Many studies have shown that when it comes to music, a record label's best customers are those who share files. I encourage you to listen to this podcast episode even if you normally don't (or don't think a law-oriented discussion is your cup of tea).
Among other things, Doctorow presents an interesting concept; that the emotional investment companies have in their business models often trumps the practicality of said models. It certainly explains the continued efforts of the RIAA!
Doctorow tells the story of what happened when the E.U. considered changing database copyright laws. In Europe, database information can be copyrighted, giving each information company its own little monopoly. In America, this information can't be copyrighted. Result: In America the information industry grew 25 times over the same period the European information industry declined. Apparently, the only thing that prevented a sharper decline were the investments some European companies made in American firms.
So what happened when the E.U. looked into lifting the copyright restrictions on databases? In reality, everyone could see it was the way to go, but even the companies that invested in the U.S. firms weren't emotionally ready to give up their exclusive control. So the restrictions remain, to the benefit of the U.S. industry, and the detriment of the European.
There's more in this program, such as how the lack of copyright spurs fashion innovation and why link farms don't matter. This is important stuff, and something we should all be informed about. Because the laws being put on the books, and the draconian punishments that go with them, aren't being formed on the reality of the situation, but on the emotional investment of the major players -- and that affects all of us.