Phoenix, Ariz.–—In this very industrious town, in a brand-new industrial park complex, the National Manufacturing Company makes tapes—–eight-tracks and cassettes–—with 100 employees on the payroll working two eight-hour shifts and with armed guards at the doors backed by a 24-hour red alert monitored by a private security police system.
A pretty sizable operation. In fact, when federal marshals finally made their way past one of the guards—–after serving a writ of seizure signed by US District Judge William P. Copple–—they discovered a full day and night of work ahead of them. It took almost 12 hours—–beginning at 4:20 PM –— to clear the facility. The five marshals ended up with five semi-vans filled with 150,000 blank tape cartridges, 25,000 pre-recorded tapes, 17 winding machines, duplicating equipment, wrapping and labeling machines. Some 30 tons of equipment in all.
“This, make no mistake, was the big center for the whole country,” said Al Berman of the Harry Fox Agency, which instigated a copyright suit on behalf of 59 music publishing firms. “They were probably responsible for half of bootleg tape merchandising in the United States.” “
“In five months of operations in Phoenix,” the Fog agency’s attorney, Pasquale Cheche said, “the company made a gross profit of more than $2 million. They produced 80,000 tapes a week for $100,000 a week profit.”
That’s why Phoenix, Arizona; that’s why the security system. Private investigators, reportedly, revealed that the National Manufacturing Company had moved to Phoenix when its operation was uncovered in Southern California, where it was the American Manufacturing Company. In California—–as in New York—–it’s a misdemeanor to bootleg tapes; such a law is currently bottled up in the Arizona state legislature.
What the seizure means in the overall war on bootleggers—–or, more accurately, album and tape duplicators—–is uncertain.
Berman is just slightly short of jubilant. “This has been a sizable inroad,” he said, claiming that bootlegging “now unbelievably accounts for more than one-third of the sales of recordings in the United States,” totaling “an illegitimate revenue into the hundreds of millions of dollars,” most of it going to the manufacturers and retailers in remote or fringe towns; none of it to either artists, composers, publishers, or record companies. Capitol and RCA Records, both parties to the plaintiff, could offer no estimates on their losses.
At Warner Bros. vice-president Joe Smith agreed that the Phoenix bust was “major, in that they discovered a source of supply.” But, he added, “it still doesn’t solve any problem. They can be fined or enjoined from bootlegging, but they’re still not faced with a federal law that makes it a felony.” In short, he said, bootleggers are being caught and slapped with a misdemeanor fine, but they can pop up again with another plant. Smith said the NMC is only one of dozens of illegal operations.
The RIAA (Record Industry Association of America) is trying to get bootlegging classified as a felony through a copyright bill introduced three weeks ago by Sen. John McClellan of Arkansas. But the measure dealing with record and tape piracy is just one of several bills clumped into one large copyright law which must pass, in total, through McClellan’s subcommittee, his full committee, Senate, and House floors.
Until then, it’s a civil suit by the Harry Fox Agency against a total of 30 defendants—–including retailers, radio stations that advertised the illegal product, and the manufacturers themselves.
Pearl Rosner, lessee of the building in Phoenix, has petitioned the court to return the confiscated materials. The plaintiffs, of course, are opposing her request, reasoning, “If the evidence is returned, it will be gone tomorrow.” Judge Copple was scheduled to rule on the motion this weekend, on the 24th.
Meanwhile, attorney Cheche said, the National Manufacturing Company is still sending out tapes not listed in the suit, including top-sellers on Atlantic and A&M. Tapes are sold, often through catalogues carried by road salesmen, to retail stores for $3, or half the list price. Tapes are generally sold for $4, or $2 under the retail price for legitimate tapes.
The duplicators were discovered, Cheche said, when a worker telephoned GRT, the California tape and record company, for replacement parts for tape-winders and gave out the serial numbers on machines. GRT was on the lookout for stolen equipment – they had lost seven tape-winders–and matched the numbers from Phoenix to stolen machines. GRT sent the parts and had police trace the parts from their arrival at the Phoenix airport to the industrial park.
“The raid was almost a James Bond type operation,” Berman said. “All the personnel in the building fled but one man. This man said that what was behind a locked door that the marshal wanted to examine was not part of the operation. This didn’t turn out to be true.” Deputy Marshal Marvin Morisett had to take the pins out of the hinges. “In there,” he said, “I’m not an expert on terminology—–there were ten slaves (slaves units are the machines that duplicate tapes)–—very expensive machines.” Elsewhere, marshals found a master library for the tapes the company was spinning out, and even a kitchen for employees.
The Fox Agency, which has represented numerous publishing houses in smaller copyright infringement lawsuits, will sue for damages amounting to 8¢ for each song on each tape sold. Other record companies are expected to join Capitol and RCA in the suit. Charlie Tillinhast, attorney at Capitol, said the company would “cooperate in the action to the full extent that we’re asked by the Fox agency.” Berman, meantime, promised to press charges on “anyone who in any manner gives assistance to these parasites who plagiarize the life’s work of others, depriving them of their source of income.”