There is no practical way for music companies to prevent one teenager from making copies of a CD or a collection of MP3's for his friends–but consumers of music are willing to pay for the much wider range of choice available from a store. The reason Napster threatened the music industry was that it provided a similar range of choice at a much lower cost. Similarly for software. As long as copyright law can be used to prevent large scale piracy, customers will be willing to pay for the convenience provided by a legal, hence large scale and public, source for their software. In both cases, the ability of owners of intellectual property to make piracy inconvenient enough to keep themselves in business is threatened by the internet, which offers the possibility of large scale public distribution of pirated music and software.
Source: http://patrifriedman.com/prose-others/fi/commented/Future_Imperfect.html#There_is_no_practical_way_for_music_companies_to_p