Tristan_Geoff

You can already see some of this with online services. More and more people are catching on, the underground is the way to go. Outspoken music fans will always buy CDs and Vinyl, and iTunes will be a superpower for while, but sites like bandcamp, soundcloud, and others have really gained traction for music distribution in recent times. The thing is, I like what iTunes is trying to do, they have a lot of music available for sale, but it's all highly compressed and costly (which actually seems to be getting higher every few years). Alternatives like bandcamp do much more in terms of music discovery and freedom for both the artist and the fans, fine tuning the product to what they want and letting them pay what they want. I expect other bigger name artists and eventually the industry to adopt this model at some point, or at least attempt to.

Music piracy, as it's been very well documented over the past decade, has actually driven sales up. People who pirate sometimes do it as a sampler, then buy physical later on. However, it's been a while since then. Streaming services like Spotify or the late Grooveshark allow instant access to vast amounts of material. Music piracy has certainly gone down due to this, but inadvertently physical sales are dropping too. Regardless, lots of people buy physical, and lots buy digital.

Also, not much money comes from the actual recordings in the first place. When you buy a CD it goes mostly (I'd say 99.9%) towards the actual label, unless of course, it's a big name act on a major label that has at least a gold certified record. Below that, artists don't see much from record sales. The artist gets their pay from merch and touring.

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