This would create an incentive for new groups to say "to hell with signing with a record label". Just put their stuff up on Napster, or their own web site. Put up samples for free, put up CD for sale, price the CD dirt cheap since the label and the music store aren't getting a cut, and use their recorded music as a draw for their touring performances
Soon, the record labels would go bust. This is what really worries them about file-sharing
They tried to defeat it with the latest Celine Deion CD and their vaunted "copy-protection software". That was fine until someone with a $0.99 Sharpie defeated it. Reports are, the next generation copy-protection system has already been hacked. Supply and demand will rule the day...as it always does.
Did anybody here know that it actually is more expensive to produce a cassette tape than a CD? It is true. The consumers are being gouged, and intuitively know it. The record industry did promise that the high prices of CDs would drop once the investment in CD technology was payed for in a few years. That promise was as faithful as Bill Clinton's wedding vows.
The artists are actually losing money sometimes when they sell 1 million, because of the egregious contracts they sign with the record companies. If they didn't make money on tour, some well known artists would literally be bankrupt.
The whole industry is a waste. Radio used to be what drove the industry. Except now, Clear Channel, and Infinity own about all the market, and they only put on drivel, that is given to them, that they play because of payola.
You can not force people over 25 to buy N'sync albums. It just won't happen. Talented artists before actually could get a record playing at one station, in one market, at one independent station, and it could spread like wildfire. Those days are over in radio. MP3 sharing is the only way a non bubblegum corporate act is going to get heard these days.
But RIAA says it is all Napster's fault. I am incredibly ticked off at this AP writer for putting out their position with no counterpoint. You are in a recession, and the music stinks, but it is all college kids on computer's fault that sales are down 7%. This is a pathetic piece of journalism.