Quoted from the story:
"If a CD sells for $13, a record company takes in about $8, of which it deducts artist, publishing royalties and manufacturing, promotional and marketing costs"
Not necessarily true, i worked in a music department for a chain (the wiz) for a while, and the receipts always stated the actual price the company paid for the cd's (new cd's). It usually hovered around $10-11 and change. The cds they seem to mention going for $3-4 are probably those dirt cheap (C product) cut outs (like bad quality classical recordings). The Wiz used to charge only $13.98 for new releases, but marketed blank tapes and other accessories like crazy cuz thats where they make their money ($5 on a $6 audio tape pack).
As for cds going for $9.99 right now? Those are "super savers" and other types of groups (like 8 track greatest hits of the jackson 5). These are B product cd's, cds that still sell but are marked down (this of course excludes artists like The Beatles).
Hopefully they'll start pricing "last year's" new releases are a lower rate. But i really think a big shakeup is going to come out of this, a lot of artists are going to get dropped. Just my opinions.