In a nutshell, this comment at the end of a story about royalty rates on digital sales explains how far removed from reality the record labels are:

Israelite said he opposed any attempt by companies like Apple and its record label allies to do away with the fixed royalty rate. "Apple may want to sell songs cheaply to sell iPods," he said. "We don't make a penny on the sale of an iPod."

I have a simple explanation for that bozo: he doesn't get a penny for iPod sales because the leaches he represents didn't invent the iPod, and they don't sell the iPod. He expects, to quote a Dire Straits song, "Money for Nothing".