A study by the Swiss government showed that people have a fixed budged reserved for entertainment - if they can download music for free, they will spend it going to the concerts instead.
I think most people underestimate the effect that file-sharing has had on our society. Music is so popular, not because of MTV, but because of napster&ThePirateBay&YouTube. If it weren't for these services, most people would probably listen to at most 10% of the music they listen to now, more likely 1%.