Usually rational blogger Glenn Reynolds has been replaced, at least momentarily, by a pod person. He notes today that: (a) Used copies of an out-of-print book by his wife were selling for $99.95; (b) She made it available in pdf format; (c) The price of used copies has held firm or even gone a up a bit. Therefore, he says, the RIAA should conclude that free downloads do not cannibalize sales of music.
The problem is that a used copy of an out-of-print book has three forms of value: Information value; Convenience value (viz., a neat binding rather than the loose-leaf pages of a pdf printout); and Rarity value. If the book becomes posthumously popular, then both the convenience value and the rarity value can increase even if those who care only about information value meet their needs via the pdf version.
If Glenn's wife were now to bring out a new edition in paperback (no rarity value), I think she would find that her pdf distribution did indeed reduce her royalty check, like, to pennies, even as the popularity of the book skyrocketed.
Furthermore, to analogize this situation to the perfect and unlimited copies of digital music downloading, where information value is all important, makes no sense at all.