While I don't doubt that the increased ease and frequency of piracy has had an impact on the bottom line of the recording industry, I believe the decline of the industry as a whole has much more to do with the increased capabilities of home computers and the spread of broadband Internet access.
The big recording companies provide a few main services to artists: production, distribution, and promotion. For years they kept CD prices artificially high because there weren't alternatives for most people (for artists to create albums or for consumers to obtain music).
Once everyone could record and burn CDs expensive production studios became much less valuable, and broadband Internet makes distribution nearly free (relatively, at least). Simultaneously, radio has become a much less important means of promotion, so the connections that the recording companies had in that arena become much less valuable.
In other words, the big record companies just don't offer the value they used to - either to artists or to consumers. And once the value your company offers disappears, so should your company (unfortunately this usually happens very slowly, with the company(/ies) trying everything to avoid extinction).
So was it a coincidence that this all happened at around the time that Napster took off? I don't think so, I think there were just common causes that led to both results.
The price of CDs were not "artificially high." That's copyrighted material. The copyright holder is supposed to have a monopoly on it. That means that they get to charge whatever they think the market will bear, not what you think is fair or the cost of production + x%. There were at least a few labels like Dischord that charged lower prices, but the masses didn't want that music. They wanted major label stars with lots of marketing behind them.
If the copyright holders still had the ability to enforce copyright, the fact that internet distribution is cheap wouldn't mean anything, except that they would be able to charge less and still turn a profit. The real problem with the internet for them is that it made piracy on a massive scale easily accessible. You don't have to respect their copyright anymore.
I'm kinda old now and don't follow pop music that closely anymore, but as far as I know the masses still want their top 40 pop music recorded by heavily marketed stars, not some dude on an indie label or no label at all who used his laptop as a recording studio. So the fact that said dude has an easier time now is irrelevant, except to the minority of people who are interested in hearing/recording that kind of thing.
Right, because since the internet took off, huge, mass-media publicized "artists" have fallen to the wayside and been replaced with a wider variety of niche acts, many of whom weren't signed to labels at all? No. The labels aren't suffering because they have to compete with independent artists, they're suffering because they have to compete with the Pirate Bay and friends.
Very much so, as a matter of fact. Still, widely available piracy of major-label music has diminished record sales to a far greater degree than competition from independent artists.
If the major-label hegemony was truly broken, we wouldn't see these mass-market pop stars on major labels get the publicity and record sales (compared to indie artists) that they do, nor would the top touring bands by major revenue continue to be major-label acts. On the contrary, major labels continue to be successful at choosing and promoting which acts achieve popularity and success--they are just less able to share in that success themselves.
The big recording companies provide a few main services to artists: production, distribution, and promotion. For years they kept CD prices artificially high because there weren't alternatives for most people (for artists to create albums or for consumers to obtain music).
Once everyone could record and burn CDs expensive production studios became much less valuable, and broadband Internet makes distribution nearly free (relatively, at least). Simultaneously, radio has become a much less important means of promotion, so the connections that the recording companies had in that arena become much less valuable.
In other words, the big record companies just don't offer the value they used to - either to artists or to consumers. And once the value your company offers disappears, so should your company (unfortunately this usually happens very slowly, with the company(/ies) trying everything to avoid extinction).
So was it a coincidence that this all happened at around the time that Napster took off? I don't think so, I think there were just common causes that led to both results.