(FORTUNE Magazine) – If nothing else, the Napster case shows just how deadly the record industry considers MP3. So given this uncertain future, we thought we'd check in on all those Bowie bonds, the debt issues backed by the royalties of older rockers like David Bowie and James Brown. Have free music sites affected the bonds' single-A rating? Will this mean there won't be a debt issue for the Kinks some day, possibly with a special tranche for Dave Davies tunes?

Bowie bonds work like commodities futures: A farmer doesn't want to bear the risk of a natural disaster, so he sells the future price of his crop. If online music piracy grows, it could be like a drought hitting the record industry, meaning wilting cd sales. For example, Bowie and Brown, who got cash up front, could potentially lose the collateral for the loans: their song rights. And the bondholders, mostly insurance companies that assumed the risk in exchange for an 8% return, could get stuck holding the bag--and possibly the rights to "Papa's Got a Brand New Bag."

But David Pullman, CEO of the New York firm that dreamed up these deals, doubts that will happen. Eventually, he says, someone will work out a way to collect royalties on MP3. And that will be a boon to royalty holders. "Overall, it will have a major positive impact," Pullman claims. "Anything creating this kind of awareness means more people want to protect copyrights."

So what does the market think will happen? For all the publicity surrounding the bonds, the Pullman Group issued only about $200 million of them, and they aren't regularly traded. Up till now there's been no rating change because the performers' bonds have been, ahem, performing. The Thin White Duke is still king.

--Carol Vinzant