Only financial statistics on record and tape operations in the These figures can be estimates if necessary, but please indicate if they are. PLEASE MAIL THIS INFORMATION BY JANUARY 15, 1975. Exhibit 4 -- STATUTORY MECHANICAL ROYALTIES PAID PER RELEASE Exhibit 4 represents an attempt to estimate the mechanical royalties Exhibit 5 -- ESTIMATED FINANCIAL STATISTICS AND INCOME Data presented in Exhibits SA, 5B, SC and 5D are based on a lengthy financial survey of recording companies which CRI conducted in 1973 and then updated in 1974 and 1975. The survey represents an important source of statistical information on the recording industry used in the full statement, and was conducted as described below. Design of the Sample The survey was distributed among all 55 member firms of the Recording Industry Association of America in 1973. It was determined in advance that limiting the survey to these firms was the most appropriate and convenient way of assuring cooperation of the respondent firms within the constraints of time and funds available. CRI encouraged as many of these member firms as possible to respond to the lengthy questionnaire, under the assurance that individual company responses would be strictly confidential. Indeed, CRI itself was not privy to individual questionnaires; the results were tabulated by the CPA firm 132 of J.K. Lasser and Co. In this manner, full responses were received from 13 firms. As spelled out in Exhibit 5-D in the main report, these 13 firms represented 16 of the 19 firms in the Glover report of 1965, as three had merged in the interim period. This overlap provides acceptable reliability for year-to-year comparisons. care, in consultation The questionnaire itself was designed with great was assured that proper financial categories and definitions were employed, Representativeness of the Sample For years 1967 to 1974, inclusive, financial survey data was provided, as follows: All 13 companies reporting for years 1971-74 were unable to report for the full period 1967-74 because some were not in business for the full period; some did not maintain the requisite historical data; and still others were participants in mergers and acquisitions rendering historical data misleading or unavailable. The survey encompasses firms which account for a low of 43.0% of industry sales in 1968 and a high of 63.8% in 1974. Such large sample size works to make sample results representative of the universe even when the sample is not known to be random in a scientific sense, as is the case here. Moreover, the data presented are as representative as it was possible to obtain. 133 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 undertaken (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 provided in the following pages in four parts: 134 FROM: Cambridge Research Institute, Cambridge, Massachusetts SUBJECT: Instructions for Completing Financial Reporting Forms The purpose of gathering financial data from your firm and others is to develop a detailed financial picture of the record and tape manufacturing industry as a basis for analyzing the economic effects of proposed changes in the copyright law. This analysis will be presented during Congressional hearings concerning the copyright law. In order to prepare properly for hearings in mid-March, we need these forms to be completed and returned by February 9th. Many companies participated in a similar survey in 1965, preparatory to Congressional hearings at that time. The following procedure has been established so your company financial data will be handled in a confidential manner: 1. 2. 3. After you have completed the enclosed forms, keep one As you will notice, your forms have been pre-coded The financial data you send to the accountants will be 135 |