The industry sells millions of their CD s, takes the money, and gives these performers a small royalty. Most of the industry s CD s do not make much money. The strategy is to lock in one performer who, through unforeseen free market forces, subsequently makes it big. Not many ever do. Napster and competing technologies threaten to undermine this arrangement.
Most pop music has a very short half life.
Napster threatens to cut deeply into the sales of these short-term monster hits. It can match supply with demand at zero monetary price. The music industry will make a few performers famous, only to see its income streams siphoned off by the consumers sharing of digits. There is not much that the industry can do about this. On the whole, this will be beneficial for most of those performers who gain favor with the public.