Everyone is naked in the music industry's hamam

The arrest of Guruji.com executives (as explained in the previous post here) and the question of piracy is very dicey. Especially, when there are only a few legal precedents in India. From what I hear, everyone is naked in the hamam of music industry. Imao, the record companies are not so innocent either.

Some music companies deliberately allow their music to be pirated so that its fan base improves and the song becomes an instant hit. Then they sell associated merchandise (like ring back tones) and make money out of it. That Audio CDs are passe is common knowledge. That real money lies in digital sales of a new kind is known to many.

Here's how: If one person makes a song a ring back tone, the record company makes approximately Rs 8. The FM companies also pay Rs 4-5 per play for a song. I need not wax lyrical about the penetration of mobile phones in India do I? Also let me leave the math to you. The new revenue model, even if one goes by conservative estimates, should be fairly successful. All this (the arrest and all) is most likely hogwash or perhaps the decision of a greedy top management.

The artists, directors, lyricists-- all get screwed, because, according to the contract, they are not entitled to royalty/ a dime, on merchandise. So before anyone begins moralizing on piracy and associated BS, they should come clean themselves.