Gareth's done a nice post in response to this piece on where the money is going in the Music Industry from the Times Lab in an age of downloading.
The real decline is in money earned by the labels on recorded music. As G says "if your business model is purely one of content distribution it's perhaps time to exit.
Of course, I heartily endorse his comments about the fundamentally social nature of music (and linklove) " this is perhaps evidence of the fact that we tend to enjoy doing stuff together. Perhaps music is the ultimate social good, rather than the private good record labels would like it to be"
But maybe what we're also seeing is some kind of re-adjustment of business models. Did a great interview with the awesome Lance Weiler recently where he suggested that Hollywood and the music biz need to go back to a time when only a small part of the value lay in the story being told and rather more in the telling and retelling; less in the song being sung and rather more in the singing and its resinging; it's less the content created, packaged and protected by IP and more in what the audience does with it.
Great content is fine but it's only the start...it's a social object, folks
Irony alert: nice to see that this comes from the lovely people who've been a. telling us that quality content deserves proper payment b. scraping blogs for free content to pass off as their own.