Samwise, I see the benefits, believe me! There are also more downsides.
If everyone had the intention to go and buy Tee Shirts, or live gig tickets etc, then I completely see the benefits, but many don't - because frankly, if people are often not in the position to buy an album because of financial constraints, what chances them paying MORE to go to a live show and in many cases, more for just a Tee Shirt?
I certainly will never be convinced distributing your music on the internet can lead to greater radio airplay. And radio play is what directly affects sales. Not internet access. Radio stations play your songs alot, sales follow. That is why bands on Triple J exclusively, the more " obscure " bands, hardly make enough money to survive. ( Yes even the likes of Grinspoon etc barely scrape even )
I am however interested in these studies you speak of, are there any papers online to show the findings of these studies? I've never heard of it before.
Being in the industry, and having my music on the net, I can assure you from first hand experience, the negatives, far outweigh the positives from my point of view, and if you check out what other artists have to say, there has to be a reason behind why they say it.
As a songwriter my greatest returns come from royalties - both airplay and sales. Distributing my songs for free online , do not benefit either.
If the bulk of income came from gigs, tee shirts etc, then maybe I can be swayed. But a songwriter while they earn good money from live performances, earn their greatest % of funds from royalties.
The lead singer of the Goo Goo Dolls sums it up for me "If you rob artists of their means of earning, eventually there will be no art of consequence or substance."