How is illegal downloading effecting the music industry?

“Illegal Downloading is sucking revenue out of the record industry and threatening its ability to invest in its future. It is essential that it takes firm action against illegal downloaders”
Helen Snell

“Online Distribution might actually be doing well and maybe economic pressures are simply ensuring the parties involved find some way to make the adjustment”
Peter Kirn, From his blog Create Digital Music

Which do you believe?

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http://www.youtube.com/watch?v=WaU1c4kcAFs
H.Snell, http://www.ifpi.org
http://createdigitalmusic.com