Universal Studios is a very profitable company. There's no excuse for having such shoddy systems for fire fighting.
Amazing they were able to keep this a secret for so long. Not only did they lie to the artists, they filed and collected on a big insurance claim over the loss of the artists' work. Ugh.
OMG, what a massive loss: Virtually all of Buddy Holly's masters, Patsy Cline, most of Chess Record's recordings, Etta James' "At Last", Judy Garland, Bing Crosby, Bill Haley, The Kingsmen's "Louie Louie", Ray Charles, the Ink Spots, Joni Mitchell, the list goes on. What a tragedy.
Vivendi is looking to sell 50% of UMG, I hope Apple Records (the Beatles) buys it. Paul McCartney will make sure its managed properly.
To clarify why master recordings are so important:
Today, engineers can take old master recordings and electronically re-create them in ways that pick up even more details of the sound than before. With master tapes, they can change the mix, if needed to make drums, or vocals, etc. louder or softer than in the original commercial version of the song. Sometimes records pressed from old master tapes didn't have the best mixing. With masters, where all the different tracks of the recording are still separate, future engineers can change the "mix" to improve the song.
Tom Dowd does it in this video him showing how he mixed the song "Layla". Please God, don't tell me the masters for this song burned up!