Originally Posted by FJRabon
1) Record labels are many things, but making piles of cash is not one fo them. To the people who think that the record labels are a big scam, no, they are making next to nothing right now. You can make the argument that they're inefficient at what they do, especially in this day and age, they're not ripping artists off. Record labels absorb losses on artists far more often than they make profits. They're just hoping that they find that oen big gold mine artist that can support all the other artists who cost the label more than they make.
Many companies do not want to turn a profit, they'd rather pay themselves that money than pay it in taxes. I've owned a few companies and at the end of the fiscal year we'd always invest that money, pay it in bonuses or buy new computers so that, on paper, it looks like we made little to no money, and if we can show a loss we'd get tax returns. These are typical corporate loop-holes, almost every tax preparer recommends that, that's why McCains claim that America's corporations are required to pay 30% in taxes is total BS, I've never worked at or owned a company that payed more than 12% in taxes.
Record companies make a butt load of money and are notorious for ripping off their golden geese, just watch the Documentary for Richie Rich.
Having your music played on a radio station is a two-way street... many record labels own radio stations and radio stations make their money from commercials and not from record companies.
Concerts, T shirts, etc turn big profits. And now with the lack of printed material, plastic packaging, and the risk of large quantities of inventory being wasted, is over. With the internet there is no more stock control, only bandwidth which is sold per GB.
I don't buy your theory one bit...