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Mechanical Royalties Paid Per Released Tune Outpace Inflation and Median
Family Income

Now, one last point in the inflation argument. If, as our evi-
dence suggests, the vast majority of mechanical royalties are
paid on recent releases, then the mechanical royalties paid per
released tune gives a typical picture of what each release yields.
As shown in Exhibit E,

The average mechanical royalty paid per released tune
has also increased notably faster than inflation, from
$656 in 1963 to $1,399 in 1972. In index terms, this
is an increase from 100 to 213.

Many tunes are recorded by a variety of artists and each
new recording provides additional royalty income from a
single composition.

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E Mechanical royalties

paid per released tune
outpace inflation and
median family income
1963 vs.1972

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To summarize the inflation argument:

The share of the proceeds of record sales going to music
publishing companies and other copyright owners is substan-
tially greater than it was when copyright in recorded music
was granted and the statutory rate was established.

The total dollar amount of those payments is vastly, enormously
greater than it was at that time.

The proceeds irom these royalties, as measured both in the
dolla: aggregate and in terms of royalties received per released
tune, have beaten inflation by a wide margin, as gauged by either
the Consumer Price Index or Median Family Income.

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RAISING THE ROYALTY RATE WOULD HAVE SERIOUS IMPACTS

We now move on to consider the impacts of the proposed increase in the royalty rate on the recording industry and others. To understand these impacts, please consider Exhibit F.

Under The Proposed Rate, Payments To Copyright owners would Go Up $47 Million

It should be noted that in 1974 U.S. domestic royalty
payments were about $79 million. These payments were
made under the present statutory rate of 24.

Under the proposed rate of 3¢ or 3/4¢ per minute
for overtime, these payments would have gone up
by about $47 million to something like $126 million.

An increase of this size in mechanical royalties
must have serious impacts on the recording industry
and parties interested in it.

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F Payments to copyright

owners would go up
$47,000,000

$126,000,000

$47,000,000

$79,000,000

At 2¢

1974

At 3¢

57-786 0 - 76 - pt. 3 - 3

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