Decision: Tape It to the Max

By Richard Stengel

The Supreme Court says a VCR switch in time is not a crime

Relax. Just press the play button, then settle back in the Barcalounger to watch the episode of Cheers that you missed last Thursday because of the lasagna dinner at your mother-in-law's. No more guilt or anxiety. No video SWAT team is going to swoop down on your living room, disconnect your VCR, and confiscate the collection of I Love Lucy videotapes that you've been recording for a rainy day. It's all legal now.

It is legal because last week the Supreme Court ruled, 5 to 4, that home videotaping of television programs for private use is not a violation of copyright law. The anxiously awaited decision grew out of a suit brought by the Disney and Universal studios in 1976 against the Sony Corp., makers of Betamax videocassette recorders (VCRS), for enabling home viewers to record movies and TV shows without paying a royalty. In 1981 a federal appeals court in California decided in favor of the studios. Since then the billion-dollar VCR industry, as well as millions of consumers, has been in a state of legal limbo. Last year the Supreme Court took the unusual step of holding the case over until this year and went so far as to request rearguments.

In its decision, the court held that "time-shifting," the recording of a program for later viewing at a more convenient time, constituted "fair use" of copyrighted material. Wrote Justice John Paul Stevens for the majority: "One may search the Copyright Act in vain for any sign that the elected representatives of the millions of people who watch television every day have made it unlawful to copy a program for later viewing at home." The court found, moreover, that Disney and Universal--and, by extension, the entertainment industry--had failed to prove that the practice caused them financial injury or damaged the value of their copyrighted work. Thirteen years after the introduction of the VCR, a switch in time is no longer a crime.

No sooner had the court spoken than the predictable outcry was raised by Jack Valenti, president of the Motion Picture Association of America, who has spearheaded the entertainment industry's million-dollar lobbying campaign against unrestricted videotaping. Valenti questioned whether the "copyright is real or whether it is mush," and insisted that "the future of creative entertainment of the American family is what's at stake here." Producer Irwin Winkler (Rocky III, The Right Stuff) was being only slightly sarcastic when he said: "Creative people have to eat. With this decision they will make less income. They eat a little less. Maybe they create a little less."

To Hollywood film and television producers, home taping means getting something for nothing: the consumers are getting something while they, the producers, are getting nothing. The producers dispute the high court's contention that people are only "time-shifting." Consumers, they assert, are building up video libraries of copyrighted material and hence reducing the resale potential of the material to other markets, such as broadcast reruns, cable and prerecorded cassettes. Hollywood still wants what it has wanted all along: some kind of royalty payment from the manufacturers of tapes and machines, perhaps drawn from a surcharge on the sale of those items.

Networks and advertisers, too, see home taping as something akin to a biblical curse. Argues AFL-CIO Executive Jack Golodner, who represents TV and film performers and technicians: "Take The Wizard of Oz, which is shown every year on television. If 40 to 50 million people have taped it, what sponsor would want to buy time on another broadcast?" But it is the fast-forward button that has advertisers most agitated, for with it, says Valenti, viewers can "assassinate" commercials while either taping programs or playing them back. Says Richard Kostyra, senior vice president at J. Walter Thompson, the mammoth advertising firm: "What took us ten spots to reach an audience may now take 15."

The entertainment community is counting on help from Congress, which is precisely where Justice Stevens suggested it look. "It may well be," wrote Stevens, "that Congress will take a fresh look at this new technology, just as it so often has examined other innovations in the past."

Representative Don Edwards of California, co-sponsor of a bill that would authorize a copyright royalty system, affirms that "the court didn't intend this decision to be the final answer." Yet Edwards admits that putting a royalty tax on one of the nation's favorite consumer toys in an election year is no politician's idea of how to keep his job.

Some legal scholars agree with Hollywood that technology is on fast forward while Congress and the court are in slow motion. Arthur R. Miller, a Harvard Law School professor and authority on copyright law, notes that the most recent congressional overhaul of copyright laws in 1976 "was obsolete the day it went into effect, at least in terms of technology." In 1976 there were some 50,000 VCRS in the U.S. Since then, sales have increased steadily (by 100% last year, and an expected 50% this year). By the end of the decade there will be an estimated 45 million VCRs, or one in nearly half of all TV homes.

Hollywood will doubtless go on lobbying and arguing. But some observers question whether in the long run there will be any losers. Once upon a time Hollywood practically wanted Congress to outlaw a newfangled contraption called television.

Watching TV is now the most popular leisure-time activity in America. The VCR only expands the amount of time devoted to that peculiarly nonactive activity, and thus expands a market in which many producers can flourish as program suppliers.

Notes Charles Ferris, a former Federal Communications Commission chairman who is counsel for an electronics-industry lobbying group called the Home Recording Rights Coalition: "The VCR watcher was either unable to watch the show the first time or is watching for the second time. Either way that means an incremental increase in the audience." Such an increase benefits everyone, according to Ferris; a rising tide lifts all boats, even Hollywood yachts. --By Richard Stengel.

Reported by Anne Constable/Washington, with other bureaus

With reporting by Anne Constable