A study conducted by PRS, the British music royalty collection agency, looked into the downloading habits of the average user of file-sharing networks. They found that the most downloaded tracks mimic the music charts. That is, people tend to download music that's already popular.

The outcome of the study is not really that much of a surprise, since nearly half of all Internet users download copyrighted music without permission, so we have to agree with the overall conclusion. However, we do have problems with the authors’ following argument that unsigned and new bands don’t really profit from sharing their music online.

By sheer volume the number of downloads these lesser known bands accumulate might only be a fraction of those generated by the Britney Spears and Duffys of this world, but 10,000 downloads is pretty significant for developing artists. Artists need to be heard in order to build a steady fanbase.

Revenue wise, most artists trying to earn a living making music only have a moderate income, and every fan counts. Generally, they don’t make much from album sales – contracts where the band/artist gets less than 10% of the revenue are quite common. Merchandising and playing gigs are the largest source of income, income that is generated by fans.

If the average artist can pick up a few hundred extra fans by giving away his music for free, this can make a huge difference. This group might not be that interesting for the record labels and the royalty collectors, who tend to feed off the top 1% of artists who are generally well marketed by million dollar budgets from the music industry.

Contrary to the conclusions of the PRS study, a special brand of ‘pirates’ are particularly interested in new and unsigned bands. On the music tracker What.cd, which hosts almost 100,000 users, the most downloaded album ever is a compilation of unsigned artists. Second is an album from The Flashbulb, with 10 times as many downloads as Britney Spears’ Greatest Hits collection.

Similarly, on the music sharing website Jamendo thousands of artists are giving away their music for free. Rob Costlow, one of the early adopters of the site told TorrentFreak that thanks to this free music model, he is able to make a living off his passion. His most popular album on Jamendo was downloaded over 80,000 times while nearly half a million listened to it on the website.

So, even though the vast majority of the the users of file-sharing services download music from the top of the charts, there is undoubtedly a huge potential for new artists to market themselves through file-sharing. Perhaps less interesting for the major labels who make most money off cleverly marketed top acts, but extremely valuable for the average artist trying to make a living off music.