The Government of Canada commissioned a study by two professors on the effects of music downloading on the Canadian music industry.
(Recall that downloading is legal in Canada, but the record companies want the Canadian government to make it illegal. Only uploading is currently illegal.)
The study found that downloaders are more likely to buy CDs than non-downloaders. I am guessing there are a couple of reasons for this:
-- downloaders are more into music than are non-downloaders.
-- downloaders treat the Internet like I used to treat radio: a way of figuring out which albums are worth buying.
I used to tape the radio. The most significant tape I made in Dec 1974: of the about 24 songs recorded from the radio, I ended up buying the albums for about 20 of them. (I would have bought the other four, but I couldn't figure out who the artist was.)
In the end, there is no difference between listening to a song for free on radio and listening for free after downloading. In both cases, the musician gets noticed and he gets paid: by the radio station, or else by the royalty tax we Canadians pay on recording devices and media.