I think the issue should be settled otherwise, through royalties from the internet providers.
I would definitely be prepared to pay a little more per month on my internet access if it meant that artists would get paid.
That would mean the end of the record companies.
Perhaps that's why they're fighting the filesharers so hard.
FWIW, I also think the filesharing has made artists more dependent on their revenues from concerts, and thus performing better live.
Very seldom do you hear about bands not showing up on time or sub-par performances.