well, i was a professional musician for 25 years, and IMO the royalty thing these days is just crap. Publishing companies and record companies (who usually own alot of publishing rights) get most of that, unless the artist inked a good deal with the record company on their contract, which, unless you are U2 or RUSH or KISS or somebody at the level of complete self sustainment by fanbase, most artists these days make shit for royalties. Most artists make their real revenue by touring. Thats is always money in the pocket, even after all overhead is payed for. Royalties are usually used by artists to reimburse record companies for advances and such anyways.
As far as sharing, remember the days of the mix tape on cassette, or just recorded copies for your buds?? that was the same thing as filesharing, without the internet. Nobody in the biz kicked up too much fuss back then, so i am always confused by the fervor about it now.