Mechanical Royalties Have Increased

SECOND, largely because of recording industry innovations such as
prerecorded tape, the volume of recording sales has grown rapidly
over the last decade. Consequently, as shown in Exhibit C,

Total royalty payments received by publishing companies
and others from phonograph records have increased greatly.
Over the past decade, these royalties from the United States,
alone, have more than doubled, from $38 million to about $79
million.

In addition, royalty payments to publishing companies and
other copyright owners by foreign record makers rose from
about $7 million in 1963 to about $35 million in 1973. Much
of this was from foreign pressings of U.S.-made recording

masters.

When incomes of publishing companies from recordings are
being considered, it is altogether proper to take into account
that they also receive performance royalties from the commercial
uses of phonograph records and tapes. Performance royalties
to publishing companies and other copyright owners for radio
broadcasting of records amounted to about $34 million in 1973.
In addition, they received a large sum for the use of phonograph
records and tapes in commercially produced "background" music.

8

Mechanical Royalties Outpace Inflation and Median Family Income

THIRD, as shown in Exhibit D,

Royalty payments to publishing companies by record makers
have increased much faster than both

(a) the Consumer Price Index and

(b) Median Family Income.

Expressed in index numbers, the Consumer Price Index
went from 100 in 1963 to 145 in 1973. Over the same
period, Median Family Income rose, in terms of index
numbers, from 100 to 193. Thus, Median Family Income
went up faster than inflation.

Mechanical royalty payments by the U.S. recording industry
went up faster than either the Consumer Price Index or
Median Family Income. These payments, also in terms of
index numbers, went from 100 to 205. If overseas royalties
from the use of U.S.-made masters were included, these pay-
ments would have gone still higher.

10

D Mechanical royalties outpace inflation

& median family income 1963 vs.1973