First off, let's discuss exactly what copyright is and the purpose it was intended for. Though various forms of copyright law have existed throughout the ages, I'll not turn this into a dissertation and focus on the law as it's used in the United States. The first Copyright law in the United States was enacted in 1790, "To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." What copyright law does is provide a legal framework for artists and (and here is the point) content distributors to make money.

Look at it this way. Artists are not infrastructure people, nor do they usually involve themselves in distribution on a grand scale. Authors rarely go to trade schools to learn how to bind books. Your average singer certainly doesn’t have a factory for pressing CD's. By allowing an artist to copyright their works, it gives the artist legal clout, and the ability to make legal contracts with others so that both entities can potentially make money off of the endeavor.

This is a business model that has worked successfully for centuries and has survived by cautious adaptation when threats arrive to the model. The current situation is really no different (except perhaps in scope) from the "controversies" that erupted over the introduction of other modern technologies, such as the 8 track tape, cassette tape, VHS, Betamax, introduction of the DVD, ect... No movie studios went bankrupt, and no recording studios closed down as a result of these past threats. Indeed, one can look at the recent past, and realize that media industries have adapted extremely well, using these new technologies to open additional avenues for generating revenue. Even going back to the Gutenburg Printing Press, piracy/forgery has been an unavoidable consequence of technology. We still have books don’t we? Publishers and authors still make money right?

Thirty years ago, when a production company released a movie, it played in the local movie theater. If you were lucky, it might be on network TV heavily edited a few years later. Now? You see VHS releases, DVD releases, special DVDs with additional content, boxed sets, Cable, Satellite, and Pay Per View. Most movies will make the bulk of their actual profits from outlets other than the traditional movie theatre. Technology has clearly opened many additional avenues and revenue streams. Most consumers have adapted to this status quo and have accepted the fact of paying for the same thing multiple times for multiple experiences as a matter of course. Why? Mainly because there were few realistic alternatives.