In this article, which misses one major economic element of the current decline (that the previous high was partly based on the 15-20 years it took music lovers to be able to afford to replace all their vinyl on CD) the following comment comes near the end:

“By mid-2007, when the majors realised that digital downloads were not growing as quickly as they had hoped, they landed on a more adventurous digital strategy. They now want to move beyond Apple’s iTunes and its paid-for downloads. The direction of most of their recent digital deals, such as with Imeem, a social network that offers advertising-supported streamed music, is to offer music free at the point of delivery to consumers.”

And thus is borne out the comment of many, including myself, over the last few years that if the majors had negotiated with Napster (which after all actually had a revenue model which they were willing to develop and share) rather than getting it shut down and distributing (in all meanings) and driving underground the service and the usage, then they’d have been much better off than they are now. The courts in Universal v Sony did the movie industry a favour by ruling “in favour” of the betamax video recorder. The courts would have done the music industry an equivalent favour had they ruled “in favour” of Napster.

Old media giants beware – negotiate, and allow new forms to grow, and they can become your next big revenue source; hit them with a big legal hammer, and the shrapnel will end up hurting you far more than anyone else.