Glenn, I agree that ad-sponsored streams are often substitutional, especially for low-touch listeners who would listen to radio otherwise. But notice that the radio business is much bigger than the recording industry. Ditto Google, Yahoo, and other major web vendors. Low-friction ad-sponsored attention is a better business than high-friction unit sales.

What the labels are doing with rates and deals is to let successive generations of digital businesses go down, one after the other, while they wait for a mutation that can survive both the market and the licensors. This is a crazy bet.