I think most of the music (and movies) people share illegally is ripped from physical media. As long as they sell CD's I can't see how your branding idea would help this.

Another way of making illegal file sharing go away is to legalize it, then we would only have file sharing. The phenomenon being illegal has very little consequence I'm afraid. Most people do it, like speeding and I can't say I'm very bothered by this kind of criminality.