In defense of the record industry. I know a lot of people like to bash the record companies as greedy bastards, while some of this is justified most of it isn't. People look at the cost of a CD and think they are too high because it is significantly higher than the cost of manufacturing of the CD's. That is very true, but a lot more money goes into bringing a CD out than just manufacturing, the biggest cost aside from the actual recording of the music is promotion. It cost a lot of money to promote CD's - videos and radio airplay don't come cheap. You may be surprised to know that 90% of CD's lose money for the record companies, it is the really successful 10% of CD's that generate the profits for record companies and offset the loses for the other 90%. So the success of Eminem allows Universal records to put out CD's by lesser-known rock artists. So he does serve a good purpose after all. Plus lets not forget that record companies are businesses, they are in this to make money like any business. Sure a lot of artists get screwed by one sided contracts, but in reality the terms offered today are a lot better for the artists than they have been in the past, so things are improving. 

There does remain a lot of flaws in the way that the record industry conducts business and they have to this point been reluctant to utilize the full potential of the internet, a medium that could revolutionize the industry and ultimately bring in more money for the Record companies, but to this point they have been fighting the changing landscape and confusing the issue by misrepresenting the facts doesn't help their case. If anything Napster helps the record companies because it exposes music to fans that isn't getting played on radio and MTV, so they save on the cost of promotion. The biggest fear for record companies seems to be that the internet will make it so artists will no longer need them. In that scenario the artists would take their music directly to the fans. That is conceivable, but the artists would still need to be marketed so that fans will know about the music in the first place and at this point this only benefits the well known artists who already have name recognition and large fan base. Smaller bands will still need the big corporation and it's resources for exposure, so if the 10% of artists that do generate revenue for the record companies do decide to go out on their own, it will in fact hurt the smaller artists because the record companies will not have the money from the best selling 10% to promote the lesser known artists. That is a scary proposition because in most cases it does take the power and influence of a major label to bring a band to a mass audience. Nirvana is a great example of this, it wasn't until they had a label like Geffen behind them that they were able to break through to a mass audience.  If new bands don't have the opportunity of success that a major label offers them, they may decide it isn't worth it and we all will loose out in the end. The bottom line is the record companies need to wake up to the reality of the online world and embrace it, they may kill Napster but they won't be able to stop music from being traded online. And if they don't take the steps now to become part of the online revolution it may indeed be their downfall. 

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