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Arial Billboard Surveys; Record World, June 7, 1975

Sources Summary Table

(1) Consumer Price Index (CPI) for July 1975, U.S. Department
of Labor.

(2) The value for 1975 was obtained by multiplying 2.5¢ by 0.582, the ratio of the CPI for 1965 to the CPI for July 1975. (3) The value for 1975 was obtained by multiplying 2.5¢ by 1.717, the ratio of the CPI for July 1975 to the CPI for 1965. (4) For current dollar figure, survey by Robert R. Nathan Associates of royalty payments made through the Harry Fox Agency in the fourth quarter of 1974. This survey covered the sale of 145 million recorded songs. survey for the second quarter of 1965, which covered 32 million The 1965 figure is based on a similar songs. The 1975 survey included the twenty largest publishers for each of the three largest record companies. 1975 in 1965 dollars was obtained by multiplying 1.62 by 0.612, the ratio of the average CPI for the second quarter of 1965 to the average CPI for the fourth quarter of 1974.

The value for

(5) Contract scale of American Federation of Musicians (Local 802, New York).

(6) As reported by the Federal Pay Advisory Commission.

(7) Prices of the top 200 best selling albums as reported in Billboard, the industry trade journal, for May 5, 1965, and January 4, 1975. It should be noted that the price of a typical tape in January 1975 was $7.98. Tapes account for about 30 percent of the total sales of all recordings, thus the average price per recording is more than $7.25.

(8) Based on a count of songs on the best selling albums listed

in Billboard.

(9) Column (7) divided by column (8).

For 1974:

Record World,

(10) 2.5¢ divided by column (9).
(11) Values are for 1964 and 1974.
June 7, 1975, page 3. For 1964: Billboard 1972-73 International
Music-Record Directory, page 9.

(12) Values are for 1964 and 1974.
Industry Association of America in material submitted to Congress.
As stated by the Recording
RIAA also alleges that royalty payments totalled $77.1 million in
1973. However, it appears that the RIAA data overstate total
royalty payments for the following reasons:

a) in the 1974-75 International Music-Record Directory, Billboard made the following estimates for 1973:

292 Fillion record albums and tapes sold

193 million single records sold

With 10 songs per album or tape, 2 songs per single record, and a maximum royalty of 20 per song:

$58.4 million maximum royalties on albums and tapes

$ 7.7 million maximum royalties on single records
$66.1 million maximin rajalties

Thas even if all royalties were paid at the ceiling rate (which
they are not, as shown in (4), total payments could not have

amounted to more than $66.1 million in 1973, or $11 million less than the RIAA figure.

b: in their news release about 1974 sales (Record World, June 7, 1975) the RIAA indicated that the total dollar volume of renrding sales rose by more than 9 percent in 1974, but that the number of units sold decreased as a result of the sharp rise in ter prices. Because royalties depend on the number of units A.d, not on the total dollar volume, total royalty payments wuld have fallen in 1974, not risen by 8.3 percent as alleged by the RIAA. The data for 1974 show the obvious fallacy in the RIAA arrument that composers and publishers have benefitted greatly from the increase in the dollar volume of record and tape sales. Much of this increase, especially in recent years, has been the res.it of higher prices, not of an increase in the number of writs sold.

Combined author, composer, and lyricist dues-paying, workbished memberships of American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music Incorporated (BMI), on. June 10, 1965 and June 24, 1975.

14

For the values in current dollars, column (11) multiplied by _an (12) divided by column (13). The value for 1975 in 1965 ars was obtained by multiplying $2,362 by 0.582, as in (2). 15. Por 2.50 in 1965, from column (10). For 4.00 in 1975, aned by multiplying 40 by 10 (songs per album), and dividing by $6.98.

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Por 4.00 in 1975, obtained by multiplying 40 by 0.582, as in

15¢ divided by $6.98.

15e divided by $3.00 ($6.98 minus $3.98).

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