law

Chapter 1S ummary, Is s ues and Options .27

Chapter 2Technological Change and Home Copy ing q 4 1

Chapter 2Technological Change and Home Copy ing q 4 3

Chapter 2Technological Change and Home Copy ing .51

Chapter 2Technological Change and Home Copy ing q 5 7

Chapter 2Technological Change and Home Copy ing q 6 1

Chapter 3Legal As pects of Copy right and Home Copy ing q 8 7

Chapter 4An Overview of the U.S. Recording Indus try .93

Ch a pt er 6Th e OTA S u r vey q 161

Chapter 7Economic Perspectives on Home Copying .185

WA copy of the questionnaire is in appendix B (see quest ions 43 ~d 44).

0 8 . Whi c h of t he f ol l owi ng c a t e gor i e s best descr i bes how much you

Tabl e 6-12 (Abbr evi at ed).-End User of Copy

Tabl e 8-3.-Woul d Pur c hase

Tabl e 8-11.Hear d Bef or e Buyi ng on...

Tabl e 9-1.Voi c e Rec or di ng i n Past Year

copy for your own

Appen d i x COTA S urvey Tables .287

Appen d i x COTA S u r vey Ta bl es q 289

Taping from records/

A S upplementary Report on Home Videocassette Copying and Taping, Feb. 16,

Consumer Welfare and Audio Home-Copying Restrictions: An Empirical Assess-

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