For the big labels, most of the money is not going into the costs of making the content itself - most of it is going into marketing, executives, etc. The musicians themselves get a small portion of it.

The model faces some threat due to the shift of musicians moving to do their own marketing themselves without a label, and releasing the music themselves onto services like Bandcamp, or even directly to services such as Amazon, iTunes, etc. The internet has provided a powerful medium to fight against the entrenched interests of the big labels that don't feel like they need to do more for their artists.