Technology and a refusal (and partial inability) to change killed the music industry.
It now costs NOTHING to distribute a band's song to millions of people (minus electricity, of course). Continuing to try to sell recorded music is just like trying to sell ...Noting quickly comes to mind as being such a dramatic shift in an industry. With digital files, charging for end-product is a business model that's completely out-of-sync with the reality. Yes, producing digital content is not free. But distributing it is. (To the producers, anyway. ISP's already make their own profits.) This means the "take out loan, develop, sell results" model simply does not work. It needs to be replaced with something more along the lines of "get funding, develop, give away results", which takes advantage of digital distribution, but this just isn't possible in capitalist society.
So we're stuck with a bad model. Selling finished digital goods is wasteful of the capabilities of digital distribution (and piracy results as a consequence), but giving away digital goods, while taking advantage of the technological advances, would require funding musicians (or programmers, developers, etc) simply for being musicians, which is only possible in a communist/socialist society where everyone is payed for whatever they do, regardless of type of work. Those types of societies create free-riders (who don't work or don't work hard, but are paid anyway), which results in lackluster products and people only working because they'll be punished if they don't (as people are generally uninterested in working for anything but themselves).
In both cases, we're pretty much out of luck. Either you use an inefficient business model, or an ineffective social model. It's not that much of a surprise the music industry(and anyone else that produces digital goods) hasn't come up with a good solution.