The NY Times (reg. required) has a short story on the music industry. Music sales are up 1.6% this past year, for the first time in four years.
What happened? Apple legitimized the online music market with it's highly successful iTunes Music Store, and a horde of competing online music services rushed in to give consumers a wide array of choices. Music sales went up.
The music industry, which fought online music sales for years, and still is, actually, has been dead wrong. The music conglomerates have claimed that illegal online music sales were ruining the business, and instead of innovating, the music business ran to Congress to halt innovation with awful legislation like the DMCA (Digital Millenium Copyright Act).
But Apple and other innovative companies weren't buying it, and found a way to give consumers what they wanted--affordable and convenient online music stores.
The music industry still has massive problems; artists still get too little of the royalty payments, and record companies are still charging the online stores the same fees they charged distributors for CDs, even though record company costs are now essentially zero.
But ordinary consumers have won, in a small way. Broadband (music downloads really don't work over dialup) brought music lovers increased choice in the marketplace, and allowed a host of new music companies to enter the marketplace and increase competition and choice.
Broadband is working.