In defense of peer-to-peer file sharing.

I say “illegal” music downloads help music more than it hurts it. It helps bands like librarys help publishers, it the helps radio, and it helps bands on tour.
These music sharing networks are a lot like librarys as explained by Stephen J. Dubner in his Freakonomics blog. Libraries help train young people to be readers; when those readers are older, they buy books. Downloading helps people apprecieate music and when they get older they buy music. Libraries expose readers to works by authors they wouldn’t have otherwise read; readers may then buy other works by the same author, or even the same book to have in their collection. Downloading songs helps young people develop a taste in music. It expands their horizons and gets them to purchase more for their collection. Libraries help foster a general culture of reading; without it, there would be less discussion, criticism, and coverage of books in general, which would result in fewer book sales. Downloading also leads to more discussion and coverage of lesser known bands.
A recent trend is using pirated music to help radios develop playlists as explained in this Wall Street Journal Article. The theory is that the songs attracting the most downloads online will also win the most listeners on the radio, helping stations sell more advertising. In turn, the service may even help the record labels, because radio airplay is still the biggest factor influencing record sales.
It makes sense for bands to give away their music to make more money on tour as explained here by Chris Anderson. The one thing that you can't digitize and distribute with full fidelity is a live show. That's scarcity economics. No wonder the average price for a ticket was $61 last year, up 8%. In an era when digital products are commodities, there's a premium on experience. No surprise that bands are increasingly giving away their recorded music as marketing for their concerts, which offer something no MP3 can match. Live performance is the fastest growing part of the music industry, up 16% in 2006 to a record $3.6 billion in North America.
For example, starting on June 25th and for 20 days, the band The Format will be giving away their entire 2006 full length, Dog Problems to all comers. The disc will be made available on the band's official website without restrictions. The band explained, “Owning our own publishing and master has allowed us the freedom to experiment,. We’d be doomed if we sat around and waited for things like radio play to come around. We’re just not that band. We understand the reality; kids aren’t buying music. We’re going to see if we can’t pick up 20,000 new sets of ears by offering the album for free. We’re betting that the money lost on those record sales will come back when people come see us live this summer. This will be a chance to share the album with your friends who haven't bought it or fileshared it.”They say file sharing has likely contributed to the continuing decline in the music business. U.S. music sales were down 7% last year after a 3% drop the year before. But I think that is because people have more options of where to get their music from other than the record store. People’s taste in music is becoming more diverse and less mainstream.