Broadcasting (July - Dec 1940)

Quick Break Seen in ASCAP Monopoly Capital Is Alive With Rumors Of Action IF ASCAP MUSIC is on the air after current contracts expire Dec. 31, it probably will be as a result of a complete ASCAP capitulation, which will effectively break its monopoly of Tin Pan Alley. The answer, if one is found, will not come across the conference table between broadcasters and the ASCAP board, but as a result of legal intervention, by the Department of Justice. Though Government officials are close-mouthed, it nevertheless is apparent that things are happening at the Department in connection with revival of its five-year-old anti-trust suit against ASCAP and its 130 key officials and publisher members. Recently, it is learned, ASCAP has switched its attorneys handling Washington contacts and there have been frequent conferences with Anti-Trust Division attorneys. Action Imminent Whether the answer will come through active revival of the litigation along criminal lines, or through some consent agreement, is problematical. But if the activity apparent in Washington means anything, there will be action prior to the end of the year, along one line or the other. Involvement of the major networks in the revived criminal litigation also is a possibility, if that course is pursued against ASCAP. The Department has had access to the network-monopoly files of the FCC, accumulated at its investigation, and evidently feels there is some substance to allegations relating to suppression of competition in the transcription field and in maintenance of artists' bureaus by the networks. There does not appear to be any disposition to institute separate anti-trust proceedings against the networks at this stage, in any event. At the Department's Anti-Trust Division it was stated Nov. 29 that reports of action against the networks wei'e "premature". It was indicated the Department probably would not be disposed to take steps, if at all, until the FCC has completed action on the network-monopoly investigation (see Page 9). In its original suit against ASCAP, filed five years ago, the Department alleged that ASCAP was an illegal price-fixing monopoly in restraint of trade. Presumably, in an agreement to terminate this litigation, the Department will demand free and open competition in the mtisic field, Unquestionably ASCAP's new attorneys, said to be headed by Milton Diamond of New York, have covered this ground with Department officials. Thurman Arnold, assistant attorney general in charge of the AntiTrust Division, has been in this picture. His chief assistant in the ASCAP matter is Victor Waters. FOUR GENERATIONS of Katzmans make up an unique musical family. Great-grandad Phillip (right), 79, who played with many of Europe's masters, warms up a trumpet. Watching are his grandson Henry, 28, composer of the BMI hit "We Could Make Such Beautiful Music Together"; son Louis (holding baton), musical director of WINS, New York and research director of BMI; and the great-grandson Michael, 16 months. Henry plays piano in the WINS orchestra and composes popular musical numbers, using the pen name of Henry Manners. For several months Mr. Waters has been analyzing data procured by questionnaire from stations, music publishers, hotels, motion picture exhibitors and others publicly performing music, to ascertain in essence whether their businesses have been subjected "to unreasonable restraints imposed by any combination of owners of copyrighted music". The litigation now pending was instituted in the Federal District Court for the Southern District of New York. After preliminary arguments, however, the trial was revived pending a stipulation of the record. The case has been virtually dormant since, though the Department obtained a Grand Jury order several months ago requiring ASCAP to make available its files and records. Meanwhile, Broadcast Music Inc., the industry's answer to ASCAP's demands for increased tribute to perform its music when the year ends, has accelerated its pace in production all down the line. Recent efforts by individual stations or groups to obtain from ASCAP any commitment on contracts other than those proposed last March appear to have been fruitless. Broadcasters figure that ASCAP's demands would result in a virtual doubled royalty tribute to ASCAP of from approximately $4,500,000 to $9,000,000 per year. Getting Ready Broadcast stations and networks have progressed with their plans to forsake ASCAP music when current contracts expire. The networks are using more and more nonASCAP music in sustaining programs, while individual stations as of Dec. 1, in many instances, are banning ASCAP music on all programs, both commercial and sustaining, recorded and live. All this is in readiness for the anticipated transition to non-ASCAP operation effective Jan. 1. ASCAP, meanwhile, continues its bold front. It insists that ASCAP music will be on the air, one way or the other, next year. It is evident that as a last-ditch proposition, it threatens to go to Lyric Contest LYRIC-WRITING contest, believed to be the first of its kind in radio, was held by WHK, Cleveland, in connection with the annual convention of the National Scholastic Press Assn. in Cleveland Nov. 28-30. High school newspaper editors from all parts of the country chose 12 members of their association to participate in the contest. These assembled at WHK one hour in advance of a program by the WHK staff orchestra. A popular melody was played for them several times, and they were requested to write a new lyric for it. When time for the program arrived, the best lyric was chosen and sung by Lillian Sherman, WHK-WCLE vocalist. First prize was a $5 bill. the advertisers and sell them music on an exclusive basis, to be cleared at the source for the entire networks. ASCAP executives insist they could derive a greater amount of revenue through such dealings than from stations on a percentage-wise basis. While there is no official announcement, the claim is made by ASCAP that upwards of 200 stations already have signed contracts. Harold A. Lafount, president of National Independent Broadcasters and general manager of the Bulova radio stations, and Donald Flamm, president of WMCA, New York, visited ASCAP Nov. 20 and conferred with members of its radio committee. Nothing happened beyond a discussion of suggested plans, with ASCAP apparently sticking to its percentage of gross proposition, on which current contracts are based. It is understood Mr. Flamm proposed a percentage basis on commercials and a flat rate for sustaining programs, presumably having in mind passing on of the commercial program music costs to advertisers. ASCAP spokesmen apparently declined even to consider the plan. John G. Paine, general manager of ASCAP, told the Radio Executives Club of New York Nov. 27 that reports radio is about to "deal ASCAP out of the picture" are irresponsible. He bitterly criticized the networks for their failure to acknowledge the license plan submitted by ASCAP last March. Describing the plan as a formula which ASCAP is willing to modify if shown that it is impractical, Mr. Paine cited the license's concessions to the small stations by reducing their percentage payments and to the network affiliate group by granting them clearance at the source as proof that ASCAP is willing to give its customers what they want. "Maybe iyz% is too much to ask of the chains," he said, "although our calculations indicate that they can pay that amount. They've told the press, the advertisers, the agencies and the band leaders that they can't, but they've never told us." Stating that under these conditions "I don't know what the outcome will be or whether the chains will sign up or not," he said that ASCAP "feels it a duty to give everyone the opportunity to use its music on the same basis as everyone else," and that it's up to radio to accept or reject the formula or to offer to negotiate. "If radio elects not to take ASCAP mtisic on a non-competitive basis, then our obligation is cancelled and we are free to accept the other offers we have had," he declared. An Easy Way In discussing the various proposed methods by which music might be sold to radio, Mr. Paine described the present blanket license plan, enabling the broadcaster to use as much or as little ASCAP music as he chooses, as "a simple, easy, direct way of doing business". The per piece method, he said, "is so difficult and complicated as to be impractical." The per program system is possible, he stated, but "that comes down to making it possible for radio Xa charge the advertiser who uses music and not the non-music user. If that's the way it's to be, then ASCAP doesn't need radio as its salesman but can do a better job by dealing direct with the advertisers." Whatever decision the broadcasters may make, ASCAP is not worried, Mr. Paine asserted, as long as it has the music of Cole Porter, SigmUnd Romberg, Irving Berlin, George Gershwin, Sousa, Rachmaninoff, and the other music "the public wants." The best stars aren't worth much without good inaterial, he stated, and ASCAP has that material. Progressing with its task of building up a radio-controlled supply of equally good material, BMI is pushing its negotiations with Edw. B. Marks Music Corp., owner of one of the most important American music catalogs. Deal, which is expected to be settled Page 12 • December I, 1940 BROADCASTING • Broadcast Advertising