TECHNICAL APPENDIX TO THE STATEMENT OF JOHN DESMOND GLOVER ON H.R. 2223, SECTION 115 BEFORE SUBCOMMITTEE ON COURTS, CIVIL LIBERTIES, AND THE ADMINISTRATION OF JUSTICE UNITED STATES HOUSE OF REPRESENTATIVES September 11, 1975 119 PREFACE This Technical Appendix explains, supports and amplifies the data contained in the "Statement on Sec. 115 of H.R. 2223 of John Desmond Glover, Director, Cambridge Research Institute" before the Subcommittee on Courts, Civil Liberties, and the Administration of Just rice of the Committee on the Judiciary, U.S. House of Representatives, September 11, 1975. The statement was based upon a study of economic effects of proposed changes in provisions of the copyright law relating to the licensing of copyrighted music for recordings. This was the second such study conducted in ten years. The material that follows is organized into two main sections. The first section supports exhibits in the Summary Statement (pages 1 to 31 herein) presented orally by Dr. Glover to the Subcommittee. References are provided to specific sections of the full statement which explain the conclusions stated in the Summary exhibits. The second section supports exhibits in the full statement, as needed. 120 D. Mechanical Royalties Outpace Inflation and Median Family Income, 123 E. Mechanical Royalties Paid Per Released Tune Outpace Inflation 123 F. Payments to Copyright Owners Would Go Up $47 Million 124 J. In 1974 as in 1963 Tunes were Licensed at 24 or Standard 124 2 & 3. 4. INCOME TO COPYRIGHT OWNERS FROM RECORDINGS, 1973 vs. 1963 126 132 S. ESTIMATED FINANCIAL STATISTICS AND INCOME STATEMENT FOR THE U.S. 132 6. STATUTORY LICENSE ROYALTIES PER TOP 150 LP ALBUMS IN 1973 AT VARIOUS 158 7. 8. 9. FINANCIAL IMPACTS OF PROPOSED INCREASED MECHANICAL ROYALTIES ON 159 160 160 10. COST TO CONSUMERS OF A 3¢ STATUTORY LICENSE RATE 161 11. IMPACT OF A COPYRIGHT FEE INCREASE ON JUKEBOX OWNERS 13. RECORD MAKERS UNIT SALES PER RELEASE AND BREAKEVEN POINTS (1972) 122 Page 161 161 161 163 163 163 SUMMARY EXHIBITS For data supporting material in the "Summary Statement", see the appropriate sections in the full statement (pp. 33-118) and in this Technical Appendix. This exhibit summarizes the conclusions of the full statement. The basis for the finding that copyright owners' income has outpaced inflation is provided in Section I.B. of the full statement, pp. 37 to 43. The impacts of an increased statutory rate are spelled out in Section II.A. to II.D. of the full statement, pp. 56 to 81. Exhibit B Price Per Tune is Down; Copyright Owners' Share is Up This conclusion is based on Exhibit 1, p. 36. It should be noted that the price per tune received by record companies has declined in current dollars since 1909, even though today's product is far superior in quality. Exhibit C - Mechanical Royalties Have More Than Doubled The data in this exhibit are based upon Exhibit 3 in the main report, 5". Exhibit D Mechanical Royalties Outpace Inflation and These data are also based on Exhibit 3 in the main report, p. 39. Data pertaining to the Consumer Price Index and Median Family Income are from the Statistical Abstract of the United States. Exhibit E- Mechanical Royalties Paid Per Released Tune These data are based upon the analysis in Exhibit 4 of the main report, p. 43. The assumptions behind the exhibit are discussed later in this technical appendix under "Exhibit 4". 123 |