Whether he's getting paid or not is immaterial.

If he finds sufficient reason to generate content, and that content competes with that produced by the RIAA, he's creating a competitive threat.

It's tough to compete with free.

That's precisely what Google does with its services in competing against Microsoft, because Google's revenue stream (ad sales) is unlinked from Microsoft's (OEM / site / direct software sales).

But it is. Not him on his own, no. But the opening of music distribution to hundreds of thousands of people like him? Yeah, that's a threat to them.