This article, "Embrace file-sharing, or die", is being linked to all over the net. The authors's main point seems to be that file sharing promotes sales so media companies should embrace it.
Other points they bring up is that consumers will choose the most convenient method. They also claim the media industries are not forward thinking.
It seems to me the authors are the non−forward thinking party here. My friends download music, movies and games from KaZaA all the time. They have collections of hundreds of movies they have burnt to CD or DVD in their collections. Are they likely to buy or rent the tape of those movies?
The forward thinking point that people need to get is everyday it gets more and more convenient for people to get and use media off the net.
My friend recently purchased an LCD video projector. It's a new model, only $1300. It gives him a wall size display at home and it's progressive scan. He has a Dolby 5.1 sound system. If he could get a reasonable quality copy of Lord of the Rings: Two Towers off KaZaA the day it came out in the theaters would there be any reason he would go to the theaters? No! Absolutely none.
MP3s may help CD sales today but that is only a temporary effect. Everyday it gets more and more convenient to use MP3s. When that convenience point passes CDs there will no longer be a reason to buy CDs and with things like KaZaA there will also be no reason to buy MP3s either, just download them for free.
I have about 130 CDs at my apartment. I MP3d all of them into my computer. I no longer use the CDs. Since my computer is connected to my stereo it's easy for me to select music from my MP3 player then to dig out CDs from their cases and stick them in the stereo (and having to put the old ones back). I copied them all to my notebook and put them all on my computer at work. For me, a programmer, it is already more convenient to use MP3s than CDs. In a year or two the same will be true for non−techies. Sony has already come out with MP3 based stereos. Panasonic has a net based stereo that will play MP3s directly off your hard drive over wireless net.
The same thing will happen to video in a few years as it also follows the same convenince pattern until getting your movies off KaZaA is more convenient than renting and the experience of going to the theater can be reproduced at home for a smaller investment in equipment.
The future is not "Embrace file sharing or die". The future is for media companies is to just "die". There is no future for them, period.