It is somewhat a fallacy, and also somewhat true.
Clearly the problem is if the music is available for $0.00 there is no incentive to pay for it, meaning the artists and record companies get nothing.
There needs to be a middle ground somehow.
The labels made a deal with the streaming audio providers. They will collect money and the artists still won’t get anything.
Allowing trading music does not prevent a band from achieving commercial success (e.g., Grateful Dead).
It is a fallacy in how the music industry estimates the value of the tunes they sell. They claim it is worth x- amount and complain about “lost revenue” when in actuality the cost to them is nothing close to what they claim.
When I first looked at this ‘problem’ in the early nineties, the costs for the record labels to stamp out a single cd was less than ten cents per disc -and that was including the price of both the plastic and the machinery operating costs. I am fairly certain it has dropped down even lower since then.
Then figure that the actual recording artists are receiving only a fraction of what their discs sell for and you will quickly realize that the artists themselves are not being hurt so much as it is claimed, and indeed some would argue that the increased publicity from the downloads actually increases sales.
Finally, realize that the actual groupmembers are legally unable to provide downloads to directly achieve a personal profit (or a charitable cause) due to the contract(s) they signed with the major labels themselves, and you can easily see that the riaa and their ilk are attempting to create gold from gab.
Then re-read the article: this bloke is “downloading” at a phenomenal rate to a nulldevice, the equivalent to a single loop of continually-recording magnetic tape -but the recording industry claims the full 40 dollars or so for each “download” is “a loss”.
Makes no bloody sense at all, once you think about it.