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The implications, at least for the Christian music industry, include declining sales over the last three years that "somewhat mirrored the decline in mainstream," says Styll. "Downloading and burning have been a big part. We thought surely Christian people are not breaking the law—at least not as flagrantly. But we found that not only was Christian teenage behavior not that much different (from the mainstream), but so was attitude." Indeed, only 1 in 13 teens (8 percent) view piracy as "morally wrong."

Piracy has sent major record label conglomerates scrambling for solutions and trying to keep their once thriving businesses above water.

Bill Hearn, president and CEO of EMI/CMG (which includes the Sparrow and ForeFront labels), has some ideas about how to fight back.

"I've always said that the number one way to combat piracy is to create great music—culturally relevant music that people can't do without," says Hearn. "The second thing is to make sure our music is available wherever kids want to buy it, however they want to buy it, as conveniently, as affordably as possible. And that means we've got to have it at retail [and] at all the legitimate digital sites."

Though "legitimate digital sites" like Apple's iTunes—where consumers pay for legal downloads—are helping to put a dent in the problem, there's still much work to be done.

And it's not just the illegal downloads. It's also the age-old practice of simply copying an album for a friend. People used to do it with cassette tapes all the time; now they're doing it by burning CDs.

Brandon Ebel has certainly noticed.

"Illegal downloading doesn't hurt us as much as CD burning," says Ebel, founder of independent label Tooth and Nail Records. "CD burning is way worse. It's brutal. I'll sit next to people on airplanes and some kids will have like 30 burned CDs, some of which will be my bands."

Remarkably, as Ebel noticed, many of these consumers flaunt their "collections," seemingly unaware—or simply naïve—that they're showing off stolen goods.

Artists have certainly noticed. After shows, they frequently meet teens who brag about how many new songs they uploaded on their iPod, or how three of their friends each bought a different CD title, burned several copies and then distributed them amongst one another. Incredibly, fans are even sometimes asking artists to sign their burned CDs in post-concert autograph lines.

"Kids ask us to signed burned copies of stuff," says Gabe Combs of Plus One. "I don't know if these kids understand how much money it costs to make an album and how much it is worth. I think sometimes they get it free and don't think of the money that goes into it."

Also puzzling to artists is that consumers seem content with a mere disc and nothing else; a burned CD is just a silver disc, perhaps with the album title scribbled with a Sharpie. Why don't they want the whole package—liner notes, lyrics, photos, etc.—that come with a store-bought CD?

Veteran singer/songwriter/producer Charlie Peacock never imagined such a shift in consumer thinking.

"I definitely believe the whole consumer expectation about the product is changing," he says. "With the digital downloading, the song becomes the brand instead of the artist. It's kind of scary."

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