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Artists will NOT cease to exist because of downloading.
Get rid of cds and dvds and there will be just as many artists and movie studios.
Get rid of distribution, get rid of pimple faced sales staff and get rid of the overpricing of paying for a whole CD to get one good song.
Bands make a minimal cut from the sales of cds itself. Even a big band like Metallica only makes 10-15% off sales. A newer artist is lucky to make 5%. The rest goes to distribution and all other parts of the industry it passes through to reach you. From the initial injection moulding of the plastic disk to the store cash register. The labels only end up with enough to cover legal matters and repaying a loan the label has given to each artist to record the music in the end.
Downloading could be more profitable for the industry as a whole if they got rid of the physical cds and dvds. The bands make money off tours and OTHER tangable merchandise like t-shirts, hats mugs, advertising etc etc.
Labels make money off advertising and a cut from the other tangable goods as well.
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