Behind the smiles, a particularly troubling set of circumstances is plaguing the record industry, which is in dire straits on almost every front. The major record labels depend on three things to survive: the money of fans, the music of their artists and the support of the multinational corporations that own them. But the labels are suddenly realizing that they can't depend on any of these. ... "If the industry doesn't change the way we do business," said Val Azzoli, co-chairman of Atlantic Records, "we're going to be bankrupt." While it has been widely reported that music sales were down 5 percent last year, this is the least of the music business's woes. ....

Neil Strauss of the New York Times issues a report on the (sad) state of the music industry, including the tough economic tradeoffs faced by conglomerates like Sony.

Behind the Grammys, Revolt in the Industry