value of mechanical royalties paid in one year by the number of releases It should be noted and emphasized that these domestic mechanical We shall now turn to an examination of what has brought about the tremendous increases in incomes of copyright owners from recorded music. 42 Note: For this Exhibit, the year 1972 was used because it was the latest year for which the numbers and releases were available. Statistics on releases are from 311 board. The 1.25 tunes per 2 was calculated is follows In 1963, there were spprox- 43 I THE HIGH INCOME ENJOYED BY COPYRIGHT OWNERS (CONT'D.) C. THE MUSIC PUBLISHING INDUSTRY HAS NOT ONLY BEATEN INFLATION BY In order to reach an informed, not to say a fair judgment concerning the statutory mechanical royalty rate and whether it should be increased, one really must recognize and take under advisement some basic facts as to The tature and attraction of modern-day recorded music and the economics of the recording industry Teen from our present-day perspecti •, the recordings of 1959 -. when Congress thought it fair that copyright owners should get as much sa le per recorded "une -- seen naive and quaint, both artistically and toita..y Recordings were made mechanically through an inverted begaphone and the this and scratchy results were physically pressed 25 "var" fisc, me tune her disc. or a mechanical reprobate 44 I. THE HIGH INCOME ENJOYED BY COPYRIGHT OWNERS (Cont'd.) B. THE INCOME PROVIDED TO THE MUSIC PUBLISHING INDUSTRY FROM RECORDINGS The income provided to the music publishing industry by recordings -- Not only is the share of revenues from the sale of recordings that goes to publishing companies and other copyright owners much greater than originally visualized by Congress, but their dollar incomes from recordings have, in fact, increased very much faster than inflation. 1. Inflation in the Decade 1963 and 1973 Between 1963 and 1973, the average annual Consumer Price Index, based on the year 1967, rose from 91.7 to 133.1, an increase of 45%.* In those years, Median Family Income, that level of income where 501 of American Families have more and 50% have less, and which takes into account both dollar inflation and increases in real income besides, rose from $6,265 in 1963 to $12,051 in 1973, an increase of 921. How did the American music publishing industry fare in comparison, as between those years? Let us examine what happened to each of the several kinds of income that copyright owners derive from recordings. The following facts are set forth in Exhibits and 3.** • See 1974 Statistical Abstract of the hited States. ** The year 1973 was used a this connection, being the latest ear for 37 |