Economics of MP3 downloads examined

Where does the money go when you purchase a track from one of the various online music vendors? Business 2.0 breaks it down. Even with digital downloads, artists are only getting a 12% cut. The real surprise is the actual download sites themselves, which can take up to 40% of the pot—more than even the labels.

That download sites are taking such a large cut of the action makes me suspect that the labels and RIAA may be less to blame for high music prices than many have suggested. Could it be that retailers are at fault, too?

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