Writing in the Washington Post, Kim Hart notes that Imeem.com has made a go of its music sharing business by illegally sharing copyrighted music and building up a substantial following so that one copyright owner, Warner Music, decided to buy a piece of Imeem and make its entire catalog available for streaming (not downloading) link here. Warner found it an inexpensive way to advertise and increase demand for downloads. It also shared in Imeem's revenue from advertising on its website.

Part of Imeem's attraction is its role as "an online community where millions of fans and artists discover new music, videos, and photos, and share their tastes with friends." Hart reports that companies wishing to follow Imeem's illegal path are less likely to displace those first to market and to encounter more serious opposition from copyright owners who can look to increasingly expensive enforcement.

For example, "Sonific, an online service that allows users to stream music to blogs or personal Web pages, is trying to strike licensing deals with large record labels to expand its music library, which now has about 250,000 tracks from smaller, independent labels. But Gerd Leonhard, the site's founder, said it cannot get the interest of labels because of its relatively small pool of 100,000 users."

My first reaction to this story is that the web made copyright irrelevant. But in the end, we still have the problem that copyright gives the first or early to market suppliers an enormous advantage, for which the consumer pays. It effectively limits competition.