NAB reports (Jan-Dec 1934)

proval of the Society ; that at no time had the Society any associa¬ tion, or connection, or relationship with the Association, nor had it anything to do, either directly or indirectly, with the formation of such Association, or with any of its business, affairs, operations or policies; that it never, directly or indirectly, transacted any business with such Association, or had any communications with it, nor was the Society directly or indirectly concerned with or interested in the business, management, operations, affairs or policies of such Association, nor did it participate in any way, directly or indirectly, in its management, or in any of its business, affairs, opera¬ tions, activities or policies, nor in the selection, designation, election or naming of any member of its board of directors, officers, agents and servants ; that the Society did not, directly or indirectly, require that the Association render any services to it or to its licensees, nor did the Association directly or indirectly render any such services; that the designation, selection, election or naming of any officer, director, agent or servant of the Association was not dependent upon his being a member, officer, director, agent or servant of the Society; that persons not members, officers, directors, agents or servants of the Society have been, and are, members, officers, direc¬ tors, agents and servants of the Association ; and that there is and was nothing in common or any community of interest between the Society and such Association, in any particular, respect or manner whatsoever; that if any member of the Society happens to be a member of the Association, it is purely and solely because such person happens to be an active music publisher, and not because of, on account of or by reason of his being a member of the Society; that the Association has neither directly or indirectly any connec¬ tion or association with the Society nor has it anything to do with the Society nor has it anything to do with the selection, election, designation or naming of any of its officers, directors, agents, or servants; that it never did, and does not now, direct or participate in the policies, activities, business, operations or affairs of the Society, nor has it anything to do with the administration of its affairs, operations and activities of the Society; that it has not participated, concerned itself or interested itself therein, directly or indirectly; that these two organizations have been, and are, separate and distinct entities, having nothing whatsoever to do with each other in any manner or by any means or mode whatsoever and are absolutely foreign to each other in every respect. XI. Deny each and every allegation contained in paragraphs “16” “17” and “18,” and further answering said paragraphs “16,” “17” and “18,” defendants aver that the Service Corporation has ceased and discontinued all business, activities and operations and its directors voted to dissolve such corporation before the coinmencement of this suit; that such corporation was organized in or about June, 1932, upward of eighteen years after the organiza¬ tion of the defendant Society ; that such Service Corporation was organized without the knowledge, consent, acquiescence, approval or participation of the defendant Society ; that at no time did the said corporation render any service, directly or indirectly, to the Society, or to any of its licensees nor did it require any service to it or to anv of its licensees; nor did the Society have anything to do with the cessation and discontinuance of the business, activi¬ ties and operations of such Service Corporation; that at no time had the Society any connection, association or relationship with the Service Corporation or had it anything to do, either directly or indirectly, with the formation of such Service Corporation or with any of its business, activities, operations or affairs; that it never, directlv or indirectly, owned any part of its capital stock, nor directly or indirectly, transacted any business with it, nor had any communication with it, nor was it directly or indirectly con¬ cerned with it or interested in its ownership, management, opera¬ tions or policies; that the Society did not participate in any way, directly or indirectly, in its management or in any of its affairs, business, operations or activities, nor in the selection of its board of directors, officers, agents or servants; that if any member of the Society was at any time in any wise connected with the Service Corporation, then he was so associated and connected solely in his capacity as an active music publisher and not in connection with or on account of or because of his membership or association with the Society; and that his association and connection with such Service Corporation was without the prior consent or ap¬ proval of the Society and was not dependent upon or connected with his membership in the Society ; that he did not first ask the Society for its consent, approval or acquiescence, nor did the Society, by any act, directly or indirectly, consent or approve of his association or connection with such Service Corporation; and that the association or connection of any member of the Society with the Service Corporation, prior to its dissolution, had no rela¬ tion whatsoever to such member being a member, officer or direc¬ tor of the Society; that there was no connection or community • Page of interest whatsoever between the Society and such Service Cor¬ poration in any particular; that the defendant Society never selected, designated or named, or had anything to do, directly or indirectly, with the selection, designation or naming of any of the officers, directors, agents, or servants of the Service Corporation. XII. Deny each and every allegation contained in paragraphs “19” and “20” and “22.” XIII. Deny each and every allegation contained in paragraph “21,” and further answering said paragraph “21,” the defendants aver there is absolutely no competition with respect to the perform¬ ing rights of musical works for the reason that each number is sui generis. It stands in a class by itself, upon its own merit, quality, and pleasing attractiveness, and appeal to the public. A person desiring to hear “Mother Machree” is not satisfied with and will not accept a rendition of “A Kiss in the Dark.” A famous opera singer, the predominant feature of whose repertoire is “Madame Butterfly” will, under no circumstances, sing “Carioca.” Instances can be multiplied ad infinitum. The commercial value of the performing rights in a song lies in its use in combination with and as part of a mixed composite program. Never in the history of the Society was there a request made for permission to give a public performance of a single number or a group of numbers, or for the numbers in the catalogue of a given publisher until recently, when such requests were made at the instigation of the National Association of Broadcasters for the sole purpose of harassing the Society and laying the foundation for a lawsuit. The usual request is for the privilege of selecting from the Society’s repertoire a suitable program to be changed daily or weekly as the necessities of the licensee’s business may require. There is no way of placing a value upon the performing rights of a single number or group of numbers, or even of the numbers of an entire catalogue of a music publisher. Other than the statutory guide of determining the value of such rights, there is no other method of fixing or ascertaining the value of such rights with the possible exception of production numbers; that is to say, numbers especially written for or interpolated in musical plays, reviews, and comic operas for legitimate theatrical performances. In the case where an entire musical play is written by a composer and author in collaboration, they receive a royalty based upon a percentage of the gross weekly receipts, customarily aggregating to 6 per cent of such gross receipts. In the case of a single number or group of numbers, the royalty varies from one-half to 1 per cent of the gross receipts. Sometimes the royalty is fixed at sums ranging from $50 a week upward, depending upon whether a single number is interpolated or a group of numbers. Prior to the formation of the Society there was no market among users for performing rights of single numbers or for groups of num¬ bers or for even the numbers of entire catalogues of writers and publishers. The establishments with which the Society deals helped themselves to the same without trading or bartering for such rights. They never paid for any such rights, never offered or suggested paying for such rights, and there never was any price fixed for such rights, and there was no means of determining the value of such rights. The only dealings that users of music and broadcasters desire to engage in is upon the basis that they pay no price at all for the rights to use copyrighted music. They claim a perfect quid pro quo in the form of the publicity that they give to a number by publicly having it played or sung although it is well known that the constant broadcasting of a particular composition destroys its popularity and disables the writer from securing royalties through other means of production and exploitation. XIV. Deny each and every allegation contained in paragraph “23,” and further answering said paragraph “23,” the defendants aver that the owners of radio broadcasting stations have not em¬ ployed writers to write music, but have simply waited for the music of authors and composers to be popularized by publication or presentation on the stage and have thereafter used the music so published or presented and popularized by others; that instead of the radio popularizing music, the constant plugging of the musi¬ cal compositions by radio broadcasting has shortened the life of musical numbers and has resulted in a tremendous decrease in the royalties received from the publication and sale of sheet music and the primary source of revenue from copyrighted musical num¬ bers to which the composer, authors and publisher may look as the revenue derived from the public performance for profit of their musical numbers; that under the Copyright Law, the copy¬ right proprietor has an absolute right to select his vehicle for the use of his copyrighted works and if he should decide to refuse to give his music to be used by the radio broadcasters, he is privileged and within his right in so doing; that the activities of the broad¬ casters with respect to music have been and are limited solely to an attempt to take the music without paying for it. 582 >