1 Before the COPYRGHT ROYALTY JUDGES ashington, D.C. n the Matter of Distribution of the 2004, 2005, 2006,, 2008, and 2009 Cable Royalty Funds ) ) ) ) ) ) ) ) Docket No CRB CD (Phase ) RTTEN DRECT STATEMENT OF THE MPAA-REPRESENTED PROGRAM SUPPLERS VOLUME OF RTTEN TESTMONY AND EXHBTS Gregory O. Olaniran D.C. Bar No Lucy Holmes Plovnick D.C. Bar No Kimberly P. Nguyen D.C. Bar No Naomi Straus D.C. Bar No MTCHELL SLBERBERG & KNUPP LLP 88 N Street, N, 8th Floor ashington, D.C Telephone: (202) Facsimile: (202) May9,204 Attorneys for MPAA-Represented Program Suppliers
2 Before the COPYRGHT ROYALTY JUDGES ashington, D.C. n the Matter of ) ) ) Distribution of the ) ) 2004, 2005, 2006,, 2008, and ) 2009 Cable Royalty Funds ) ) Docket No CRB CD (Phase ) RTTEN DRECT STATEMENT OF MPAA-REPRESENTED PROGRAM SUPPLERS The Motion Picture Association of America, nc. ("MPAA"), on behalf of its member companies and other producers and/or distributors of syndicated movies, series, specials, and non-team sports broadcast by television stations who have agreed to representation by MPAA ("MPAA-represented Program Suppliers"), in accordance with the September 23, 203 Order of the Copyright Royalty Judges ("Judges"), hereby submit their ritten Direct Statement in the captioned matter. MPAA submits this introductory memorandum in order to summarize the evidence it intends to present in this proceeding and to state the Phase Claims of MPAA-represented Program Suppliers for the 2004, 2005, 2006,, 2008, and 2009 cable royalty funds (" Cable Royalties"). ~ A listing of MPAA-represented Program Suppliers is being submitted as Appendix A to the testimony of Jane Saunders.
3 . NTRODUCTON The Phase portion of the distribution of the Cable Royalties was resolved by litigation as to the 2004 and 2005 cable royalty funds, followed by a confidential settlement among the Phase Parties.2 Following resolution of the Phase disputes, MPAA, on behalf of its represented Program Suppliers claimants, endeavored to resolve all disputes among all Program Suppliers in order to avoid the instant proceeding. Accordingly, MPAA engaged all of the parties who had identified themselves as having claims within the Program Suppliers category in settlement discussions. Before the Judges commenced this proceeding, MPAA reached confidential Phase settlements with the National Association of Broadcasters, Home Shopping Network, and USA/AC,3 all of whom, but for the settlements, would be participating in this proceeding. As a result of these settlements, all three parties relinquished any further claims to the Cable Royalties. On January 2, 204, MPAA notified the Judges that despite MPAA s good faith efforts to reach settlements, Phase controversies remained in the Program Suppliers category among MPAA, David Powell, and ndependent Producers Group ("PG"). On April 8, 204, the Judges dismissed Mr. Powell s Petition to Participate in this proceeding. Accordingly, as of the date of this See 75 Fed. Reg , (Sept. 7, 200); Order on Motions for Distribution, Docket Nos. -3 CRB CD ; CRB CD 2006; CRB CD ; CRB CD 2008; 20-7 CRB CD 2009; CRB SD ; CRB SD 2008; 20-8 CRB SD 2009 (February 7, 202). 3 USA Broadcasting Productions, nc., nteractive Corp. (formerly USA nteractive) and Studios USA are collectively referred to herein as "USA!AC." 2
4 filing, the only unresolved Phase controversy in the Program Suppliers category as to the Cable Royalties is between MPAA and PG. n each of the past Phase proceedings involving the Program Suppliers category, MPAA-represented claimants received the overwhelmingly largest share of the royalties attributable to the Program Suppliers category.4 Most of these Phase proceedings involved multiple Program Suppliers claimants. The awards to MPAA-represented claimants were well-justified: first, MPAA-represented claimants outnumbered other claimants within the Program Suppliers category; second, MPAA-represented claimants owned more titles than any other Program Suppliers claimant; third, MPAA-represented claimants programs constituted, by farl the largest volume of programs (i.e., minutes of program air time) available to subscribers; and fourth, MPAA-represented claimants programs had more viewing than those of any other claimants. Moreover, MPAA- represented claimants programs, which cover the entire spectrum of program genres, belonged to small mom-and-pops as well as to large motion picture studios who supply the predominant share of programs on television. The foregoing elements also characterize the claims of MPAA-represented claimants for this Phase proceeding. For the purpose of the allocation of the Cable Royalties, MPAA- represented Program Suppliers continue to believe that the relative market value standard 4 MPAA Phase awards by cable royalty year were 96.3% in 979 (49 Fed. Reg (May, 984)), 96.9% in 980 (48 Fed. Reg (Mar. 7, 983)), 96.9% in 98 (49 Fed. Reg (Mar. 2, 984)), 97.5% in 982 (49 Fed. Reg (Sept. 24, 984)), 98.2% in 983 (5 Fed. Reg (Apr. 5, 986)), % in 984 (52 Fed. Reg (Mar. 7, 987)), 99.75% in 985 (53 Fed. Reg. 732 (Mar. 4, 988)), 98.5% in 986 (54 Fed. Reg. 648 (Apr. 2, 989)), % in 997 (66 Fed. Reg (Dec. 26, 200), subsequently vacated, 69 Fed. Reg (Apr. 30, 2004)); 98.84% in 2000, 99.69% in 200, 99.64% in 2002, and 99.77% in 2003 (78 Fed. Reg (Oct. 30, 203)).
5 applies. To that end, MPAA-represented Program Suppliers will offer a simple, direct and statistically sound methodological approach to the allocation of the royalties between MPAA s and PG s claimants. That approach presumes, first, that the programs within the Program Suppliers category are generally homogeneous and, second, that such homogeneity equalizes the cost factors associated with retransmitting the various types of programs within the Program Suppliers category. As a result, MPAA submits that within the Program Suppliers category, the best three measures of market value are () volume of programming available to distant subscribers, (2) viewing of such programs, and (3) the effect, if any, of such programs on subscriber growth. Taking these factors into account, MPAA-represented claimants should receive between 99.90% and 99.99% of the Cable Royalties.. DRECT TESTMONY SUBMTTED BY MPAA-REPRESENTED PROGRAM SUPPLERS Program Suppliers will present the following witnesses, each of whom will sponsor his or her testimony and accompanying appendices and/or attachments: Jane V. Saunders serves as Senior Vice-President, Rights Management Policy and Relations ("RPMR") at MPAA. Ms. Saunders oversees MPAA s RMPR department, which is responsible for copyright royalty policy as it relates to collective and statutory rights management both in the United States and worldwide on behalf of MPAA s members and other producers and distributors of protected works. Ms. Saunders will provide information regarding the MPAA-represented Program Suppliers claim in this proceeding, including the claimants MPAA represents and the titles that comprise 4
6 MPAA s Phase claim. Further, Ms. Saunders will describe the process MPAA s RMPR department undertook to confirm that all of MPAA s represented claimants are eligible for the Cable Royalties. Ms. Saunders will also describe her international experience in negotiating and collecting retransmission royalties on behalf of MPAA members and others, and the important role that viewing information plays in international royalty allocations and distributions. Jonda K. Martin is the President and Owner of Cable Data Corporation ("CDC"), which collects and computerizes the data contained in the cable operator statements of account ("SOAs") on file with the Copyright Office. Ms. Martin will provide an overview of CDC s operations and data collection methodologies. She will also describe data reports that CDC generated and provided to MPAA and Dr. Jeffrey Gray, MPAA s economist witness, in connection with the Nielsen data presented by MPAA in this proceeding. Paul B. Lindstrom is a Senior Vice President with Nielsen, where he is in charge of research design and analysis for the Nielsen Strategic Media Research Group. Mr. Lindstrom will provide an overview of Nielsen s audience measurement methodology. Mr. Lindstrom will also provide information about the Nielsen viewing data that MPAA is relying on in this proceeding, including his role in designing the custom Nielsen Studies that MPAA commissioned for Jeffrey S. Gray, Ph.D. is the founder and President of Analytics Research Group, LLC. Relying on certain basic economic principles, Dr. Gray employs three different forms of Nielsen data, multiple other data sources, and regression analysis to calculate
7 the level of distant viewing to a random sample of stations carrying MPAA claimed works for each royalty year at issue in this proceeding. Dr. Gray s economic analyses produce the relative market value of MPAA- and PG-claimed works for each of the cable royalty years based on multiple factors, including volume, viewership, and distant subscribers.. DESGNATED PROR TESTMONY Pursuant to 37 C.F.R. 35.4(b)(2), Program Suppliers hereby designate for incorporation in their ritten Direct Statement the following witnesses testimonies from the Cable Phase Distribution Proceeding, Docket No CRB CD (Phase ) (copies of which are included in Volume of MPAA-represented Program Suppliers ritten Direct Statement): TNESS Marsha E. Kessler, former Vice-President, Retransmission Royalty Distribution, Motion Picture Association of America, nc. RECORD DESGNATON Direct Testimony and Exhibits (filed May 30, 202). Rebuttal Testimony and Exhibits (filed May 5, 203). Transcript pages (June 3, 203). Paul B. Lindstrom, Senior Vice President, Nielsen. Direct Testimony and Exhibits (filed May 30, 202). Transcript pages (June 3, 203). Transcript pages (June 4, 203). MPAA-represented Program Suppliers reserve the right to designate additional portions of the records in prior proceedings if, after examining the record designations of
8 other parties, it appears that such additional portions are necessary for a complete and accurate understanding of the import of designated evidence. V. MPAA-REPRESENTED PROGRAM SUPPLERS PHASE CLAMS Based on MPAA-represented Program Suppliers evidence in this proceeding, MPAA-represented Program Suppliers seek the following percentages of the Program Suppliers share of the Cable Royalties: Royalty, Year 2004 MPAA Claimed Share Of PS Fund (%) 99.90% % % 99.98% % % MPAA-represented Program Suppliers reserve the right to amend their ritten Direct Statement and to change their Phase claims as appropriate in light of the evidence presented by PG. 7
9 Respectfully submitted, Gregory O. Olaniran D.C. Bar No Lucy Holmes Plovnick D.C. Bar No Kimberly P. Nguyen D.C. Bar No Naomi Straus D.C. Bar No Mitchell Silberberg & Knupp LLP 88 N Street N, 8th Floor ashington, DC (202) (Telephone) (202) (Facsimile) Attorneys for MPAA-Represented Program Suppliers May 9, 204
11 Before the COPYRGHT ROYALTY JUDGES ashington, D.C. n the Matter of Distribution of the 2004, 2005, 2006,, 2008, and 2009 Cable Royalty Funds ) ) ) ) ) ) ) ) Docket No CRB CD (Phase ) Direct Testimony of Jane V. Saunders May 9, 204
12 DRECT TESTMONY OF JANE V. SAUNDERS TABLE OF CONTENTS BOGRAPHCAL NFORMATON..... V. PURPOSE OF TESTMONY... 4 OVERVE OF MPAA S CLAM... 4 MPAA S CLAM VERFCATON AND TTLE CERTFCATON PROCESS... 8 Vo VElNG AND MARKET VALUE... 9 Declaration Appendices
13 D~CT TESTMONY OF JANE V. SAUNDERS. BOGRAPHCAL NFORMATON My name is Jane V. Saunders. serve as Senior Vice-President, Rights Management Policy and Relations ("RMPR"), at the Motion Picture Association of America ("MPAA"). Prior to joining MPAA in 995, was an attorney engaged in private practice for seven years in Atlanta, Georgia and the District of Columbia. mmediately prior to j oining MPAA, worked for three years as an associate attorney handling compulsory license matters, including participating in royalty distribution proceedings before the Copyright Royalty Tribunal. received my baccalaureate degree from Dartmouth College and my law degree from Emory University. am fluent in Spanish and French and have a working knowledge of German and talian. represent MPAA and its member companies on the boards of various collective management organizations, including AGCOA, where sit on the Executive Committee and Finance Committee; the German collection society GFF USA; Danish collection societies, CAB and FilmKopi; and the Copyright Collective of Canada. am a member, with inactive status, of the Georgia State and District of Columbia Bar Associations. head MPAA s RMPR department which is responsible for copyright royalty policy as it relates to collective and statutory rights management both ~ AGCOA, the Association For The nternational Collective Management Of Audiovisual orks, is headquartered in Geneva, Switzerland.
14 Direct Testimony of Jane V. Saunders Page 2 domestically and worldwide on behalf of MPAA s members and, in some cases, other producers and distributors of compensable works. On the international front, my responsibilities include assisting in the development of policies aimed at protecting the rights of U.S. producers and copyright holders in the area of collective and statutory fights management and promoting best operational practices within rights management societies; advising MPAA member companies on aspects of U.S. and foreign copyright policy in the area of collective and statutory rights management; helping to formulate strategies to support individual management of rights; and managing relationships between MPAA members and collective fights management organizations ("CMOs"), the foreign collection societies which are responsible for the collection and administration of retransmission and other types of royalties. n Europe, for example, work to ensure that MPAA-represented U.S. producers receive their fair share of collectively managed retransmission and other royalties throughout Europe. To do so, actively engage the CMOs through which our members claim royalties and participate in the development of best practices for distribution processes. Further, represent the interests of MPAA s members in negotiation of agreements whereby they claim royalty shares and, in particular, assist the international cable retransmission royalty CMO, AGCOA, in the negotiation of agreements for collection of retransmission royalties and in the development of distribution rules and policies throughout Europe. n Canada, am responsible for
15 Direct Testimony of Jane V. Saunders Page 3 all of the operations of MPAA s retransmission royalty program via the Copyright Collective of Canada ("CCC"), including supervision of CCC staff, negotiations with retransmitters (i. e., cable and satellite companies) regarding setting rates and negotiating with the other collection society groups (i. e., claimants) regarding allocation of collected royalties. n the U.S., supervise all of MPAA s activities in connection with the administration of U.S. cable and satellite retransmission royalties (Sections and 9 of the Copyright Act, respectively), including supervision of the royalty administration and enforcement of the compulsory licenses; supervision of MPAA employees; engagement of outside vendors; procurement of data; and supervision of outside counsel. n that regard, manage a team who works closely with information technology contractors and with financial, legal and statistical professionals to provide fair and efficient distribution of royalties among our represented claimants. Until her retirement in 200, Marsha Kessler oversaw the distribution of U.S. cable and satellite retransmission royalties at MPAA. She also assisted MPAA-represented claimants in the annual filing of their claims. From until her retirement in 200, was Ms. Kessler s supervisor for the administration of retransmission royalties. Ms. Kessler testified in the recent cable Phase royalty distribution proceeding, and understand that a
16 Direct Testimony of Jane V. Saunders Page 4 copy of her testimony from that proceeding has been incorporated in MPAA s ritten Direct Statement as designated prior testimony.2. PURPOSE OF TESTMONY First, will describe the nature and extent of the MPAA-represented Program Suppliers claim in this proceeding, including the different types of programs that comprise our claim. Second, will explain MPAA s process for identifying and certifying ownership of each of the program titles claimed by MPAA in this proceeding. Finally, will discuss my international experience regarding the role of viewership as a measure of value for purposes of the distribution of retransmission royalties in Canada and Europe.. OVERVE OF MPAA S CLAM Beginning with the first royalty distribution proceeding addressing the allocation of 978 cable royalties, MPAA has been the de facto Phase representative of all Program Suppliers claimants - the owners of nonnetwork series, movies, specials, and non-team sports which air on commercial television broadcast stations retransmitted by cable systems. n Phase proceedings, MPAA represents those program suppliers who have agreed to representation by MPAA ("MPAA-represented Program Suppliers"). The lists of MPAA- 2 See MPAA ritten Direct Statement, Volume, Designated Prior Testimony and Records, at Tabs A-C (Docket No CRB CD (Phase ), ritten Direct Testimony of Marsha E. Kessler, and Heating Transcript Excerpts).
17 Direct Testimony of Jane V. Saunders Page 5 represented Program Suppliers asserting claims to Section royalties in this proceeding are set forth in Appendix A. MPAA-represented Program Suppliers include not only MPAA s so-called major members, but also dozens of smaller producers and syndicators from both the U.S. and many parts of the world - all of whom have filed claims seeking a share of the royalty pool for some or all of the cable royalty years. MPAA directly represents approximately 00 claimants in each royalty year at issue. Because many of these MPAA-represented claimants filed joint claims, have multiple subsidiaries, and include royalty collection agents, MPAA directly and indirectly represents between 3,000 and 4,000 claimants per royalty year. Appendix A is limited to only the particular MPAA-represented Program Suppliers who have certified their authority to collect retransmission royalties for programming that is compensable in this proceeding. This list includes between 200 and 300 MPAA-represented claimants per royalty year. Although MPAA-represented programs fit generally under the umbrella of series, movies and specials, the width and breadth of those programs are quite remarkable. Our programs include game shows, sitcoms, news magazines, interview shows, sports shows and sporting events, awards shows, health and fitness shows, and animal shows, as well as similar Spanish works. The following are examples of our programs:
18 Direct Testimony of Jane V. Saunders Page 6 Animated series and sitcoms, such as: FRENDS (arner Bros. Domestic Television Distribution), THAT 70S SHO (Carsey-erner-Mandabach Productions, LLC), and THE SMPSONS (Fox Entertainment Group, nc.). Movies, such as: AFRCAN QUEEN (Carlton nternational), A FSH CALLED ANDA (Metro-Goldwyn Mayer Studios, nc.), and YOUNG GUNS (Morgan Creek nternational, nc.). Game shows, such as: FAMLY FEUD (FremantleMedia NA) and JEOPARDY[ ( Jeopardy Productions, nc.). Sports shows and sports-related programs, such as: BABE NKELMAN S GOOD FSHNG (Babe inkelman Productions, nc.), GEORGE MCHAEL SPORTS MACHNE (King orld Productions, nc.), KNG OF THE HLLS--THE 89TH PGA CHAMPONSHP (Professional Golfers Association of America), THS EEK N BASEBALL (Major League Baseball Properties, nc.), NASCAR RACNG (NASCAR Media Group), 2005 AMERCAN SK CLASSC (Jalbert Productions, nc.) and E SMACKDON! (orld restling Entertainment, nc.). Awards shows and pageants, such as: AMERCAN LATNO AARDS (Latination, LLC), MSS HAAAN TROPC NTERNATONAL PAGEANT (Bennett Productions, nc.), 6ST ANNUAL GOLDEN GLOBE AARDS (dick clark productions, inc.), and THE 40TH NAACP MAGE AARDS (Twentieth Century Fox Film Corporation).
19 Direct Testimony of Jane V. Saunders Page 7 News shows, such as: MCLAUGHLN GROUP (Oliver Productions, nc.) and ALL STREET JOURNAL REPORT (NBC Universal, nc.). Reality shows, such as: AMERCAN DOL (FremantleMedia NA), SURVVOR: ALL-STARS (CBS Broadcasting, nc.), THE BGGEST LOSER (NBC Universal, nc.), and THE BACHELOR (New Line Cinema Corporation). Animal shows, such as: LD ABOUT ANMALS (Steve Rotfeld Productions, nc.), ANMAL RESCUE (Telco Productions, nc.), and PET KEEPNG TH MARC MORRONE (Martha Stewart Living Omnimedia, nc.). nterview and talk shows, such as: THE OPRAH NFREY SHO (King orld Productions, nc.) and MARTHA STEART LVNG (Martha Stewart Living Omimedia, nc.). All of these and many more types of programs fall within the MPAA- represented Program Suppliers claim. Relative to Phase claims, MPAArepresented Program Suppliers not only have the largest number of programs, they also have an extremely diverse array of programs. An alphabetical list of all of the program titles that MPAA-represented Program Suppliers are claiming in this proceeding for each royalty year is attached to my testimony as Appendix B. Taken together, this list includes an average of 3,700 unique titles for each of the
20 Direct Testimony of Jane V. Saunders six cable royalty years in question, for a total of more than 22,000 MPAA-claimed titles for the six-year period. Definitions ask that you please refer to the Direct Testimony of Marsha E. Kessler dated May 30, 202, Docket No CRB CD (Phase ), which is included as part of MPAA s designated prior testimony in this proceeding, wherein Ms. Kessler provided definitions of the following terms cormnonly used in Section discussions: TV station, cable network, network station, independent station, network programming, nonnetwork programming, network TV stations, transmission, retransmission, local market, local service area, distant station (signal), local station (signal), and retransmission royalties. V. MPAA S CLAM VERFCATON AND TTLE CERTFCATON PROCESS MPAA has developed and maintains internal standards to ensure that only those individuals or entities who are truly entitled to claim rctransmission royalties are able to assert a claim for those royalties through MPAA. To be a MPAArepresented claimant, a rights holder must satisfy the following requirements: () file a timely claim for retransmission royalties each year with the Copyright Office ("Office"); (2) provide MPAA with an "as-filed" copy of that claim, demonstrating that it was submitted to the Office in a timely manner; and (3) have a valid representation agreement with MPAA, or be a party to a j oint claim filed by an agent who has a representation agreement with MPAA. All of the MPAA-
21 Direct Testimony of Jane V. Saunders Page 9 represented claimants listed on Appendix A to my testimony satisfied these requirements. Relative to , for those parties who satisfied the requirements, MPAA identified the program titles for which those entities were entitled to claim Section royalties. Once MPAA identified the program titles we believed were attributable to a particular MPAA-represented claimant, we prepared a certification report listing those ritles and sent it to the claimant, along with a certification form for the claimant to sign verifying that party s right to claim the works listed on the certification report. Each claimant was required to review the report, strike through any titles for which it was not authorized to claim retransmission royalties, and to then certify its ownership of the remaining titles. MPAA s represented claimants returned their executed certifications to my staff at MPAA, who ensured that any corrections made to the report were accurately captured by MPAA. My staff at MPAA performed the tasks just described on a royalty year-by-royalty year basis. The list of MPAA-represented claimants titles in Appendix B of my testimony were all subject to this certification process. V. VENG AND MARKET VALUE understand that the standard for allocation of royalties in this proceeding is the relative market value of programs. n their decision regarding the distribution of the Phase cable royalties, the Copyright Royalty Judges ("Judges") concluded:
22 Direct Testimony of Jane V. Saunders Page 0 [V]iewership can be a reasonable and directly measurable metric for calculating relative market value in cable distribution proceedings. ndeed, the Judges conclude that viewership is the initial and predominant heuristic that a hypothetical CSO would consider in determining whether to acquire a bundle of programs for distant retransmission, subj ect to marginal bundling adjustments needed to maximize subscribership. Distribution of the 2000, 200, 2002, and 2003 Cable Royalty Funds, 78 Fed. Reg , (Oct. 30, 203). think the Judges might find it useful that my international experience with the negotiation, collection and distribution of retransmission royalties on behalf of MPAA members and others is consistent with the Judges conclusion regarding viewing. Canada has a compulsory license system similar to that in the U.S. n that system, nine collective societies (the Canadian equivalent of claimant groups), each representing a category of rights owners, claim royalties paid by retransmitters under that license for the distant retransmission of audiovisual works. Viewing is the metric relied upon by the Canadian Copyright Board ("CCB"), a body comparable in mission to the Copyright Royalty Judges ("Judges"), to allocate shares of total royalties paid by retransmitters among the Canadian collectives. To that end, one or more of the claiming collective societies, which represent the rights holders, submit individually or jointly (depending on the royalty year period in question) viewing studies to the CCB. These studies are based upon ratings information for broadcast events during a given royalty year, obtained through a monitoring organization called BBM
23 Direct Testimony of Jane V. Saunders Page Canada, and other metrics to winnow out distant subscriber viewing of the various audiovisual works claimed by each collective. The CCB has relied on these viewing studies to allocate the collected royalties. n Europe, the copyright system is rather different from that in the U.S. Still, some hopefully useful comparisons can be made to inform these proceedings with respect to relying on viewing to determine the allocation of royalties to rightsholders. n most European countries, royalties for all retransmissions, not only distant retransmissions, are paid by cable systems to a variety of CMOs representing many different copyright ownership groups. A peculiarity of European Union ("EU") law is that only cable retransmission royalties are subject to mandatory collective management--in other words, a comparable system to a compulsory license such as that we have in the U.S. and in Canada--under the framework of the EU Cable & Satellite Directive. The largest claimant in the European landscape representing producers (and the only claimant representing international producers) who wish to claim these retransmission royalties for audiovisual works is AGCOA. AGCOA, which has thirteen thousand rights holder claimants, was established in the late 980s to represent producers of audiovisual works.3 AGCOA claims a share of total royalties from European 3 AGCOA does not represent authors, performers or broadcasters, who have separate copyright protections under most European legal systems and who, as a result, can claim a separate share of total retransmission royalties from cable systems.
24 Direct Testimony of Jane V. Saunders Page 2 cable operators in respect of the fights of its membership, which consists of producers of non-news, non-sports programming in the vast majority of European countries. AGCOA s share of these royalties is determined largely through a negotiation process, and there is no adjudicative body comparable to the Judges that supervises those negotiations. The share ultimately received by AGCOA of cable retransmission royalties is based largely on the scope of AGCOA s repertoire (volume) and the number of channels retransmitted in a particular country that include the AGCOA repertoire (i.e., works claimed by AGCOA fights holders). n the distribution of those royalties among AGCOA claimants, however, viewing is the key and critical component in AGCOA s allocation of royalties to a particular work. Other factors such as duration of the work are also factored into the analysis. AGCOA and its partner organizations purchase viewing data for every channel above a certain market share threshold (as a general rule, 2%). These data report actual viewing per broadcast event longer than one minute. AGCOA allocates royalties it receives from cable operators to each claimed work in its repertoire that has been broadcast and retransmitted in a given royalty year using these viewing data. Thank you for the opportunity to present the information in this testimony. hope it will be helpful in the Judges deliberations.
25 DECLARATON OF JANE V. SAUNDERS declare under penalty of perjury that the foregoing testimony is true and correct, and of my personal knowledge. Executed on May 9, 204 J~ V. Saunders
26 DRECT TESTMONY OF JANE V. SAUNDERS APPENDX A
27 MPAA-REPRESENTED CLAMANTS, 2004 CABLE CLAM CLAM MPAA-REPRESENTED CLAMANTS 3DD ENTERTANMENT LMTED YEAR 2004 NUMBER 58 CLAM TYPE PHASE CATEGORY* 4KDS PRODUCTON F/K/A THE SUMMT MEDA GROUP AC COMMUNCATONS AGCOA AGCOA URHEBERRECHTSSCHUTZ ALFRED HABER, NC.,AMDEN CORPORATON AMERCAN BROADCASTNG COMPANES, NC. AMERCAN LATNO TV, LLC ANN, NC. A/K/A VOLET LGHT ANTENA 3 TELEVSON, S.A. ARTSAN ENTERTANMENT ARTST & DEA MANAGEMENT, LTD. ARTST VE ENTERTANMENT AUDO-VSUAL COPYRGHT SOCETY TRADNG AS SCREENRGHTS AUGUST ENTERTANMENT AUSTRALAN CHLDREN S TELEVSON FOUNDATON AUSTRALAN FLM COMMSSON AV PCTURES BABE NKELMAN PRODUCTONS, NC J J BANJO BUDDES, NC. D/B/A BANJO FSHNG SYSTEMS BANKSA PRODUCTONS PTY LTD BARRON ENTERTANMENT LTD BELL-PHLLP/BBL DSTRBUTON, NC. BENNETT PRODUCTONS NC. BEYOND NTERNATONAL BG TCKET TELEVSON, NC. BODY BY JAKE ENTERPRSES, LLC. BROADCAST MEDA BUCKHEAD MARKETNG & DSTRBUTON BUENA VSTA TELEVSON (DBA DSNEY-ABC DOMESTC TELEVSON) CALFON PRODUCTONS, NC. CAPTOL FLMS LTD CARLTON AMERCA CBS BROADCASTNG NC. CBS STUDOS, NC. CC RELEASNG NC. CELEBRTY PRODUCTS DRECT, NC. CF ENTERTANMENT, NC. CHANNEL 5 NTERNATONAL CHANNEL FOUR TELEVSON LTD CMA FLMS, S.A. CNE VSON, S.A. CNEMATOGRAFCA EL S.A O J J J CNEPRODUCCONES NTERNACONALES, S.A. DE C.V. CLASSC MEDA, LLC