They are fans. They are the same fans that buy every album, buy t-shirts, go to every concert, and expose their friends to the music that they love. The fans are not trading the music as a comodity, but are spreading the sounds that they enjoy to others. Increasing the fan base, and enabling themselves to enjoy the music in new and exciting ways. Additionally, it allows die hard fans access to rare material, live concerts and lost songs.
Copyrights are good.
Piracy is bad. Utilizing technology is good. Banning technology is bad. No demographic study, or marketing strategy can produce results as accurately as this technology. They identified that their business model as they know it is in jeapordy because of the drastic lowering of distribution costs.