I presume it goes something like this then:

MP3 copy @ 99¢
Manufacturing/reproduction costs: 0¢
Royalty: 66¢
Customer Support: 22¢
Hosting/download: 11¢
Profit: 0¢

Presumably the label is laughing all the way to the bank, the musician has been cut out of the deal, and the retailer is left holding the baby.

How much better a deal it would therefore be if the musician disintermediated themselves from the unviable copy-selling industry and started selling their music instead?

FLAC master @ 0¢
Production: $100
Manufacturing/reproduction costs: 0¢
Hosting/download: $50
Audience incentive: $990 (1,000 fanatic patrons @ 99¢)
Profit: $840

No royalty – files are copyleft.
No support costs – files are freely copyable, the music is a priori without complaint.
Cheap hosting – due to BitTorrent.

Labels remain free to sell their promotion/discovery services to musician/audience, retailers are free to add value, musicians have money, audiences have music, and the public has its liberty.