Broadcasting (July - Dec 1940)

NAB and IRNA Authorize BMI To Buy Catalogs 'Blank Check' Is Given Music Subsidiary at Joint Session (Continued from page 11) cepting them. This analysis is going to NAB members and non-members alike [See page 77]. The joint session was preceded by several meetings of the BMI board and followed by similar meeting on June 22 and 24. The June 24 meeting marked resumption of BMI duties by Edward Klauber, CBS vice-president who has just returned to his office following an extended illness and whose place in the BMI councils during his absence had been filled by Mr. Paley. BMI membership has reached the 300 mark, the organization reported, with the receipt of agree ments from seven additional stations — WBRY, Waterbury; WGTC, Greenville; WPRO, Providence; KFAB and KFOR, Lincoln, KOIL, Omaha, and WLS, Chicago. More significant, however, was the strength of the support BMI is receiving from the industry as evidenced by the response to its call for 15% of the license fee. The call was issued June 7 with June 17 as the due date. By June 19, 80% of the total amount had been paid in. M. E. Tompkins, vice-president and general manager of BMI, said that to get 80% without a second call would have been a good record but to get it in two days "is a really remarkable demonstration of the solidity of the industry behind BMI." In one of its first official attempts to interest the advertising fraternity in BMI and to get advertisers to begin using BMI music on commercial programs, BMI has written to the Assn. of National Advertisers outlining the disagreement of the broadcasting industry with ASCAP and explaining the purposes and operations of BMI. The letter points out the position of the advertiser as the ultimate source of radio's income and shows how increased musical costs will be inevitably reflected in the advertiser's bills for his broadcasting activities. At ANA headquarters It was stated that the letter was being studied with interest but that no action had been taken. Creative Work New compositions averaging better than one a day are being issued by BMI in addition to which its arranging staif is turning out about ten new arrangements of public dsmain music daily. As the BMI supply grows, network program executives are laying plans for extensive use of such tunes on all sustaining programs. It is understood that all orchestras picked up by the networks for late evening broadcasts soon will be required to include at least one BMI number in each 15 minutes on the air and that the requirements will be gradually raised until by the end of the year little ASCAP music will be heard on sustaining programs. In mailing out the ASCAP contracts June 18 to both networks and stations, John G. Paine, ASCAP general manager, sent to stations a covering letter in which he essayed to outline virtues of the new proposals. BMI promptly countered with an announcement in which it ASCAP'S BLIND MAN'S BLUFF THE MOST hopeful sign on the copyright horizon is the total absence of hysteria among broadcasters over the ASCAP efforts to stampede stations into signing new performing rights contracts and thereby continuing its domination of music when current agreements expire Dec. 31. The truth is, ASCAP's bluff has been called. Broadcast Music Inc., with a 300-station membership and the unqualified support of NBC and CBS, provides the defensive preparation that has made this possible. A joint meeting of the boards of NAB, BMI and Independent Radio Network Affiliates was held in New York June 21. BMI was given a vigorous vote of confidence and, in effect, a blank check to carry on its work in providing an industry-owned music supply. CBS President Paley and NBC President-Designate Trammell were there to renew pledges of continued support. They are in the music councils. It is clear they do not propose to capitulate to the ASCAP proposition for a 7%% gross music tax, and that they will contribute substantially to the BMI war chest, convinced that by Jan. 1 ASCAP music will not originate from their key stations. There will soon be important developments through BMI. It is folly to think there is enough non-ASCAP music in its possession to bridge the ASCAP gap at the turn of the year. New catalogs will have to be acquired either by direct purpose or through other original means. More funds will be needed. But if ASCAP is not to be paid tribute after Dec. 31, those funds should be available from stations and networks in sufficient amount to make possible these music purchases without increasing unduly the music costs of stations. Unlike the 1932 and 1935 contract crises, ASCAP also has been forced to change its tactics. It has learned that the broadcasting industry is a solid phalanx in its copyright reasoning and can't be split at will. It also has ascertained that the Department of Justice is dead serious in the revival of its anti-trust suit, along criminal lines. As things stand, the broadcasting industry has better than a fighting chance without ASCAP's vaunted catalogs. By pursuing the course prescribed, and by keeping its head, it can rid itself forever of the ASCAP menace of being "percented" to death. ASCAP Law Adjudged Within Court's Power DECISION that the question of the legality of the anti-ASCAP legislation of the State of Washington falls within the jurisdiction of the Federal District Court in that State has been handed down by Special Master Archie Blair, who conducted a special hearing on the subject in Tacoma last fall, from Oct. 26 to Nov. 3. Testimony centered around the question of whether the statute involved a minimum of $3,000, amount necessary for a Federal court to assume jurisdiction [Broadcasting, Nov. 16]. Decision upholds ASCAP's contention that more than $3,000 is involved and the test of the law's legality may now go before the three-judge Federal court. If the decision had gone the other way the case would have been remanded to the State Court, which has already suspended the statute. Stipulations were made that the testimony given at the hearing before the special master may be used in the trial on merits. Herman Finkelstein, of the firm of Schwartz & Frohlich, ASCAP attorneys, who presented the ASCAP testimony at the Tacoma hearing last fall, told Broadcasting that ASCAP may rest on the record and not present further testimony, although that has not yet been definitely decided, he said. ASCAP Phig ENVELOPES sent out by ASCAP now carry the slogan "Justice for Genius," stamped beside the meter postmark. held that the letter "does a fairly smooth job of camouflage" and then proceeded to uncover the loopholes. The four-page Paine letter explained the terms of the licenses which are essentially the same as those outlined last March [Broadcasting, April ]. The ASCAP "single station license" for five years — ■ offers the right to perform ASCAP music "by non-visual broadcasting", for fees based on percentages of gross income that vary with the size of that income. Stations grossing less than $50,000 annually are assessed 3%; stations grossing between $50,000 and $150,000 are assessed 4% ,and stations grossing more than $150,000 are assessed 5%. In addition each of the first class of station must pay a sustaining fee of $12 a year and the other classes sustaining fees the amount of which is not specified in the license form. In his letter, Mr. Paine explains that stations grossing over $150,000 will pay the same sustaining fee as at present, while stations in the middle class will have a 25% reduction in their present sustaining fee. These fees, it is reported, are not based on any set standard but rather on the individual station's bargaining power. Discrepancy Explained The apparent discrepancy in the single station license between the statement in Subdivision IV, Section A, that the gross amount shall include income received for "rebroadcasting programs originating in other stations" and that in Sub division V, Item (e) that "Licensee shall not be required to account for sums received for .... rebroadcasting programs originating in other stations" is not really a contradiction, ASCAP explained upon Broadcasting's inquiry. The first reference is to the calculation of income for the purpose of classifying stations into income groups, with income from network programs included. In figuring actual payments to ASCAP, however, the station does not have to include revenue from network commercials, as they have been paid for at the source under the terms of the network license. ASCAP's chain broadcast license, covering "chain hook-up" broadcasts including "two or more stations" as listed in the contract "over or through or by which programs shall be transmitted simultaneously, furnished by or through or by arrangement with Licensee," follows the safe general form and contains the same general provisions as the single station license. For such a license the network agrees to pay ASCAP 71/2% of what the advertiser pays for the network facilities, plus "the sum of $2,500 per station per year" for any stations included in the network that have not taken out individual licenses. All stations owned, controlled or operated by the network must have individual licenses, whether or not they are included in the stations listed in the network contract. There are no network sustaining fees. Queried as to the flat 7i^% for all network programs, regardless of the extent of the network, called for in the license, ASCAP officials stated that in the actual negotiations of the contracts the size of the network will be taken into consideration. Reiterating the statement previously made by Mr. Paine [Broadcasting, April 1], Rosenbaum Quits BMI j BECAUSE of pressure of business f matters in Philadelphia, Samuel R. ' Rosenbaum, president of WFIL and chairman of Independent Radio Network Affiliates, resigned June 18 as a member of the board of directors of Broadcast Music Inc. He was immediately succeeded by Paul W. Morency, general manager of WTIC, Hartford, and vice-chairman of IRNA, to represent network affiliates on the organization. Engrossed in the handling of litigation affecting A. H. Greenfield Co., where he is second-in-command, Mr. Rosenbaum tendered his resignation "with sincere regret" prior to the BMI meeting June 18 in New York. Another 'Info Please' Suit TEMPORARY injunction was granted June 24 by New York Supreme Court Justice Bernard L. Shientag to Daniel and Ann Golenpaul, owners of the NBC program Information Please, restraining the use of the name "Information Please" in connection with radio "designs or motifs" on fabrics made or sold by M. Lowenstein & Sons and Aleo Mills, New York. Suit was filed May 6 by the Golenpauls seeking injunction, accounting of profits and $20,000 damages. The judge ruled that the use of such designs was "a deliberate attempt on the part of the defendants to avail themselves of the goodwill built up by the plaintiffs in connection with their prior exploitation of the trade name which, as a result of advertising and skill, has attained a clear and distinct secondary meaning." "ASCAP reserves the right to distinguish between networks as it does between individual stations," they explained that in all cases the competitive situation would be considered. Intra-state hook-ups may be charged only 3% or 5% of their gross incomes, depending on their make-up and coverage, the 1V2% figure included in the contract being the maximum charge which will bs made of nationwide netthat works, it was stated. Page 76 • July 1, 1940 BROADCASTING • Broadcast Advertising