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Music Industry Wins Victory But At What Cost?

The Recording Industry Association of America won a big victory--the first of 26,000 music file sharing copyright infringement suits settled in their favor. The amount of the settlement: $222,000. Considering that 10,000 of the suits have settled for less than $5,000 this is a good thing.

But most importantly it sets a precedent, and now we're sure to see the RIAA and the six companies it represents much more likely to take suits to trial instead of settling and probably file even more suits.

But what's it worth? Illegal file sharing is up about 60 percent over last year and illegal downloads are ten times more popular than legal downloads (according to NPD group). So the lawsuits and fines aren't scaring away people, though more people are aware that file sharing is illegal.

It seems that the music industry won't be able to halt piracy--but their best bet may be focusing on growing legal downloads, making the legal variety more appealing. Are all these lawsuits just a distraction from the task at hand:building revenues? That's a big question.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.