Unrecoupable Flat Payments to Artists

(Any special lump sum or flat or bonus payments to
the artist which are unrecoupable and unrelated to
direct sales performance.)

AFTRA Payments

(All payments to the trustees of this fund, including the
U.S. Trust Company portion.)

Purchased or Leased Masters

(In some instances, record companies purchase or lease
masters produced by others, often by independent A&R men.
The total cost of any purchased or leased masters, including
royalties, if any, should be included in this account.)

Art Department Costs

(This is the cost of an in-house art department, or fees
paid for outside art services (directly or through a
producer) for use on album jackets or any other related
art work.)

139

of J.K. Lasser and Co. In this manner, full responses were received f 13 firms. As spelled out in Exhibit 5-D in the main report, these 13: represented 16 of the 19 firms in the Glover report of 1965, as three merged in the interim period. This overlap provides acceptable reliabi for year-to-year comparisons.

The questionnaire itself was designed with great care, in consulta with financial executives of various recording firms. In this way, it was assured that proper financial categories and definitions were emplo and that the questions asked could be answered. The questionnaire was to the one employed for the survey reported in the 1965 Glover report.

Representativeness of the Sample

For years 1967 to 1974, inclusive, financial survey data was provi as follows:

All 13 companies reporting for years 1971-74 were unable to report the full period 1967-74 because some were not in business for the full p some did not maintain the requisite historical data; and still others we participants in mergers and acquisitions rendering historical data misleading or unavailable.

The survey encompasses firms which account for a low of 43.0% of in dustry sales in 1968 and a high of 63.8% in 1974. Such large sample siz works to make sample results representative of the universe even when th sample is not known to be random in a scientific sense, as is the case h Moreover, the data presented are as representative as it was possible to obtain.

Thoroughness of the Survey

The survey, as conducted, is the most thorough and comprehensive study of the financial condition of the recording industry that has ever been und taken (with the exception of the earlier survey we conducted for the 1965 hearings) or that is available from any source.

The materials associated with this lengthy financial survey are provid in the following pages in four parts:

PART III: The 1974 Update of the Survey - Questionnaire

Forms.

PART IV: Consolidated Financial Statement of the

Surveyed Companies.