very nicely put. I remember a story about how Trent Reznor (spelling?) got tired of his label and just decided to release his music online for free and put a "donate" button there. he actually made more money by doing it this way since the record label routinely takes 80% of the profits. I am making up these stats but the story is true.
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According to this study with non-existent piracy economy is worse off:
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