He admits that early on, when he saw his works "pirated" on the web, it made him quite upset. At first, he (totally incorrectly) believed that if he didn't fight online copies, it might mean he'd lose his copyright (a myth based on a weak understanding of trademark law that sometimes people confuse with copyright law). Thankfully, he learned that wasn't true. However, where it gets interesting is when he realized that whenever his works got "pirated," it actually seemed to help his sales:
"Then I started to notice that two things that seemed much more significant. One of which was that places where I was being pirated -- particularly Russia (where people were translating my stuff into Russian and spreading it out into the world) I was selling more and more books. People were discovering me through being pirated. And then they were going out and buying the real books, and when a new book would come out in Russia it would sell more and more copies."
He then mentions that after a lot of persuading, he got his publisher to release a free digital copy of American Gods, and sales went up by 300%, even though it had already been selling quite well before that. And that was his epiphany moment that you're "not losing sales" by having stuff out there. And he explains how "piracy" is just a giant way of lending books, and points out that, when asked this question at talks, he asks how many people in the audience found their favorite author because someone lent them a book vs. going into a book store and buying it. And only 5 to 10% of people found their favorite authors first by buying the books.
"That's really all this is. It's people lending books. And you can't look on that as a lost sale.... What you're actually doing is advertising. You're reaching more people. You're raising awareness. And understanding that gave me a whole new idea of the shape of copyright and what the web was doing. Because the biggest thing the web was doing is allowing people to hear things, allowing people to read things, allowing people to see things they might never have otherwise seen. And I think, basically, that's an incredibly good thing."