Imagine a machine so remarkable that it could make a perfect, working copy of any item in your home. If you wanted a second TV, there'd be no need to buy it -- this machine would produce it for you. If you needed another car, this machine would churn one out for free.
It wouldn't take long for television and car manufacturers to start feeling very insecure about their economic futures. And you'd begin to see their point, perhaps, if your boss used the machine to create a few clones of you, undercutting your value as an employe.
For the cloning of music, this technology already exists. Digital audio tape (DAT) is the tape version of a compact disc (CD). With a DAT machine, which the Japanese plan to import into the United States later this year, it will be possible to make perfect digital copies of CDs. Every copy will be as good as the original, and from each copy limitless numbers of additional copies can be cloned without any loss in quality. The temptation to tape your music instead of buy it will become almost impossible to resist. It is cheaper to tape than to buy. And why buy when the cheaper taped version is as good as the original?
In fact, the taping of CDs is about the only thing for which DAT machines can be used. There is no existing technology for the high-speed duplication of prerecorded DAT cassettes, so record companies cannot offer you their music on DAT. These machines, therefore, can only reduce the sales of prerecorded music.
So the single-minded determination of the American music industry to resist the devastating effects of DAT should not come as any surprise. The goal of the Recording Industry Association of America is simple: to preserve the ability of creators of American music, and all those who rely on music for their livelihoods -- performers, songwriters, factory workers and others -- to be paid for their efforts. We have been laboring to protect the value of their work in the face of a technology that threatens that fundamental right.
We have no hidden motives -- we are not working to stop a technological advance. Nor are we crusading to deprive our customers of a new technology that enhances the enjoyment of music. For those of us in the music industry, it is a simple issue of fairness, and economic survival.
We are not crying wolf. DAT is a new twist on the home taping problem that has been plaguing the music industry for years. A study by the eminent economist Alan Greenspan documented that home taping costs the American music industry $1.5 billion annually -- about one third of the industry's total revenues. And the problem is only getting worse. Last year, for example, unit sales of prerecorded music declined by 5 percent, while sales of blank tape increased by 21 percent. Thus the foreign manufacturers of blank tape and recording equipment have prospered -- at the direct expense of the American music industry.
It is the business of American record companies and music publishers to seek out, develop and market the best music they can find. The revenues they earn from the sale of today's recordings are used to fund that effort. With home taping draining off an increasing amount of those revenues, there is less money available to invest in new artists, new songwriters, new music. Already the number of new releases put out by the industry has declined by 43 percent since 1978.
Record companies also subsidize less popular forms of music, such as opera, classical and jazz, from the sales of "big hit" records. It is precisely those "big hits" that are taped. As Beverly Sills has testified before Congress, some of her own opera recordings were made possible by the revenues generated by the success of the Beatles -- as Sills and the Beatles recorded for the same company.
In other words, home taping means fewer opportunities for tomorrow's recording artists. It is little wonder, then, that the American music community views the DAT recorder -- the ultimate home taping machine -- as such a grave threat. If these machines are permitted to enter the country without some measure of protection against unauthorized taping, the result could be disaster for American music -- and for all those who rely on it for jobs and entertainment.
DAT technology presents an obvious unfairness that must be remedied. Yet the Home Recording Rights Coalition (HRRC) has consistently opposed every effort to devise a reasonable solution to the problem. For the last several years, it has sought to block a royalty on blank tape and recording equipment that would have been used to compensate music creators and producers, and to encourage new talent.
Now the HRRC opposes an alternative solution that we developed at Congress' request -- the "copy-code scanner" system, which would permit copyright owners to control unauthorized duplication of their music. Briefly, it works like this: DAT machines would be required to contain electronic circuitry (the "scanner") that is capable of detecting an inaudible signal -- a tiny sliver of sound removed from the recording at a very high frequency. When the scanner detects this signal, it instructs the recording mechanism to stop functioning intermittently.
The signal would be placed only in copyrighted music at some future date. It would not interfere with digital taping of any noncopyrighted material, such as music lessons or the sound of your own voice. Nor would it affect the recording of any material presently available on the market, since nothing in record stores today contains the inaudible signal. And the signal would have no effect on analog recorders.
The copy-code system is a marketplace solution to the home taping problem. It is targeted at those who copy copyrighted CDs, and no one else. It requires virtually no administration.
Unable to find substantive flaws with the copy-code concept, the HRRC has sought to attack the technology itself, falsely claiming that the encoding process would degrade the music on prerecorded CDs. The music industry, of course, would have nothing to gain by selling "damaged" music. And even professional engineers -- including representatives of HRRC -- who have heard the system have conceded that they cannot detect any differences between encoded and unencoded versions of the same music.
To put this controversy to rest once and for all, we have agreed to submit the copy-code scanner system to the National Bureau of Standards (NBS) for an objective evaluation. We hope that the HRRC will cooperate, permitting this assessment to go forward as quickly as possible so that we may turn to the task of resolving the important policy issues at stake here.
We have fought long and hard over this principle of basic fairness, that people who offer a product to the public are entitled to be paid for their efforts. In the heat of the battle, the Japanese manufacturers of DATs and other recording equipment seem to have forgotten one very essential point: Between the manufacturers of such "hardware" products and the American music community, there is a symbiotic relationship. Only when our products operate together do they give music lovers what they want to hear.
We in the American music community have never lost sight of that. We have tried many times to negotiate with the Japanese, but they have refused to discuss seriously our concerns and have declined to view a demonstration of the copy-code scanner system. A number of congressmen, too, have asked the Japanese to refrain from importing DAT machines until the NBS can study the copy-code scanner system and Congress has had a chance to consider the issue fully. Yet at least one manufacturer, Marantz, has already announced that it will begin importing DAT machines this fall.
American music is one of our most robust industries, and one of our most sought after exports. It is time we made our message to the Japanese unmistakably clear: American music and American intellectual property rights must not become victims of their unending search for new markets.