Finally the entertainment industry has admitted what we all knew anyway – online downloading of music, movies and TV is in fact saving the industry, far from killing it.

Starting this Christmas holiday season, all the major studios have agreed to suspend fruitless and expensive attempts to sue people who download, and instead are embracing online distribution (even free) as their finest advertising and marketing mechanism.

“At last!” said futurist Neil Jacobsohn, from global business and technology think-tank FutureWorld. “We’ve been saying for years now that everyone knows that music and movies are free – except the studios! Of course they’re not ‘free’, but there are new and much better ways to make money than by dragging students and little old ladies into court!”

Arguments that downloads were killing the industry faltered when news emerged that 2012 had been Hollywood’s best year in history – despite record downloads, mostly free, of its blockbuster movies.

But interestingly, it is the less popular movies, TV series and music that are really benefiting. “Everyone knows about the big hits,” said industry commentator Merle Valentine. “But downloading of smaller-budget items acts like a global lending library and a great – and free – online advertising campaign. This is how people experience new movies and new artists; and then they usually pay for tickets or buy their material.”

And Hollywood studio boss Hymie Melvyn got a surprising ovation for his outspoken comment at this year’s Oscars: “Downloaders are not pirates – they’re actually a critical part of our business and we welcome them.”