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Because of the differences in rate patterns among the three types of records, which was noted above, we prepared a separate tabulation for each type of record. Exhibit 17 covers the Singles; 18-A & B, the Regular Price LP albums; and Exhibit 19 covers the Budget label albums.
Royalty Rates on Singles
As regards "Singles", a cursory glance at Exhibit 17 is all that is needed to show that the statutory rate is the standard rate for such records, and that discounted rates are very rare. Of the 162 records covered, there were discounted rates on only 7 records, and as indicated above, the discounted rates applied to only 13 licenses, only 4.3% of the total of 315 licensed tunes. In each of these 13 instances, the performing artist either owned or had an ownership interest in the copyright of the tune being performed, aná granted a flat mechanical rate for the entire record. Of these rates discounted because of artist interest, 11 or 85% were at 1.50¢, and 2 or 15% were at 1.754. The one record with two rates at 1.75¢ suggests the possibility that real negotiation as to royalty may occasionally take place with singles. However, it is more likely that the rate arrived at reflects other provisions in the contractual arrangement between artist and recording company in addition to the "relative bargaining strengths" of the parties. Most of the "bargaining" in these instances seems to relate more to payments for the artist's performance, or to the price of the master tape which may be produced by the artist himself, rather than to the royalty rate paid on the copyright, as such.
In summary, 24 is the prevailing rate for singles. Departures from that rate represent standard, common recognized variations from that 2¢ standard.
Royalty Rates on List Priced LP's
We now turn to royalty rates paid on licenses for tunes on List Priced LP albums.
As shown in Exhibit 16, the sample included 168 such albums
On 74 tunes or 7.1% of the instances, rates of more than 2¢ were
That leaves 124 licensed tunes, or 11.8% of the cases on which less
A detailed look at these 124 exceptions reveals a great deal about how the music publishing industry and the recording industry interface with each other.
Exhibit 18-A on p. 74 details all rates for all Regular Price LP's in the sample. The pattern of discounted rates by level of rate and by reason for the discount appears on the next page in Exhibit 18-B. Of the 124 rates payable at less than 24, 56 were for tunes in which the performing artist had an ownership interest. Of these rates, 50 were paid at 1.50¢. These rates are scarcely results of "bargaining". This rate of 1.50¢ represents 3/4 of the statutory rate and is customary. in the industry. There remain 6 other rates of less than 2¢ in which the artist had an interest. On one album, a group of performing artists was also the composer and publisher of a block of 5 tunes and this group granted only a 1/4¢ discount on the license covering these 5 tunes. On another album, arrangements were made with a single artist-composer covering the entire record of 10 tunes for an overall royalty rate of 22¢ for the album. Two of the tunes were of longer than average duration and had rates above 24, 7 were at the statutory rate of 2¢, and the 1 which was shorter than average duration was allocated the residual amount of the album rate, namely 1/2€.
There were 40 rates of less than 2¢ which represented "block discounts" which are customarily paid when a record contains several tunes in which the copyright is held by a single owner or group of owners. It is a form of quantity discount, generally recognized in the industry. Records containing such
"blocks" of tunes are often recordings of works of a single well-known com-
In one album a publishing company granted a 1/4¢ discount on
Another publishing company granted a 1/2¢ discount per tune
Another record involved a contract with a film producer and several
Finally, one publishing company arranged a set of rates for a 16- .
There were also 28 licensed tunes on 5 albums with royalty rates of less than 2¢ on the basis of their being designated as "medley discounts". Such medley discount rates occurred as follows:
On one album (#367) of 20 tunes there was a 6-selection medley
companies at a 1/4¢ discount (one publishing company granted 1/24
A second album (#373) of 16 tunes had discounted rates of 1/2¢
A third album (#418) of 11 tunes with one longer than average had
The fourth album (#431) of 15 tunes had a 5-tune medley with all
The fifth album (#354) of 21 tunes contained 2 medleys each of 7
In these rates, certain practices are revealed that are more or less standard in the industry. They cover situations which we have designated as artist-interest discounts, block discounts, and medley discounts. Though the amounts of discounts granted in these instances are not uniform, the examples of real bargaining between the parties concerned are rare, because the practices of any one publisher are usually standardized.
In sum, we have looked at Regular albums released over the better part of a year by two well-known record makers and have found that the royalty rates paid were the statutory rate or standard, uniformly available, variations therefrom.
57-786 0 - 76 - pt.3 - 8