Nobody ever seems to mention that people are spending less on downloaded music because it doesn't sound as good as other formats. When CD's arrived on the scene, people spent more money on them because they sounded better than cassettes (and vinyl, if you believed the marketing hype at the time).
MP3's on the other hand sound pretty lame when you actually do an A/B comparison to a CD or vinyl.
Also, when you download an album, you don't get any artwork or lyrical sheets. Sure you can get a digital booklet, but it's definitely not the same. Shouldn't you, as the consumer, get paid for using your own ink, paper and time to print the stuff out?
I think if labels or bands started releasing mp3's that actually sound better than CD's, there might be an uptick in spending on downloads. But compressed digital music, while more accessible and portable, is not higher in quality. Therefore people are spending less on downloads than they did on CD's. And thus the music industry is in the midst of a much publicized downturn.
The laws of economics continue to work. People will pay more for higher quality products. An mp3 is a sonically inferior product. Thus people don't want to pay that much for it.
Either release something that sounds better, or expect to earn less.
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