Considering people buy for convenience or to support the artist, I'd say a small label benefits more from piracy. The big labels with extensive marketing are going to gain less fans from piracy. While I might torrent a well-known group to try it out, chances are I'm already acquainted.
Whereas with a small group, pirating a torrent of stuff might be a way I actually discover an artist. I know I've downloaded big "mix" torrents, come across some stuff I like, then went to Amazon and bought all the downloads they had for that artist. Without the piracy, I'd have never found them.
On top of that, I think (perhaps incorrectly), that when you buy from a small label, you're promoting more good than buying from the big labels that will use my money to campaign for things I'm against. I know I have a few artists I like, but I'm not going to give money to folks that push for less due process.
Of course, actual data is hard to come by: it's not like you can accurately track torrent downloads/disk swaps and compare conversion rates.
