Free goods - Recording artists only earn royalties on the actual number of recordings sold -- not those that are given away free as promotions. Rather than discounting the price to distributors, many record companies give a certain number away for free (about 5% to 10% depending on the artist). Recording companies also give away many copies to radio stations as "promo" copies. There is also a reduction in royalties made for copies of the recording sold through record clubs.

the mall charge you $20 for a cd, best buy charges you $10 (having worked at best buy i know all about there margin system though, so actually lose on each sale), and bmg gives 'em away for free.

That is incorrect; the royalties are still paid, but at a reduced rate:

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Free goods - Recording artists only earn royalties on the actual number of recordings sold -- not those that are given away free as promotions. Rather than discounting the price to distributors, many record companies give a certain number away for free (about 5% to 10% depending on the artist). Recording companies also give away many copies to radio stations as "promo" copies. There is also a reduction in royalties made for copies of the recording sold through record clubs.

I a concerned about the physical quality of the discs. Are these discs in any way inferior to those available in stores when it comes to quality of material used and quality of workmanship? In other words, under identical storage and handling conditions, will these CDs last just as long as those bought in regular stores?
This is a major concern for me. If these discs are inferior, then I may have to buy CDs from stores and replace those that I bought from BMG and CH. I am not willing to do this. That will be such a waste of money!!

I was under the impression that most recording artists only got pennies on the CD, anyway. Is that true?

She's referring to the fact that recording artists and songwriters do not earn royalties in the same way. Recording artists earn royalties from the sale of their recordings on CDs, cassette tapes, and, in the good old days, vinyl. Recording artists don't earn royalties on public performances (when their music is played on the radio, on TV, or in bars and restaurants). This is a long-standing practice that's based on copyright law and the fact that when radio stations play the songs, more CDs and tapes are sold. Songwriters and publishers, however, do earn royalties in these instances -- as well as a small portion of the recording sales.

Artists are paid royalties usually somewhere between 8% and 25% of the suggested retail price of the recording.

I have bought a number of discs from BMG Music Club and ColumbiaHouse. I am pretty sure that these CDs contain the same data as the catalog number is the same as those CDs available in stores.

@treeninja, I have experienced the same thing with BMG music store CDs. They show up as different discs on the AccurateRip database. However, I think that there is no difference in audio data when compared to CDs bought in stores as this would mean that BMG will have to re-master the disks in a bad way which involves additional cost and effort towards nothing else but the ruining of their brand image. Hence, I think that the data on CDs bought in stores is identical to that found on a BMG disk. All this is pure speculation, of course.

treeninja - out of interest, what does EACs Compare WAVs tell you? Perhaps only the offsets have changed between the CDs, although there may be other small differences.

There should not be any other differences-- but Kees de Visser's examinations have revealed that, unfortunately, there are differences.

Presence or absence in accuraterip probably doesn't mean much, since plenty of accuraterip users get their CDs from BMG (myself included).