Such scandals had a habit of “coming with uncanny timing in relationship to proposed legislation,” the sociologists R. Serge Denisoff and Charles McCaghy observed in 1978. Just as Congress was considering whether to extend or enhance the 1971 Sound Recording Act, allegations of payola and other unethical practices once again hit the music industry.118 The music business could not shake off its seedy public image. As the Chicago Tribune’s Bill Anderson observed in 1972, “The flamboyant lifestyles of singing stars generated little public sympathy from buyers and the small businessmen who began stocking bootleg tapes in gas stations, laundromats, convenience food stores, and the like.”119 Indeed, poor publicity may have contributed to the record industry’s inability to achieve its legislative goals for such a long time.120
However, the record industry had little trouble influencing lawmakers in the 1970s. The 1971 bill was a stopgap measure that provided copyright protection for new sound recordings only until 1975, on the assumption that a comprehensive reform of copyright law would be passed by then. The RIAA lobbied Congress to extend the law and to beef up penalties, and the House Judiciary Committee approved an increase in fines in September 1974. The Sound Recording Act of 1971 imposed a $100 fine on a first-time offender and $1,000 for repeated convictions. In contrast, the new bill increased fines to $25,000 and $50,000 respectively—a 250 times increase for the first offense. The prison term, previously one year, became two, and the law passed in December 1974.121 “I feel we now have the tools to go after them,” Jules Yarnell said. “Whether the government will use them depends on the individual U.S. attorney in each area.”122 Then again, the industry simultaneously pushed for New York and other states to make their own statutes more severe.
The campaign to stop piracy reached its most spectacular dimensions in 1978. Early that year two fresh-faced young men opened a record store in Westbury, Long Island, with hip disco interiors and the name Modular Sounds. People in the neighborhood could not believe the bargains they found at Modular. Nobody expected the boys to stay in business long, but they snapped up the deals while they lasted. You could buy a 99-cent tape for 79 cents. To the landlord, Bobbie and Richie were just “nice kids” who did not know how to run a store, although they always paid their rent on time. The two daydreamed most of the day, left early, and had little traffic from customers.123 Transactions must have occurred there, at some time of day or night, because the FBI had identified 400 suspects when it hung up the “For Rent” sign at Modular months later.124 Bobbie and Richie had been undercover agents all along. They made contact with over fifty underground merchants, who brought them pirate recordings to stock the store.125
The ruse allowed the FBI to get an inside look at the networks that distributed bootlegs across the country. On the December morning Modular closed in 1978, the FBI simultaneously raided four plants in Suffolk County, New York; one in Albany; one in Mount Vernon; two in Georgia; three in Connecticut; four in New Jersey; and eight in North Carolina. The investigation had gone on for two years and had uncovered significant ties between the Tar Heel state and Long Island. Facilities on the Island manufactured both tapes and packaging, and the labels—a lighter and more discreet cargo than recordings—traveled to Charlotte, where workers pasted them onto locally produced records and tapes.
In fact, investigators identified a Charlotte businessman, Jerrold H. Pettus, as the kingpin of both the North Carolina and New York operations.126 His company, General Music, also sold tapes to retail stores in the Midwest.127 Pettus denied the FBI’s claims of big takings. “The figures are grossly exaggerated,” he said. “I don’t think we have that much inventory in stock.” He and his brother-in-law, Ralph “Buddy” Phillips, claimed to have legitimate invoices for all their merchandise. However, music industry men and store owners around Charlotte expressed little surprise at Pettus’s legal troubles. In 1971 he settled out-of-court with four major record companies over reproducing recordings without permission, and in 1974 the FBI raided his company Sound Duplicating Systems.128
Back in New York, the paper trail led to some interesting dead ends. Newsday dug up tax records for two of the illicit manufacturers on Long Island, Ramart Printing and BCF Productions. The companies had formed in 1975 and 1976, respectively, and the documents only mentioned the names of the lawyers who incorporated them. “Each said he could not remember the names of the principals in the respective firms,” journalist Steve Wick reported. The third pirate site, Marta Printing, did not have any records on file. Wick then turned to the Suffolk landlords who owned the plants and warehouses and came up with the name of one suspected pirate: Chris Colon. John Perrotto began renting a warehouse at 9 Drayton Avenue in Bay Shore to Colon in 1975. As far as he knew, the tenant ran a printing press that manufactured cake boxes and labels for eight-track tapes. Curiously, Colon closed his press, packed up his family, and moved to Puerto Rico three weeks before the raids. When FBI agents descended on the warehouse, they found a blank space. “They came down like a ton of bricks,” Perrotto said. “Afterwards, I took two Rolaids and a Tums.” He must have reconsidered Colon’s recent departure, so sudden and practically timed as it was. Was he a criminal? Did he learn of the sting operation somehow and abandon his coconspirators? Perrotto remembered the mystery entrepreneur as “hardworking and loyal.”129 On the other side of the law, the FBI’s landlord at Modular Sounds regretted the loss of such good clients. “I wish I could get some more,” Mario Eliseo said.130
Copyright Reborn: The 1976 Law
These raiders were armed with the Copyright Act of 1976, which went well beyond the sound-related reforms of 1971 and 1974 to transform the nature of all aspects of copyright. Congress acted on the question of sound recordings in the early 1970s only because the music industry insisted that the piracy crisis was too pressing for lawmakers to wait until they had sorted out every single copyright issue, from the regulation of cable television and jukeboxes to the pricing of the compulsory license for music. Everyone agreed that manifold disputes about new technology made an update of the Copyright Act of 1909 urgent, yet this complexity also made such an overhaul all the more difficult to enact—and easy to postpone.
It took almost seventy years, but the petitioners of 1909 finally got much of what they had originally sought.131 In the Progressive Era lawmakers declined to extend copyright to the life of the author plus fifty years, as numerous artists, publishers and writers had requested; they retained instead the old model of a twenty-eight year period, which could be renewed once for another twenty-eight years. The 1976 act adopted the life-plus-fifty-years standard, which many other nations by then were using. Only the Philippines had a copyright term as short as the United States, and its law had been fashioned after America’s. For works for hire—that is, most corporate products—the new copyright would last seventy-five years from publication or 100 years from the time of creation, whichever ended first. Supporters of this reform supposed that the old model of two twenty-eight year terms had been based on the lifespan of earlier Americans. Since people were living longer in the late twentieth century, some authors survived to see their works go into the public domain.132
Lawmakers also believed that changes in technology warranted greater copyright protection. “The tremendous growth in communications media has substantially lengthened the commercial life of a great many works,” a Senate committee concluded. “A short term is particularly discriminatory against serious works of music, literature, and art, whose value may not be recognized until after many years.” The senators did not consider the possibility that the public might benefit from “serious works” being freely and cheaply reproduced. Lawmakers also argued that the new system would be less time-consuming to administer, because “the death of the author is a definite, determinable event, and it would be the only data that a potential user would have to worry about”—as opposed to the date when the copyright was registered or renewed.133 Throughout the debates over the 1976 act, legislators favored reforms that conf
erred copyright automatically, making protection less contingent on compliance with legal requirements. The public domain, not copyright, had become the necessary evil.
Indeed, Congress fundamentally changed the nature of copyright by no longer requiring creators to register their works with the Copyright Office to receive protection, as had been required since 1790. Under the new law, copyright existed as soon as the ideas were expressed in tangible form, whether printed, visual, or electronic. In other words, everything is copyrighted. In doing so, Congress aimed to replace the so-called “dual system” that protected unpublished works through common law copyright, which was enforceable only through a civil suit. Under the old system, authors received the full force of federal protection only for those works that they published and registered with the government. The Senate committee considered this arrangement “anachronistic, uncertain, impractical, and highly complicated.”134
Publication had always been the main determinant of eligibility under federal copyright law, but by the late 1970s, it was harder to say exactly when a creative expression was published. If a song was performed on the radio or television, did that constitute publication? Should a writer have to register a poem with the Copyright Office if it were to appear in a zine with a print run of 50 copies? Instant copyright protection, backed by federal law, would alleviate this confusion and facilitate international trade, since no other nation had such a complicated system of protection. In the committee’s view, the uncertainty of legal status impaired the export of creative works abroad and put the United States at a disadvantage.135
This simple but fundamental provision best exemplifies the shift toward expanding rather than restraining property rights. No longer would copyright protection depend on the author’s registration of the work with the Copyright Office. This innovation suggests that copyright is an inherent quality of an expression, something that the author and his heirs can exploit for the rest of his life and well beyond, just by the act of creation. The old system, in place since 1790, had treated the author’s monopoly as a temporary legal arrangement with the state, dependent on the filing of a claim. Otherwise, the work defaulted to the public domain, and anyone else could make use of it. (“Your rights are purely statutory,” as a Congressman reminded music publishers seventy years earlier.)136 After 1976, by contrast, every recorded utterance became a new piece of property, and virtually none of an author’s contemporaries would likely live to see the day that copyright expires on his work.
The new policy also solved the problem of registering and regulating every single copyrighted work, the former task of the Copyright Office, the rare government agency that paid for itself (through the collection of registration fees). One difficulty in devising a right for sound recordings had been figuring out how to manage a separate right for each rendition of a song, no matter how minutely different one was from the other. If one had higher treble in the mix, and another was sung in a lower octave, but they were otherwise identical, would one be an infringement of the other? Could every different take recorded while the tape rolled in a studio be registered for a separate copyright? As the age of tape recorders, personal computers, and desktop publishing dawned, the challenge of cataloguing every bit of intellectual property would dizzy even the most fastidious librarian. The automatic conferral of copyright in the 1976 act eliminated the issue in one fell swoop.
These broad changes affected all rights owners, but the lion’s share of debate over the bill dealt with balancing the demands of those who made and used copyrighted material in various media. In the field of music, for example, broadcasters, composers, performers, and record companies traditionally wrestled over who would get the biggest share of the entertainment dollar. Broadcasters wanted to pay less for the music they aired. Composers wanted to charge more for labels to record their songs. Labels wanted jukebox companies to pay more for the use of their music. Performers had long sought recognition and remuneration for their creative contribution to a sound recording, a question that had vexed judges and lawmakers for years.137 The 1971 Sound Recording Act created a copyright for records, but the right belonged to the record company. A recording was typically a work for hire; the company that paid for and managed the contributions of singers, musicians, and producers owned the final product, just as a publisher who hired scholars to write entries for an encyclopedia would control rights to their work.
The unions had backed the record industry’s effort to get a copyright and fight piracy in 1971, but they now sought a bigger piece of the pie. “It must be obvious that using a person’s labors and talents to enrich oneself without compensating that person is less than ethical,” said Sanford Wolff, of the American Federation of Television and Radio Artists. The union pushed for broadcasters to pay a royalty to musicians and singers who perform on sound recordings. Since radio stations turned from airing live music to records in 1950s, Wolff said, more and more musicians were employed as session musicians in recording studios. The RIAA backed musicians in their quest for greater compensation. Speaking on behalf of the record industry, Stanley Gortikov noted that “the sound recording is the only copyrighted creative work for which a royalty will not be paid when it is performed by others.” The new bill required cable companies to pay royalties to broadcasters for use of their programs, and composers were to receive a new royalty for the use of their songs in jukeboxes. The musicians who actually gave sound and shape to these recordings, though, were the only ones not getting paid for the continued use of their work. For Wolff and his fellow musicians, the question in 1976 was how to deal with the problem leftover from 1971: if we can agree that a recording is a creative work, why is the only party that seems to make no direct creative contribution (the record company) the one getting the copyright?138
The few critics who opposed expansion of copyright at the hearings found an unreceptive audience. Representative Robert Kastenmeier (D-WI), one of the bill’s champions, lost patience with the “duplicators,” who frequently interrupted him and other Congressmen as they urged the legislators to rescind the copyright for sound recordings. The Independent Record and Tape Association (IRTA), a group of small retailers and tape copiers based in Vermont, revived the idea of a compulsory license for recordings, which would have allowed competitors to make and sell their own copies of another company’s records for a standard fee, much like the system for recording different versions of a musical composition. Their pamphlet, “The Great American Rip-Off,” might have sounded too shrill a note, though; the cover showed a pirate and his sidekick opening a treasure chest, with the words “The United States House of Representatives Copyright Revision Bill” inside it, just below “Rip Off.”139 Were the pirates implying that the Congressmen were ripping people off? Or were they saying that the mainstream record companies were the buccaneers, and the bill was the treasure they sought? “We are amazed that the House of Representatives is considering a bill that will enable the multi-billion dollar music conglomerates to reap unconscionable profits,” the IRTA declared, “all at the expense of the consumer and the small recording companies.” David Heilman railed against “the mechanical trust” which sought to control “the majority of major copyrights in the United States,” vertically integrate the writing, recording and sale of music, keep out competitors, and drive up prices.140 His was the only mention of a “mechanical trust” during the hearings, and, unlike earlier in the century, the word “monopoly” rarely came up.
In an era of inflation, critics also cited the rising price of music as an argument against exclusive copyright for sound recordings. “When Congress granted relief with Public Law 92–140, the suggested retail price of records was $3.98,” Heilman said. “Now, it is $6.98. You were told that if the pirates or re-recorders were put out of business, prices would drop. Have you or your family purchased a $3.98 record recently?”141 This observation seemed to vindicate the fears of Representative Abner Mikva, who predicted that giving copyright protection to recordings would lead to high
er prices.142 However, the industry argued that pirates were siphoning off its profits, forcing companies to charge more to recoup their investments. The industry blamed piracy for higher prices, and pirates blamed copyright, but the price of most goods rose during this period. It is little surprise, then, that consumers turned to a cheaper product in a time of high prices and stagnant employment.143
In the end, Congress preserved the property right it gave to record companies in 1971, and the performers’ royalty failed because of opposition from broadcasters. The Copyright Act required the negotiation of many difficult compromises, and lawmakers did not consider the performers’ right worth ruining the whole project.144 As Barbara Ringer commented, “It is a source of wonder that somehow all of this succeeded in the end.”145 Perhaps the bill survived the long process of negotiation because it offered certain benefits that all copyright holders were eager to see, such as the longer term of protection. The resulting law capped a long process of reform that began in 1955, resulting in an anti-counterfeiting law, a copyright for sound recordings, a longer period of protection, and tougher penalties.
Source of wonder or not, the final bill passed easily in Congress. Reforms that artists, composers, musicians, publishers, record labels, and so many others had pursued for seven decades won resounding approval, facing only minor objections. As with the Copyright Act of 1909 and the Sound Recording Act of 1971, the legislation did not divide lawmakers along partisan lines. The bill passed the Senate in February 1976 with ninety-seven votes in favor and none against.146 Senator Abourezk (D-SD) proposed an amendment limiting the length of copyright to the author’s life or fifty-six years, whichever was longer, but the measure was overwhelmingly rejected by a 14 to 78 vote moments before the bill as a whole was passed.147 When the bill was approved by the House Judiciary Committee, only one member—Representative Joshua Eilberg (D-PA)—opposed it, on the grounds that a new requirement for cable television providers to pay copyright fees would disadvantage rural communities, where cable had compensated for inadequate access to television broadcast signals.148
Democracy of Sound: Music Piracy and the Remaking of American Copyright in the Twentieth Century Page 21