From the A.V. Club’s interview with Devo frontman Mark Mothersbaugh:
I remember going to visit [Warner Bros. head] Mo Ostin about six to nine months after audio cassettes became a big deal. Before that, people were just buying vinyl, but then, audio cassettes were becoming the most sought-after item. People were not buying records anymore; they were buying these little audio cassettes. [The record label was] paying [us] less money for an audio cassette, but there were articles in all the papers about how much cheaper it was to make an audio cassette than it was to press vinyl. So I went in and had a meeting with Mo Ostin, who was the president of Warner Bros. Records, and said, “You know, Mo, I need to ask you something really important. Why is it that in our deal, you have it so you’re paying us substantially less money for every audio cassette that you sell than for every piece of vinyl, yet you make a bigger profit off every audio cassette?” He just smiled and looked at me like I was his dense, naive son. And he goes, “Because that’s the way it is.” That was his answer.