Comments on Exhibit 5 The recorded presentation of "I Believe" illustrated some essential characteristics typical of copyright music and the record industry in general, summarized in Exhibit 5. As noted in Exhibit 5, although the words and basic tune of a composition are copyrighted, a recording, i. e., a recorded performance, is not copyrighted. Exhibit 5 DEVELOPMENT of a COPYRIGHTED MUSICAL PIECE THE SONG "I BELIEVE” Words and basic tune are copyright ■ Performance is not copyright Vast majority of music reaches public through records ■Rendition and performance require creative action by many The record company designs, organizes and produces recorded performance ■ Present licensing system encourages large numbers of diverse recorded performances Comments on Exhibit 6 Exhibit 6 shows that the hit song "I Believe" has produced income for the copyright holder each year since its first release--even from those releases that were unprofitable for the companies and even in those years when record companies realized a loss on releases of "I Believe". The segments of the bar chart that reflect copyright holders' (composers and publishers) income include performance fees. 1 In regard to performance fee income, see Comments on Comments on Exhibit 7 Exhibit 7 shows, cumulatively, over a period of 12 years, that 145 releases of "I Believe" put out by 9 companies, generated the following incomes: It should be noted that "I Believe" was a great hit and has had an unusually long life. Copyright license fees are paid on all records sold, whether profits are realized or not. As will be shown later, the over-all experience of the record industry is that the relative share going to record companies is much lower, and the relative share going to copyright holders is much higher, than in the case for the relatively few selections that became hits, such as "I Believe. " 1 2 Performance fees arise primarily from the broadcasting of recorded music. in Exhibit 17. This estimate is based upon data reflected Calculated at the 1964 rate of taxation for 20 sampled companies. See Exhibits 11 or 12. Record company net profits shown in Exhibit 7 (and Exhibit 6) are before income taxes. |