The music industry is mounting an aggressive, high-volume lobbying campaign, deploying major recording artists such as Smokey Robinson and Beverly Sills, in an attempt to impose a "royalty" fee on the sale of tape recorders and blank audio cassettes.
The industry's drive, fueled by the dramatic growth in the home taping of record albums, is strongly opposed by tape recorder manufacturers and retail electronic store operators, who charge the measure amounts to a "taping tax" that will jack up the price of tape equipment for all consumers.
The industry's bill, which will be the subject of hearings before a Senate Judiciary subcommittee today, calls for a royalty charge of between 5 and 25 percent on home tape recorders at the wholesale level and a penny-a-minute charge on blank audio cassettes. Most of the proceeds -- about $200 million a year -- would flow through a federal agency to performers and to record companies, such as Warner Communications Inc., CBS Inc., RCA Corp. and MCA.
"This is an attempt to put a tax on all consumers and then earmark it as a subsidy for the recording industry," charged Charles D. Ferris, the former Federal Communications Commission chairman who is leading the lobbying fight against the measure.
"It's, to me, ludicrous," he said. "These are the best of times for the record industry . . . and now they're coming in and preaching poverty and saying they need a subsidy."
Opponents say the royalty charges will be passed on to consumers. They note that the price of a typical $300 home tape recorder will shoot up by $15 under the bill, while a blank 90-minute cassette selling for $2.79 at Radio Shack yesterday would cost an extra 90 cents.
But industry officials contend that this is the only way to compensate musical performers, songwriters and composers, record companies and other copyright holders for record sales that are lost when consumers tape albums or radio music in their homes. The industry calls home-taping a "massive and growing" problem and estimates it lost about 325 million record sales and about $1.5 billion in total revenue last year due to home-taping.
"This hits us right in the profit gut," said Stanley Gortikov, president of the New York-based Record Industry Association of America. "There are as many albums being taped at home today as are being sold . . . . So why should the music industry be the only industry whose products are appropriated without compensation? Why should music recordings be the free lunch for America?"
Acting through a group called "Coalition to Save America's Music," which is headed by opera star Sills, record companies and their allies have engaged in a musical rendition of celebrity lobbying. A chorus of pop and country music stars, including Robinson, John Denver, Quincy Jones and country singer Louise Mandrell, have joined the campaign, paying visits to Capitol Hill in recent weeks.
The industry, which will present its case at a Senate Judiciary Subcommittee hearing today, has also lined up a host of congressional sponsors, incuding senators from the industry's capitals in California, New York and Tennessee. Sen. Charles McC. Mathias (R-Md.), the chairman of the copyrights subcommittee, is the chief sponsor of the legislation in the Senate, where it is believed to have stronger chances than in the House.
But the recording equipment manufacturers, most of whom are Japanese-based companies, have joined U.S. retailers to match the record companies in lobbying firepower. An audio industry-financed group called the Audio Recording Rights Coalition and a sister organization have spent $270,000 in fees and expenses this year for such lobbyists as Ferris, consumer activist Carol Tucker Foreman, former senator Marlow Cook and the law firm of Patton, Boggs & Blow, according to lobbying disclosure reports. Convinced that are onto a marketable "consumer issue" that will embarrass the bill's congressional sponsors, the opponents are seeking to generate grass-roots pressure through newspaper advertisements in the home states of subcommittee members.
"Senators don't want to impose a tax on their constituents, but the record industry has told them that this can be whizzed through quickly and they won't get any publicity," said David Rubenstein, a lawyer for the Japanese manufacturers.
The fight over taping records is the latest in a series of congressional battles that stem from the increasingly popularity of new home entertainment technologies. The Hollywood movie industry has tried for years to recapture revenue they say is lost because of the use of Betamaxes and other home video recording equipment -- an effort that was temporarily shelved last year after the Supreme Court upheld the legality of home video taping.
In the past, the record companies have attempted to "piggyback" on the movie industry's campaign by pushing parallel legislation. But with Hollywood taking a breather because of its Supreme Court defeat, the record companies have this year gone solo, arguing that elemental justice is on their side.
According to the industry, everybody from rock superstars to struggling songwriters are having their works "stolen" by home tapers, some of whom build vast tape libraries, without ever paying for record albums. Moreover, they argue, the Japanese manufacturers of audio equipment openly cater to the tape "pirates" by advertising "portable cassette factories" with double and triple cassette decks designed for music taping.
The industry proposes to recapture lost revenue through the royalty fees, the proceeds of which would be distributed by the U.S. Copyright Royalty Tribunal in proportion to the money the various copyright holders -- the record companies, the artists, composers and songwriters -- would receive from normal commercial sales of their albums.
But critics say this would be a bureaucratic nightmare to administer and would only enrich the already profitable record companies and rock superstars who generally receive the bulk of the revenue from the sale of record albums.
"There is an image problem," conceded Francis O'Brien, who is handling public relations for the music industry. "When people think of the music industry, the first name that comes to their minds is Michael Jackson. But the record industry is also the people in the pressing plant in Terre Haute, Ind.," whose jobs could be lost because of a decline in record sales.