The other reality is that artists need record companies. Or at least the types of people in record companies. Accountants, promoters and publicists. People who focus on "details" like bills and schedules, leaving the creative focussed (and absent minded) artist to do what they do best.
However, traditionally, financially clueless artists have been signed for life for no royalties (as in Australian guitarist Tommy Emmanuels case) or don't posess the mental resources to keep tabs on managers stealing their money.
When I was 19 my third manager took $10,000. I've lost points (which mean money) from various projects. Had I been clued up and so inclined, I could well have gotten performance royalties for the singing I did on the first Savage Garden record for example. I've had another manager funnel over $30,000, while I was barely scraping by. I lost work - photos and songs because I left material in the hands of yet another manager.
Rip off rip off rip off. Artists are prime targets because they... we... are usually mentally geared towards creative endeavour. Lateral thought. Exceptions like Madonna exist (she is a great businesswoman - but then she's never been regarded as a great vocalist by any means).
I'll never forget this one guy that came into my studio years ago. He had 5 songs to record. Out of the countless people I've recorded this guy was far and away the most organised. Had everything worked out. Money, lists, time schedules, lyrics and charts impeccably organised. He was so "together". I couldn;t believe it.
Then I recorded him.
It was quite possibly the worst music I had at that point worked on.
The point being, that you may bemoan record companies. Artists certainly do. Without those personality types involved in the whole process, much of the music you've loved would not exist. The artist would be off on their next project. Forgetting the brilliance that lies finished, but gathering dust.
For a creative, their best work is usually what they are working on RIGHT NOW. Such is the way it works.
I have never had a problem with the concept of giving a percentage of my CD to people that want to:
1.Pay for it
2.Promote it
3.Sell it for me
I simply cannot do either. I like many other artists NEED the people in record companies you guys like to mouth off about. Remember that record companies are simply a collection of people.