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Exhibit S, cont.
Pare B: Wholesale Prices, Titles Released. Units Sold, Number of Employees
STATEMENT O RECORDING CERVANTES SURVEYED N at sa 1971, 1993, and 1974
the figures here are cely for the us operations of the record sumpains surveyed
11 6 - STATUTURY LICEYCE ROYALTIES PER TOP ISO LP ALBUMS
Dis exhibit, together with the discussion on pages 56 and 57 is fairly w:( evp:anatory Nevertheless, it is important that the derivation of the 50 pre be completely understood.
The calculation is based on a sample of the top 150 of the "Top 200** Daibum frue B::hard, March 3, 1993; these albums accounted for 165 LP record", de son altas contained two records) and 1,653 tunes. The
roer of tutes per record was counted, and playing times were measured, 18 by mas, clearly is not a sample of all recordings. Tapes and 6.94:ver. 1:1de! There would be some releases on singles which did not appear on is, but there would be virtually no tape releases which did 6.4 met uime out on LP's or singles Probably, the tor 150 would be repre*!** of the majority of Us sales, but they are not statistically tur******* of total US releases or sales
for pro of calculation, it was assumed that each of the tures in ht!! was at the statutuny shanical royalty rate. In fact, she nas ne bere at han er rate, some at a lower rate, and there could have be 18 led me public domain tunes at 04 Most likely, there was little The 10 dana in material included. it does not "sell **
la $441tion, the current general (but not universal) practice of paying 141..mal royalty of Vie per minute of playing time over five minutes wu.' d in the calculation of 22€ as the averago mechanical royalty per ****nder th. 11. law and present practice. That would take care of tle tae that were over 20.
There was then calculated what the mechanical royally would be under 1 :1), twn by tune, applying the proposed statutory provisions to the late tut per record and playing times. The result of this calculation w average rechanical royalty of 35€ per record,
The increase from 24 to $¢ is $91, as reported. *er or not any of the im je i samp!• #tally were licensed at ten than it, aus.ne
probably were, is imematerial to the calculation of the 598. The calculation
If we had not taken account of the current practice of paying 1/2€ per minute over five minutes, the percentage increase shown would be greater than 591. As it is, since as we understand this playing time practice is not universal, probably we are slightly understating the percentage increase of
As to the fact that singles were excluded from the sample, two points are in order. First, their exclusion tends, if anything, to understate what the calculated percentage increase (598) would be were they to be included in the sample. This is so because there is only one tune per side on a single, on an LP, a longer band (incurring the playing time provision of H.R. 2223) subtracts from the playing time available for other bands on the same side. Second, LP's • taken by themselves . constitute a large and significant portion of total unit sales of recordings. We do not know precisely what portion, but we do know that LP's accounted for about 621 of dollar sales in 1974.
Were tapes to have been included in the sample, the results probably would have been little different. Tunes released are essentially the sase as those on records (LP's in the rain, we understand). And, far fever licenses on tape are at less than 2¢, we are told; the mechanical royalty rate, tune by tune, otherwise is very similar to, or exactly the same as, the rate for Lp's.
Note that 1993 data were employed. The results could be somewhat different it 1994 data were examined.
Lahibit 7. FINANCIAL IMPACTS F PROPOSED IN RASTO MEHANICAL
This exhibit applies the $94 figure developed in Exhibit 6 to total mechanical royalties paid during the four-year period, 19*1-1984. Totals