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I think this article misrepresents the issue. It's not that digital downloading robs artists - just a flawed execution of a theoretically better system. To wit:

Weird Al says his contract stipulates a lower royalty rate for digital downloads than CD sales. Depending on when that contract was signed, he may have had no interest in digital downloads whatsoever. Pre-Napster, there was little to no market for digital music. Now, we have iTunes, Rhapsody, Yahoo music, Napster 2.0, ringtones (clearly a huge cash cow - they charge $2.50 for 30 seconds of music!), and so on.

But if the contract was drawn up, say, prior to 2000 - well, who cared about digital music then? It certainly wouldn't have made any difference to Weird Al if he got 50% or 5% from downloads - and so the record company (in their cunning way) probably had a blanket royalty rate on any future distribution method. And it was probably very small, because neither party expected that to amount to anything.

Then we get to the numbers, which make reasonable sense. Except for this part:

First, many artists can record fantastic music of very high quality in their own home studios. So, for some artists the record label is more marketing firm than recording technician (or, the guy who pays for one).

So? First of all, the fact that a musician can record music at home does not necessarily mean that is the best choice for the artist or the label. It also doesn't mean the label doesn't pay for anything when a home record is made. Ultimately, it does not matter whether the money was spent on recording, marketing, or both - it is all recoupable according to the terms of the recording contract. That's how it works. I don't have a problem with that.

According to widely circulated data from the coverage of The Allman Brothers suit against Sony BMG, you could expect something like $45 of each thousand songs sold to be paid to you in royalties.

Ok, again - what are the terms of their contract? When was it signed? The Allman Brothers have been around forever. For all we know, their contract dates from 1979 and has provisions for 8-track sales. And why should we expect $45 for every 1,000 songs sold? What is the standard agreement for iTunes (since that's the only download service being discussed)?

An important point to keep in mind is that the artist is at least making money from digital downloads. I'm sure the record companies could find a way to disguise that income and exclude it from royalty calculations. But you know what? If you're not happy with your current agreement, you can take steps. You can renegotiate a contract (especially for someone as well-known as Weird Al). You can start your own [record label/publishing company/digital music service]. You can lobby to keep your music off of iTunes altogether, if you think that would somehow benefit you. Artists have lawyers on retainer (just like labels do) for situations exactly like this.

Eighty Five Percent! If they cut my income by 85%, I'd be making soup from old shoes down by the railroad tracks!

Mechanical royalties, while significant, are not even close to an artist's entire income; therefore, the statement that it would be cut by 85% is false. Mr. Yankovic (they couldn't even spell his name right) is also entitled to PRO royalties, merchandise and ticket sales, and who knows? Maybe he delivers pizza on the weekends. But the point is valid: he would lose a lot of money if fans exclusively bought through iTunes. Again, the problem is not with the system, but with the fact that he signed a contract stipulating those conditions.

I'm going to stop now. I think Weird Al's opinions were misrepresented in the article; he seems to be disappointed that his digital royalty rate is not very good, but I think he also realizes why that is and doesn't have some crazy idea that paying for downloads will inherently "rob" artists.