Broadcasting (July - Dec 1936)

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Supplement to AUGUST 1, 1936 ISSUE il&©AD€A§TOINl€ arvd Broadcast Advertising Vol. 11 No. 3 WASHINGTON, D. C, AUGUST 1, 1936 SUPPLEMENT Warner Returning to ASCAP Fold Formal Accord in a Few Days Expected, Ending All Suits and Giving Radio Full Catalog at No Added Cost FIRST FORMAL steps toward the return of Warner Brothers to the American Society of Composers, Authors & Publishers were taken in the offices of E. C. Mills, general manager of ASCAP, during conferences held July 31 — conferences which will resume Monday, Aug. 3, with "good prospect" for an accord by the following day. The preliminary discussions were guarded with careful secrecy, and no statement could be secured from the participants who included, in addition to Mr. Mills, the counsel for Warner Brothers, Joseph H. Hazen, and the late Nathan Burkan's successor as counsel for ASCAP, Charles Schwartz. From thoroughly reliable sources, however, Broadcasting learned the afternoon of July 31 [after this Aug. 1 issue had already come off the press, thus necessitating this insert] that an accord is near which will elimi nate all demands of Warner Brothers for licenses to utilize its catalog and which will automatically lead to the withdrawal of all of Warner Brothers' great mass of infringement suits, totaling more than 200 cases in which nearly $4,000,000 in damages are sought from radio stations and networks. It is planned that Warners' return to the ASCAP fold shall be retroactively dated as of July 1, 1936, thus making its official realiiance with ASCAP effective exactly one half year after it withdrew its catalog of approximately one third of ASCAPlicensed music in order to get licenses of its own from radio. Although no official list of Warner licensees has ever been divulged by that company, it is understood that approximately 180 stations have signed Warner contracts, over and above their ASCAP contracts, and under the Warner licenses are paying up to four times their highest hourly commercial rates for the right to perform Warner music. The July 31 negotiations were marked by the absence of Herman Starr, Warner executive, who conducted the original negotiations with ASCAP leading to the Warner-ASCAP break and who later conducted the negotiations with NAB which led to the signing of its contracts by many stations. Mr. Starr, it was learned, has been withdrawn by the Warners from the copyright negotiations entirely and does not figure in the present deliberations in any way. None of the Warner brothers was present at the July 31 conference, which was called, it is understood, at the behest of Warner in an effort to make peace with radio via the ASCAP route. The July 31 conference was very close to final agreement, but had to be deferred over the weekend to await the return of various parties needed for the final settlement, including one unnamed person scheduled to arrive in New York Aug. 3 on the SS Normandie. Gene Buck, ASCAP president, was not present, being away in San Francisco. It is expected the ASCAP board will meet Aug. 3 or 4 to ratify an agreement with Warner. Warner, as had been previously indicated, will secure no concessions from ASCAP looking toward an increased "take" to it from the ASCAP copyright pool. Nor will ASCAP's income from radio be increased under its present licenses beyond the normal increases coming from the larger commercial business done by the stations. Warner withdrew from the ASCAP pool last Jan. 1 because it objected to its share of the ASCAP split and suggested that the networks as such shall be required to take out copyright licenses — a proposal which the networks countered by barring the use of all Warner music on their owned and managed stations as well as on the networks, with devastating effects upon the popularity of Warner songs and with no discernible ill effects to either network or station program popularity. With the Warner musical supply back in ASCAP, stations now holding ASCAP licenses will have available the same supply of old and current songs and arrangements they had before Warners withdrew — and at no additional cost during the life of their present ASCAP contracts. Nearly all stations have ASCAP licenses, and practically all are dated to expire Dec. 31, 1940, having been signed as of last Dec. 31 for five-year renewals under ASCAP's arbitrary "sustaining fee" plus 5% of commercial revenues (except for a few special contracts such as the newspaper group and WCAU hold). It was not indicated whether Warner would rebate to the stations it has licensed the royalties collected during the first six months of 1936, but it is possible that individual negotiations will secure such rebates direct from Warner. ASCAP, it is believed, will not consent to be party to any Warner rebate deals, and is inclined to treat Warner, as will the radio industry, just as if no schism had occurred. The Aug. 3 board meeting of ASCAP will probably decfde whether Warner regains its old priority within the ASCAP organization. The collapse of the Warner Brothers' own music pool license scheme is due, it is said, to the relatively inconsequential revenues the big motion picture concern has been able to realize from those stations signing its proffered contracts; to the enormous expense of collecting, checking and suing; to the fear that many of its infringement suits might not hold up in court despite the $250 minimum damages in the antiquated copyright law levied even for innocent infringements; to the determination of many stations not holding Warner licenses to fight these suits, fortified by ASCAP's contractual obligation to insure substantially the same catalog of music they had as of Dec. 31, 1935, plus the implied obligation of ASCAP to join in defending these suits; and, more particularly, to the loss in prestige and box-office pull of Warner musical pictures due to their failure to secure "plugs" for their new songs over the networks and the non-licensed stations. What the effect of the reintegration of ASCAP will have on the government's anti trust suit against it, which still pends, it is too early even to conjecture. On the part of the broadcasting industry, the new situation somewhat clears the clouded atmosphere of the last six months created by the constant du ress of Warner infringement suits — and, what is more important, it means a fuller catalog of music from a central source of supply at no increased rates over existing ASCAP contracts. Whether the ASCAPWarner agreement contemplates increased rates for ASCAP licenses after Dec. 31, 1940, is anyone's guess at this juncture. It is a reasonable guess that, whether Warner stipulated it or not, ASCAP will then or earlier attempt to get more revenues out of the broadcasting industry by one device or another. In the meantime, however, many things can happen — possibly some "developments to the advantage of radio, depending upon the guidance and support acorded an organized industrv. [For other advance details of the ASCAP-Warner potential accord, se* Page 18 of this issue of Bro-jc,*' ing; also Page 60 of the v1 Broadcasting.]