Last week a Sony exec told a panel at the Digital Media Summit in Los Angeles that the music industry was not winning its fight against piracy. Albhy Galuten, VP of Digital Media Technology Strategy at Sony Corporation of America, said he does not believe the industry is making progress.

The industry's trade group, the RIAA, is putting out a different message. Yesterday the USA Today had an article on file-sharing that quoted Mitch Bainwol as saying, "The problem has not been eliminated. ... But we believe digital downloads have emerged into a growing, thriving business, and file-trading is flat."

That's the company line a year after the entertainment industry won a 9-0 decision in the famed Grokster case. Eric Garland, CEO of P2P-tracking company BigChampagne, told the USA Today file-sharing applications are still out there and more people --- 10 million today versus 8.7 million in May of 2005 -- are using file-sharing services.

The RIAA knows it is never going to eliminate file-sharing. It's strategy has been to create an environment that will allow digital sales to grow. Album sales are down a mere 3% in 2006. Given the huge growth in single download sales, combined with increased revenues from ringtones, video sales, subscription services and ad revenue-sharing deals for video and audio streams, it's not hard to imagine overall revenues growing this year -- piracy or no piracy.

Extra credit reading: File-Sharing: Creative Destruction or Just Plain Destructive? by Stan J. Leibowitz, University of Texas at Dallas School of Management.