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factor of 28 percent (see Table 1), and "popularity" factors as defined in the TPT proposal. We have employed the term * copyright qualifying" broadcast signals as defined on page 10.' Application of the formula with these components to the remaining 78 copyright qualifying' systems results in a copyright liability of 2.35 percent of the revenues of the subject systems, or 13.2 cents per subscriber per month. These data are presented in summary form by system revenue classification in Table iv. Examination of the data in Columns (5) and (6) indicates that copyright liability impacts unevenly according to revenue classification. In some cases copyright liability falls with greater impact on lower revenue classes. For example, the greatest impact is on TPT systems in the $160,000-$320,000 annual revenue class, an effective rate of 2.61 percent of revenues, or 14.9 cents per subscriber per month, as compared with impacts of 2.42 percent and 13.4 cents per subscriber per month for the largest TPT systems--those in the over $640,000 annual revenue class. Copyright liability is determined system by system and is a function of the

Note that the 28 percent figure is based on total broadcast revenues which has the effect of reducing copyright payments.

To give proper weight to copyright qualifying non-network programming of network affiliated stations, we have applied a factor of 40 percent to the market share percentage of viewing hours obtained by such stations. Estimate is based on A. C. Nielsen Co., Nielsen National TV Ratings, NT I Nielsen Television Index, which was provided by an MPAA member firm.

1988

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"copyright qualification" and "popularity" aspects of the proposal. These features of the proposal also suggest that the geographic location of cable systems would be an important determinant of the degree to which they would be liable for copyright payments. As noted above, the impact of TPT', proposal is likely to fall most heavily upon those systems which, due to the unavailability of local signals, necessarily will depend more heavily upon the carriage of distant signals. (See Table VI.) Tables IV-A through IV-E present the data for individual TPT systems in each of the five revenue classifications.

sed pattern persists in all intermediate revenue

cases the ballest relative difference occurs in the

pas syitens vith annual revenues in excess of $640,000. marble figures for this class of TPT systems is 1.88

**: ad 11.2 cents under H.R. 2223 and 2.42 percent and - Ata nder the 8P7 proposal. (It is also significant to

IX. COMPARATIVE FEE IMPACT OF H.R. 2223 AND PROPOSAL ON

TELEPROMPTER SYSTEMS

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Table V presents a side-by-side comparison o! copyright liability under the provisions of H.R. 2223 and the TPT proposal. This brings together the data from Tables 11 and IV in summary fashion. As indicated therein, the real significance of the TPT proposal lies in comparing its effects on the various revenue classifications of systems. For the 142 systems under the H.R. 2223 fee schedule, the copyright tee impact is 1.48 percent, or 8.6 cents per subscriber per month. The comparable figures for the 78 systems liable for copyright fees under the TPT proposal are 2.35 percent and 1).2 cents. Reviewing the data for each revenue classification indicates higher fee impact under the TPT proposal for systems in all revenue classes which renain liable (but somewhat higher

PL, 54 systems which remain liable bear a liability of

-3, e average of $6,126 per system. The only reduction * . doilar liability occurs in the over $640,000 Sretan cians, and the difference is over $250,000 in fees as

c . B.R. 2223.)

Table V also presents what would appear to be the a name of the 777 proposal, which is total copyright * ritens liable under the proposal (a) as a

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impact on systems in the lower revenue classes). For the 17 liable systems in the under $160,000 annual revenue class, the fee figures are 1.82 percent of revenues and 10.2 cents per subscriber per month under the TPT proposal, as compared with 0.50 percent and 2.6 cents per subscriber per month under H.R. 2223. This pattern persists in all intermediate revenue classes. The smallest relative difference occurs in the largest systems with annual revenues in excess of $640,000. The comparable figures for this class of TPT systems is 1.88 percent and 11.2 cents under H.R. 2223 and 2.42 percent and 13.4 cents under the TPT proposal. (It is also significant to note that all revenue classes of systems, other than the highest, experience net increases in absolute dollar liability, despite a substantial reduction in the number of systems liable for payment under the TPT proposal. For example, the data in Tables II and IV indicate that in all revenue classes under $640,000, 109 TPT systems have a liability of $238,672, an average of $2,190 per system under H.R. 2223. Under TPT's proposal, 58 systems which remain liable bear a liability of $355,329, an average of $6,126 per system. The only reduction in absolute dollar liability occurs in the over $640,000 revenue class, and the difference is over $250,000 in fees as compared with H.R. 2223.)

Table V also presents what would appear to be the "bottom line" of the TPT proposal, which is total copyright fees for TPT systems liable under the proposal (a) as a

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percentage of total TPT system subscriber revenues, and (b)

PROGRAM EXPENSE AS A PERCENT OF REVENUE POR ALL TELEVISION STATIONS

BY TYPE OF REVENUE

per subscriber per month. What emerges is an effective rate for all systems of 1.28 percent and 7.5 cents per subscriber

per month under the proposal versus 1.48 percent and 8.6 cents

per subscriber per month under H.R. 2223. Again, all revenue classes of systems, other than the largest group, experience higher effective rates under the proposal than those which result under H.R. 2223. Only the largest systems experience a net reduction in effective rates under the proposal, from 1.88 percent and 11.2 cents per subscriber per month to 1.28 percent and 7.6 cents per subscriber per month.

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Total Broadcast Revenue less commissions to agencies,
representatives and brokers and less cash discounts."
Derived from Total Broadcast Revenue less sale of
station time to networks.
Derived from Net Broadcast Revenue less sale of
station time to networks.

Source:

Federal Communications Commission, Public
Notice No. 54455, September 8, 1975, "TV
Broadcast Financial Data--1974,"Table 5.

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