File sharing benefits record companies.:
The CBC provides this interesting breakdown:Where does the money go when I buy a CD?
Larry takes the position that with filesharing obviates the need for the costs associated with manufacturing, retailing, promotion, and marketing. I’m not sure that would hold up in reality, but it does point out how little the artists are “losing” with their share of the take at less than 1/8th.
| retailer profit | 4% |
| label profit | 7% |
| manufacturing costs | 9% |
| artist and songwriting payments | 12% |
| record company distribution, sales & overhead costs | 12% |
| promotion and marketing costs | 13% |
| recording, video and production costs | 19% |
| retail store costs | 24% |