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Bit's are Bit's - it dosent matter what it contains. They are just a bunch of 1's and 0's. The only thing you purchase is the delivery medium . On a CD it's a plastic disc, on the internet it's packets delivered over the network, on satellite it's streaming from space.
So yeah CD's sales have declined, but what about all the other mediums that the record companies make their sales that did not exist before then? I-Tunes, XM radio, Launchcast, BuyMusic.com - we are just seeing the beginning of a whole new avenue of content delivery.
Digital Cable, and Digitial TV are just in their infancy - soon you will be buying the music through the cable box (which will be in every home) and uploading the music to your MP3 player for portable travel, and transferring to you jukebox for play. You didnt buy an actual CD - but you did purchase the music.
Now - who wants to pay full price for digital bits that dont contain artwork, a box, or anything tangible. Certainly it's cheaper for the Record Companies to product and deliver digital copies without the overhead of packaging and retail distribution. It probably costs 10 bucks to encode an album and put it on the internet in a database. Sure there will be an inflated price associated with it because of artist royalties, management, etc - but if you remove the prodution costs of the actual phystical medium, including shipping, and retail costs - the tracks would be considerable cheaper, and the same percentage of dollars got into their pockets.
CD's are the old cassette tapes, and before that LP's - it's just that technology advanced so fast this time round that it caught the Record companies off track and they're panicking - cause it costs a lot of money to keep these "stars" around.
It's the last gasp of a dying industry, and the beginning of a new era of content delivery and inpendent publishing and distribution. Websites will be the artwork for a digital album.
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