The New York Times (registration required, links disappear) has an article about the plunging fortunes of the music industry. Sales of CDs have fallen more than 20% in the past year. While the article does acknowledge that a lack of good music may have something to do with it, no mention is made of the possible effect price also has on buying decisions. Most new CDs cost $18 and up.
The music companies continue to try to blame online music sharing as the primary culprit, but I am inclined to believe that they have cause and effect reversed, at least in part. High prices encourage "free" sharing, even though it is illegal. The record companies need to find better music, cut their high overhead, increase royalties to the musicians, and lower the cost of music. Continuing to blame customers and labeling their customers indiscriminately as thieves is obviously not working.
Is the Internet to blame? In part,sure. There is no reason to distribute music on CDs anymore, but the fact that file sharing is easy via the Internet does not automatically kill the music business. Good music at a fair price is step one.