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iii.

16. 17.

See Note 3.
S. Rep't 93-983, 1974, p. 148.

(Emphasis added.)

18.

See Prof. Glover's testimony, for example, on pp. 819,
824, 889, 901, 822, 816, 777, 810 and 773 of the June
1965 Hearings before the House Judiciary Subcommittee
on Copyright. Prof. Glover also warned that increas-
ing the mechanical rate ceiling might require a
reduction in the number of songs per album. The ceil-
ing has not been raised but the reduction (from 12 to
10) occurred anyway, thereby increasing the record
company's price per song and decreasing the composer's
royalty per album,

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*Billboard 1967-68 International Record Survey, pp. 10-11
**Record World, June 7, 1975, p. 3.

while much of the analysis contained in this statement relies
necessarily on published list prices, the age-old prevalence
of discounts at the retail level does not alter the conclusions
drawn therefrom, ina smuch as it is the relative change in prices
over the last 10 years that matters and there is no evidence
that the ratio of realized actual retail prices to list prices
has declined. On the contrary, there is reason to believe that
they have risen in the last ten years, thus signifying an even
larger effective price per selection increase than the 110%
cited in the text.

20.

See Mr. Davis's testimony, pp. 515-516, March 21, 1967
Senate Judiciary Subcommittee Hearings.

21.

CLIVE, INSIDE THE RECORD BUSINESS by Clive Davis with James Willwerth, William Morrow & Company, Inc., 1974. The $3.79 and $ 4.79 price references differ from the $3.98 and $4.98 figures noted above by virtue of the then applicable excise tax. When this tax was repealed, however, the industry kept the price at the same level and pocketed the 19€ per record instead of passing this savings on to the consumer.

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iv.

23.

Billboard, March 9, 1974, p. 4.

24. Billboard, February 1, 1975, p. 3; See also Billboard,

August 17, 1974, p. 8: "... the record tape industry is
recession-proof." See also New York Times, July 23,
1975: "even in a recession, there are huge profits to
be made in recorded music..." "There's nothing like
the record business,' said Marshall Blonstein, a vice
president of Ode Records:

'People talk about big hits in the movies...
You know how much it costs to produce a
record? - about $40,000, and you can make
millions."

25. Billboard, April 5, 1975, p. 4.
26. Billboard, July 6, 1974, p. 4. See Transcript of testimony

of Joseph B. Smith in u.s. v. Taxe et al.
In truth even this understates the record company's
profit and overstates the music composers' and publishers'
income because the current prevailing tape price is
$7.98, not $6.98, and, as shown above, the royalty rate
of the majority of selections is below the 2¢ ceiling.
The New York Times also estimates a much higher gross
profit margin. Op. cit. supra, Note 24.

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a/ Projected. Source: Monthly Labor Review, September 1975.

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