In each of the past two years, the rate of increase in digital revenue has approximately halved. If that trend continues, digital sales could top out at less than $5 billion this year, about a third of the overall music market but many billions of dollars short of the amount needed to replace long-gone sales of compact discs.
“Music’s first digital decade is behind us and what do we have?” said Mark Mulligan, an analyst at Forrester Research. “Not a lot of progress.”
“We are at one of the most worrying stages yet for the industry,” he continued. “As things stand now, digital music has failed.”
Music executives disagree, saying there is hope, as long as they can come to grips with piracy, which according to the industry federation accounts for the vast majority of music distributed online.
I got news for ya! If the record industry could magically shut off all "illegal" downloading overnight, it wouldn't translate into any additional record sales. The people who download music without paying for it wouldn't have payed for that crap in the first place.
The technology does make a big difference here. But it's not the theft that doing it. People by in large don't give a damn about buying albums anymore. AND, people spend their money on a lot of other types of entertainment/time-wasting activities. Such as video games, social networking, texting, etc. If you could block them from downloading, they'll just use that time to play Halo 3 or piss off their friends on Facebook by playing Farmville.