Hi I haven't read through this thread but I did want to make one observation.
Morris is quoted as saying:
"There's no one in the record company that's a technologist," Morris explains. "That's a misconception writers make all the time, that the record industry missed this. They didn't. They just didn't know what to do. It's like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?"
This statement has a lot of problems. I'll start from the top.
A long time ago, record companies produced records. That meant that they found raw (or polished) talent, polished the act up, hired some outstanding backing musicians and put this guy or gal in the studio. So the recording engineers, mastering engineers, etc. were essentially employees of the record companies. More like contract employees, hired to do a specific task (record a specific record).
These people can be defined as technologists. It is their job to put to use technology to produce the product that the record companies distribute. (As an aside, every modern engineer has known for the past several years how to make a good sounding mp3. And there are now many many many engineers employed because of the fact that they can do that.)
So anyway, at some point the focus of the major record labels shifted from that of a company in the business of making music to a company in the business of distributing music. They stopped developing talent, and did not set up a channel for that task to be outsourced. They began to court 'hits'. Sustainable sales; musicians connecting to their fanbase; producing quality music for people to relate to, and all the other ideals of the record company model went out the window. They began to narrow the target audience of the music that they would market, in effect, marginalizing most of the customer base that had sustained them through the last 40 years. At the same time, they bought up their distributors, and muscled the outlets (all the Sam Goodys of the world) into submission. Additionally, they created a situation where the artists themselves became responsible for producing the music. Or in other words, they created a situation where the megastudio model, the model upon which 50-60 years of american musical history was built, was no longer viable (because an artist will choose a studio with a lower rate, because at the end of the day, recording/mixing/mastering costs come out of the artist's pocket). They put their technologists out of business.
Just in case you missed it: They put their technologists out of business.
In essence they stopped being record companies and became manufacturing and distribution companies.
Now, being a distribution company that in essence distributes the product that they produce, they found themselves in a position where they no longer needed to innovate. People bought CDs, profits were high, and everybody was happy.
Enter Napster. The mp3 codec essentially overnight became the preferred format for illegal distribution. Its lossy (but still sounds acceptable), which means that file sizes for encoded music are only 10% of the original.
Now on to Mr. Morris.
The record company employs no technologists. He is correct. They essentially put them out of business as part of their transition to becoming manufacturing and distribution companies.
The record companies didn't know what to do. ********. And that's the other half of the point. If they couldn't figure out that the number two rule in business is 'if you can't beat 'em, join 'em' (number one is profit at all costs) then they deserved what they got.
Sorry if I've covered ground that others already have, I haven't read the post.
Mark