I've always thought that file sharing was the boon for up and coming musicians. The funny thing is, I've bought more CD's and songs from iTunes because of all the free music you can listen to from YouTube, iTunes, and other radio sites (not to mention torrents).
Another latent benefit is that people now have a wider variety taste in music. Back in the 90's for us youngsters, it was one of two things - rock or hip hop. Now it's so much more.
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