An interesting article from the BBC takes a look at how file-sharing web sites can actually make a music act more popular. In fact, the research cited in the article shows that the most-pirated songs tend to be those at the top of the charts.
Think of the potential impact of this on Apple (NASDAQ: AAPL). I remember the halcyon days of Napster and the likes, when you could go online and find songs from various artists (I even found Scruffy the Cat on Napster, not an easy task) and download as many as you want.
Well, when the RIAA and Metallica decided to wade into the fray -- sites like Napster were either summarily shut down or had to start charging for their services.
Wrong. In fact, this article suggests that the free download sites are good for artists. Many industry experts suggest that the "unprecedented amount of choice on the web" has led to new models of music distribution. Those conducting the study call this a "Long Tail" argument, noting that offering more choice and helping people make the choice will result in more people choosing.
How does this impact Apple? The firm's iTunes site charges for music downloads, which may limit the number of songs downloaded by a customer. It's seems pretty logical that someone would download more songs from more artists if the songs were available for free rather than $1.29 per song. More songs downloaded and disseminated should be good for the artists. Nevertheless, I wouldn't expect Apple to suffer too much -- too many people use iPods and download their music from iTunes.