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In the San Francisco-Oakland market where, as reflected above, profits were not as substantial as those found in other markets, the 18 stations which were analyzed reported that 75.53 percent of all broadcast time was recorded and that 78.91 percent of all commercial time was of the recorded variety.

The 23 Philadephia area stations which were analyzed showed a somewhat higher degree of dependency upon recorded programming than stations in most of the other major markets; they devoted 79.87 percent of all hours to recorded programming and 82.93 percent of commercial time to recorded programming. The 27 Chicago stations for which usable data was obtained reported that 73.15 percent of their total broadcast time featured recordings, as did 77.18 percent of their commercial time.

Data for 31 stations in the Los Angeles-Long Beach market shows that 77.02 percent of their broadcast days utilized recorded music and that recorded music was used in 78.19 percent of their commercial time.

The 33 stations in the New York City market for which data was obtained reported that 72.21 percent of their programming was recorded and that 78.91 percent of this commercial time was recorded.1

3. Other Metropolitan Markets.-Data has also been obtained for 30 other metropolitan areas for which market financial data is released by the Commission. These markets range in size from St. Louis, Missouri, which is the tenth market based on population, to Tyler, Texas, which is the 230th market based on population.

Usable programming data was obtained from the renewal applications of 229 stations operating in these 30 markets. During the composite weeks analyzed, the 229 stations reported broadcasting a total of 27,202 hours, 20,505 (or 75.38 percent of all hours) of which were of the recorded variety. There were 17,586 commercial hours broadcast, of which 13,386 (or 76.11 percent) were of the recorded variety.

Dependency upon recorded music as a source of programming ranged from 86.86 percent of all hours for the three stations in Tyler, Texas, to 65.32 percent of all hours for the four stations for which data was obtained operating in Waterbury, Connecticut. The percentage of recorded programming to all commercial hours ranged from 86.26 percent for 12 stations in the MinneapolisSt. Paul market to 58.44 percent for the seven stations for which programming data was available operating in Springfield, Missouri.

The 229 stations also carried a total of 2,019 network commercial hours which represented 11.48 percent of all commercial hours, although network time sales totaled only $1,091,655, or 1.45 percent of the markets' total time sales. Thus, network and recorded programming accounted for 15,405 hours (87.59 percent of all commercial hours). Assuming, except for network programming, a direct relationship between commercial hours and time sales, the 13,386 (76.11 percent) recorded commercial hours accounted for 83.75 percent of sales while the 2,019 (11.48 percent) network commercial hours accounted for only 1.45 percent of sales."

The following table contains detailed figures for the 229 stations in the 30 additional metropolitan market areas analyzed, exclusive of figures for network programming:

1 Stations operating in these 10 markets also broadcast a total of 1.013 network commercial hours (5.69 percent of all commercial hours), although network sales accounted for only 1.16 percent of time sales in the market. Giving appropriate weight to this factor and assuming, apart from network programing, a direct relationship between commercial hours and time sales, the recorded commercial hours accounted for 80.82 percent of sales in the markets.

17 The 83.75 percent figure is obtained by subtracting from the network commercial time 255 hours (representing 1.45 percent of total commercial hours) and crediting recorded commercials with 76.11 percent of the balance of network commercial hours.

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4. Smaller Markets.-As previously noted, the Commission publishes composite figures for a particular market only if at least three stations in the market file the required financial report. This aspect of the study is concerned with nonmetropolitan markets for which FCC financial figures are available. The Commission's 1965 financial report contains figures for 87 such markets. A total of 30 markets in 30 different states were analyzed.

In considering these smaller markets, consideration was given network commercial programming in order to give a more realistic picture of the extent to which recorded music is utilized, particularly in the revenue-producing end of the stations' operations. Of the 92 stations operating in the 30 markets analyzed for which data was obtained, 72 carried network programming. The analysis shows that network programs account for a disproportionately small share of the revenues for a station in comparison with the amount of network commercial programming carried.

Thus, in Selma, Alabama, for example, where time sales (including network) totaled $217,667, network programming accounted for 24.73 percent of the total commercial time. Network revenues to stations, however, totaled only $5,512 or 2.48 percent of total sales. Similarly, in Alexandria, Louisiana, where time sales totaled $553,039, network programming accounted for 22..1 percent of the total commercial time, although network revenues to stations totaled only $8,241, or 1.49 percent of the total revenues.18

During the composite weeks analyzed by the 92 stations for which usable data was obtained in these 30 markets, a total of 10,846 hours were broadcast, 7,162 (or 66.03 percent of all hours) of which were of the recorded variety. There were 7,471 commercial hours broadcast, of which 4,898 (or 65.56 percent of all commercial hours) were of the recorded variety. The 72 stations utilizing network programming broadcast a total of 1,484 network commercial hours which represented 19.86 percent of all commercial time, although network revenues accounted for only 2 percent of the time sales in the markets. Thus, network and recorded programming accounted for 6,832 hours (85.42 percent of all commercial hours). Assuming, except for network programming, a direct relationship between commercial hours and time sales, the 4,898 (65.56 percent) recorded commercial hours accounted for 77.27 percent of sales, while the 1,484 (19.86 percent) network commercial hours account for only 2 percent of sales."

The following table contains detailed figures for the 92 stations:

18 Because of the larger numbers of nonaffiliated stations in the 10 larger markets, it was not necessary to consider network programing, except in general terms, because the substantial disproportion does not there result. On an overall basis, however, network revenues to stations totaled $11,039,606 which represents only 1.39 percent of total time sales for stations.

19 The 77.27 percent figure is obtained by subtracting from the network commercial time 149 hours (representing 2 percent of total commercial hours) and crediting recorded commercial with 65.56 percent of the balance of network commercial hours.

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5. One-Station Markets.-As heretofore noted, the Commission publishes market figures only if three or more stations operating in a particular market file the required financial report. Figures for individual stations are not released and, accordingly, it is not possible to relate directly programming and revenues for one and two-station markets.

In 1965 there were 1,481 communities in which only one station operated. Under the Commission's method of reporting, a community with one AM and one FM facility operated under common ownership would be considered a one-station market.

Of these one-station market we selected at random three markets from each state. Usable programming data was available for 120 stations so selected, representing, of course, 120 different communities.

During the composite weeks analyzed these 120 stations reported broadcasting a total of 13,539 hours, 9,357 (or 69.11 percent of all hours) of which were of the recorded variety. There were 8,595 commercial hours broadcast, 6,051 (or 70.40 percent) were of the recorded variety.

There were 78 of the 120 stations which reported broadcasting network programming a total of 1,065 commercial hours which represented 12.39 percent of all commercial time. Thus, network and recorded programming accounted for 7,116 hours (82.79 percent of all commercial hours). On a nationwide basis, network time sales for individual stations accounted for only 1.39 percent of total time sales. Using this percentage and assuming, except for network programming, a direct relationship between commercial hours and time sales, the 6,051 (70.40 percent) recorded commercial hours accounted for 78.15 percent of sales, while the 1,065 (12.39 percent) network commercial hours accounted for 1.39 percent of sales.20

6. Other Stations.-As previously noted, programming information was obtained from renewal applications which are filed in alphabetical order by call letters. In order to obtain a random sampling of other stations we analyzed programming information for every eighth station for which usable data was available and for which figures are not contained elsewhere in this study.

Figures for a total of 455 stations were thus obtained. During the composite weeks analyzed by these stations, a total of 49,941 hours were broadcast, 36,558 (or 73.20 percent of all hours) of which were of the recorded variety. There were 32,263 commercial hours broadcast, of which 24,506 (or 75.95 percent of all commercial hours) were of the recorded variety. These stations also reported broadcasting a total of 2,729 network commercial hours which represented 8.45 percent of all commercial time. On an industry-wide basis, however, network sales to stations accounted for only 1.39 percent of total time sales. Using this figure and assuming, except for network programming, a direct relationship between commercial hours and time sales, the 24,506 recorded commercial hours accounted for 81.33 percent of sales, while the 2,729 network commercial hours accounted for only 1.39 of sales."

Senator BURDICK. I have just one question at this time, and we will reserve more questioning until the testimony of the entire panel is finished, unless the Senator has a question.

Senator McCLELLAN. No.

Senator BURDICK. Was the subject and the text of the Williams amendment argued and presented in the House?

Mr. ARNOLD. The record industry offered no testimony on performance rates before the House committee. The Register had informed us that it would prefer not to have that issue raised and we therefore confined our efforts to insisting that the mechanical rate remain at 2 cents. However, Mr. Livingston, on behalf of Capitol Records, did raise the issue of performance rates. In answer to Mr. Livingston's testimony the Register concluded:

20 The 78.15 figure is obtained by subtracting from the network commercial time 119 hours (representing 1.39 percent of total commercial hours) and crediting recorded commercial with 70.40 percent of the balance of network commercial hours.

21 The 81.33 percent figure is obtained by subtracting from the network commercial time 448 hours (representing 1.39 percent of total commercial hours) and crediting recorded commercial with 75.95 percent of the balance of network commercial hours.

79-397-67-pt. 2-12

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