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Selling the U.S.

October 04, 1987

Sony's effort to buy CBS Records ("Sony Has Made $1.8 Billion Offer to Buy CBS Records," Sept. 12) could preface a new chapter in "The Selling of America."

With so many household American brand names already in foreign hands--GE, Norelco, Magnavox, Philco, Smith-Corona and others--it may be hard to be concerned about the purchase of a record company even if it is the world's largest. We've sold off our consumer electronics hardware businesses to foreigners, why not sell off the software as well?

But insight into what is at stake comes from a column by James Flanigan, which appeared in The Times Business section just three days earlier.

Flanigan described American entertainment as the best export the United States has, and compared the $4.9-billion trade surplus it generates--second only to Boeing jet planes as an export earner--to our trade deficit in the hardware of entertainment, around $2.6 billion worth of TVs and VCRs. Could it be that we're overlooking a profitable combination that the Japanese aren't: hardware, software and the selling of American culture?

Capitol Records President Joe Smith finds Sony's purchase of CBS Records a "frightening" prospect since Sony might turn around and license the CBS library for DAT (digital audio tape, a high-quality recording technology that some feel will enable pirating) and the rest of the recording industry would have to follow suit.

One might question Smith's short-term view, in that if DAT encourages pirating, then Sony as the new owner of CBS Records would quickly become one of the biggest losers.

A more appropriate and longer-term focus would be for the marketers of American culture on records to realize that DAT is merely one in a series of remarkable audio-visual technologies that will flow from Pacific Rim labs in the coming years, and that access to U.S. software is crucial to the acceptance and survival of such breakthroughs.

No one is blaming U.S. consumer electronics manufacturers for bailing out and looking for profits elsewhere when the going gets absurdly competitive.

But let's face it, when it comes to the marketing of American culture, the United States still has a relative monopoly, and maybe we should remind ourselves--as the people at Sony have--that American culture is a unique resource, and that U.S. record and videotape libraries contain a heritage and history that will never be duplicated--except, of course, through the advancing medium of electronics technology again, and again, and again, and again.

Let's hope that the American Dream that Flanigan calls our "best export" doesn't wind up as just another import.


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