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ROYALTY DISTRIBUTION OF TUNES ON RECORDS - RELEASED TO THE TRADE IN 1974 PERI:)D

Regular Price LP Albums *

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Not including eight records either released before 1974 or to be released later on
which only one of the_tunds was licensed in 1974. No such tune was licensed at
a discounted royalty rate.

1) Artist interest discount
2) Block discount
3) Medley discount
** Records 1407, 408, 409, and 410 and #422,423,424, and 425 are four record

albums #453, 454,455, and 1460, 461, and 462 and 463 are 3 record albums,
and #444, 445, 4458, 459 and #463 and 464 are 2 record albums. Each record
in such albums has been shown separately and counted separately.

57-786 O - 76 - pt. 3 - 9

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ROYALTY DISTRIBUTION OF TUNES ON RECORDS RELEASED TO THE TRADE IN 1974 PERIOD

Budget Albums

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*Total royalty rate for the album was set at 1164 and involved two nedlay discounts and ane block discount

A two record set detailing for $7, on which some publishers-agreed to grant budget album discounts, especially on the shorter_duration-tunos

Artist interest discount 22 Block discount

114

Rates on "Club" Records

Finally, there is the second category of non-regular price albums which are sold either to record clubs or to non-music organizations for use as premiums, and which provide additional opportunities for incremental revenues to copyright owners. In the 1974 periods the two record companies released 98 of these so-called "Club albums", all at lower than regular prices. These 98 albuns contained 1,052 licensed tunes. For these club album tunes, a standard pattern of discounts is very apparent. In 948 or 90.1% of the licensed tunes, the royalty rate is 75% of the regular commercial rate for that tune. In 89 instances, 7.4% of the total, no discount at all occurs from the regular commercial rate for the tune. In only 15 instances did discounts of other than the standard 25% occur.

It should be noted that the regular commercial rate from which the club rate is calculated is not always 24. It is 2¢ for more than 80% of the tunes, but in the remaining cases the regular rate is either above or below 2¢. The pattern of the discounts fron the regular rate is set forth, record by record, in Exhibit 20, on pages 82-83.

Three other characteristics of the rate pattern can be cited.

First, in all cases where the regular rate was greater
than 24, the club rate was 75% of the commercial rate.

Second, in 820 of the 841 instances where the commercial
rate was 24, the discount was exactly 25%. Of the other
21 cases, no discount was granted on 17 tunes, and a 50%
discount was granted on the other 4 tunes.

“Third, where the regular commercial rate was less than
24, there tended to be less than the standard 25% discount
from the commercial rate. For example, of the 52 instances
where the commercial rate was 14, only 5 tunes were granted
the special 25% club discount; there was no club discount
granted for the other 47 tunes.

This concludes the presentation of rate data.

115

Exhibit 20

CLUB RECORDS
Royalty Rates As Compared To Regular Commission Rates

On Records Released in 1974 Period

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12 12 See footnote on the next page.

Exhihit 21 (continued)

CLUB RECORDS

116

Royalty Rates As Compared To Regular Commission Rates On Records Released in 1974 Period

(continued)

Total
Tunes

Rates Licensed _at_75%

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Rates at Other than 75°; 25-19 1.75-1.5 1.5-1.5 14-15

Other

1

6 9 7 12 11 13 7 1 12 2 5 10 6 2 30

6 10 8 9 12 11 12 10 10

8 24 29 1 9 13 11 16 16

6 9 7 12 11 11 7 1 12 2 5 3 6 2 29

6 10 0 2 11 11 12 10 9 8 24 14 1

9 13 11 16

5

3 1

5 5

ş

1

5

9

11

6 8

6 8

21 12 12

21 11 12

20

18

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Album

655 656 657 658 659 660 661 662 663 664 665 666 667 668 669 670 671 672 673 674 675 676 677 678 679 680 681 682 683 684 685 686 687 688 689 690 691 692 693 694 695 696 697

Total

The first rate of cach pair is the regular commission rate and the second is the Club Album rate.

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