A comment from a thread on Spotify/Pandora/Grooveshark:

[I] don't get the music industry. They're like a bunch of old people in a retirement home listening to LP records. Have they a clue how these streaming tools will be a bonanza for the music industry. Another example, are Ereaders. I have bought more books using the Kindle then I ever did in my life (i really need to get a handle on that btw). I still have no clue why Amazon is not jumping on this and create their own streaming player which would let me listen to music based on my likes and then just purchase it from there. I am currently using DoubleTwist but it does not stream music or have a 'radio' or 'similar music' feature. Pandora's IPO is nearly going underwater this morning so maybe investors just don't get how these companies will make money.

Perversely, with the law the way it's written at the moment (with copyright law being inappropriately applied to digital transfers), even if the record companies were happy to use the internet in this fashion for publicity, they actually have to be seen to actively police the distribution of their content. It's nigh-on impossible to defend your IP if you don't.

So when someone starts selling knock-off merchandise on eBay, making hundreds of thousands of dollars, and you can't do anything about it because you "allowed" people to copy the IP all over the internet anyway, you're screwed.

The solution here* isn't to sit back and do nothing, but to decouple digital transfer from copyright law and come up with new legislation to cover it… but, well, good luck with that.

Of course, IANAL, but this is what I think.

Related: http://kera.name/articles/2006/12/well-we-would-have-lost-244m/

* I'll leave it as an exercise to the reader to determine whether the problem is in fact lost revenue and missed opportunities, or in fact something more general.