Declining CD sales have plagued record companies for years, according to a Wall Street Journal report. Downloaded music is not enough to offset the 20 percent loss in CD sales, which are the most profitable medium for recorded music available.
According to a Harvard University and University of North Carolina study, file-sharing has a limited effect on record sales. They found that most users of file-sharing networks are people who wouldn't have bought the music anyway.
According to the Dutch Ministry of Economic Affairs, the effects of downloading music are positive as people get content they want and get to spend their money on other things. Consumers save more money than producers lose and the economy wins overall.
Downloading music has a positive impact on the environment, according to a study put out by Microsoft and Intel. Downloads cut carbon dioxide emissions by eliminating CDs, packaging and delivery.
Some artists have chosen to evolve with the trend of downloading music in order to maintain their career. Radiohead famously offered their album, "In Rainbows," as a free download direct from their website in 2007.