If Fully Absorbed, The Cost Of Increased Royalties Could Cut Record Makers' FIRST: The most obvious possible impact could be a decrease in profits of record makers. In 1974, the second-best year the recording industry ever Pre-tax profits of the industry from records made and sold in Actually, any impact on profits would not be distributed evenly 17 Annual Cost To Consumers Could Go Up $100 Million SECOND: Since recording companies could not be 18 Recordings Of New Performers And Music Forms Would Be Riskier THIRD: As portrayed in Exhibit H, higher royalties could cause a reduction in the number of recordings brought out. Higher royalty rates would raise the breakeven point of releases. The probabilities are already low that these costs will The average breakeven point of popular LP's is up ever. - Other types of releases 45 RPM singles and new Raising the mechanical royalty rate could reduce the probabilities Generally speaking, these risky releases are those of new and experi- One consequence of a reduction in the number of recordings made and releases brought out would be a reduction in employment for artists, musicians, recording studio people, and production workers. 20 |