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FULL STATEMENT EXHIBITS

This section of the Technical Appendix documents in detail the sources and methodology for the exhibits in the full statement, pp. 33-118.

Exhibit 1 STATUTORY LICENSE ROYALTIES AND RECORD
COMPANY PRIULS. 1909 vs. 1974

Sources for the price information cited in the exhibit are given in the footnotes to the exhibit. The financial survey cited in footnote "b" is explained in detail later in this appendix under "Exhibit 5".

Exhibits 23. INCOME TO COPYRIGHT OWNERS FROM
Morules, 1973 vs. 1963

The data relating to mechanical royalties are explained in the "Sources" section at the bottom of Exhibit 3. The two CRI surveys that provided raw data are briefly described in footnote "a" of Exhibit 3, and are more completely discussed later in this appendix under "Exhibit S".

Copyright owners' performance fee income from recordings was estimated as

• Of $17 5 million (FCC figures) in music license fees paid by
radio stations and networks to copyright owners in 1973, 90%

or $15 8 million was estimated to be attributable to commercially
produced sound recordings,

• Of $47.8 million (FCC figures) in music license fees paid by TV
stations and networks in 1973 to copyright owners, 101 or $4.8
million was conservatively estimated to be due to the use of
Bound recordings,

• Of $19.4 million in ASCAP receipts in 1973 due to nonbroadcast
general and background music, live symphonic and concert music,
and royalties from foreign societies, 201 or $3 9 million was
estimated to be due to commercially produced recordings.

• Finally, it was estimated that MI and SESAC together also were
accountable for about half of the ASCAP total for background
music in 1973, or about £ 9 mil. a

These estimates sum to $44.4 million in copyright owners' income from performance fees attributable to sound recordings, an increase of 283% over the level of 1963, as reported in the 1965 Glover Statement.

In terms of the estimated mechanical royalties, it will be noted in footnotes "a" and "b" of Exhibit 3 that there are two estimates provided. The footnotes indicate that the two estimates are from different surveys, and it explains our rules for the use of each. The lower estimate ($77 million in 1973 and $79 million in 1974) is from a lengthy financial survey which was first conducted by CRI in 1973 and later updated in 1974 and 1975. It is discussed in detail below under the notes to Exhibit 5. The higher estimate is from a short, special 34-company survey which CRI conducted in 1975 in order to obtain the most recent information on mechanical royalties paid. It was conducted as follows:

A two-question survey was sent to 96 record companies

in early 1975. The companies comprised all those member
firms of the Recording Industry Association of America
plus an approximately equal number of presumed prospective
members. Thirty-four companies responded. Those who did
not respond did so for a variety of reasons -- some were
no longer in business, others had merged or had been
acquired, and many were inactive and had no sales during
the period. When compared with RIAA industry sales esti-
mates, it appeared that the 34 respondents represented
close to 981 of industry sales and hence, mechanical

royalties paid. Thus the figure of $83 million for

mechanical royalties paid in 1974 is a highly reliable
number.

On the next four pages following, the memorandum introducing the short survey, the one-page questionnaire, the names of the respondent firms, and the raw survey results are provided.

12

MEMORANDUM

December 2, 1974

ΤΟ

Record Companies

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Cambridge Research Institute, Cambridge, Massachusetts
Telephone: (617, 492-3800

1973 and 1974 Statistics on Mechanical Fees Paid by the
U.S. Record Industry

During recent Senate hearings on the Copyright Revision Bill, questions were raised about the total amount of mechanical fees paid by the record industry. In order to illustrate the severe impact on the record industry of raising mechanical fees from 20 (under existing copyright law to 3 (under the copyright bill passed by the Senate in September 1974), there is an urgent need to collect statistics on the mechanical fees paid by as many record compan.es as possible. Could you, therefore, please fill in the attached questionnaire and by "anuary 15.

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The following procedure has been established so your company's for an al data will be handled in a confidential manner

After you have completed the enclosed form keep one copy
for your files and send one copy to the UPA firm of

J. K Lasser & Company, 666 Fifth Avenue, New York,
New York 15019. (You may use the preaddressed envelope
that is enclosed.)

As you will notice, your forms have been pre coded with
a company number known only to Cambridge Research
Institute, The CPA firm of 2. K. Lasser & Company will
not know the name of your company. In this way, your
company name will not be associated with your financial
data.

The financial data you send to the accountants will be
combined with data from other firma, which will prevent
disclosure of individual company informat on.

reporting forms will be destroyed.

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Only financial statistics on record and tape operations in the
United States should be supplied.

Company

Code Number

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These figures can be estimates if necessary, but please indicate if they are.

PLEASE MAIL THIS INFORMATION BY JANUARY 15, 1975.

Record Companies Which Responded to the Questionnaire Entitled

"RIAA SURVEY OF MECHANICAL FEES

PAID BY RECORD COMPANIES IN 1973 and 1974"

ABC/Dunhill Records

Alshire International, Inc.

A & M Records, Inc.
Ansonia Records

Arista Records

Atlantic Recording Corp.

Bee Gee Records

Buddah Records

Capitol Records, Inc.

Challenge Records

Cinnimon, c/o Goldband Records

Columbia/Records Group

Disneyland/Vista Records

Elektra/Asylum/Nonesuch Records

GNP Crescendo Records

GRT Corporation

Hickory Records, Inc.

Icka-Delick-Music & Records Corp.
London Records

Longines-Symphonette Recording Society

MCA Records, Inc.

Mill City Records

Nashboro Records

Phonogram, Inc.

Pickwick International, Inc.

Polydor, Inc.

RCA Records

Savoy Records, Inc.

Sussex Records

20th Century Records

United Artists Music & Records Group, Inc.

Thomas J. Valentino, Inc.

Warner Bros. Records

Word Records

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