126 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 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 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 or $15 8 million was estimated to be attributable to commercially • Of $47.8 million (FCC figures) in music license fees paid by TV • Of $19.4 million in ASCAP receipts in 1973 due to nonbroadcast • Finally, it was estimated that MI and SESAC together also were 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 royalties paid. Thus the figure of $83 million for mechanical royalties paid in 1974 is a highly reliable 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 Cambridge Research Institute, Cambridge, Massachusetts 1973 and 1974 Statistics on Mechanical Fees Paid by the 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. 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 J. K Lasser & Company, 666 Fifth Avenue, New York, As you will notice, your forms have been pre coded with The financial data you send to the accountants will be reporting forms will be destroyed. 128 Only financial statistics on record and tape operations in the Company Code Number 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. 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. 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 130 |