There may be some hope for the music industry yet. According to an article in the New York Times, Warner Music considered the sharing of music in the negotiations with iTunes and explictly decided to allow it for rendezvous during the contract negotiations.
But, I found more interesting some of the things that the article lead me to...
The article contains some other interesting tidbits, including a statistic from NPD Group that indicates 43 million Americans use file sharing systems (as in Kazaa, etc.).
But, what I found more interesting was a comment in the actual press release from the research firm that "... our research shows that even if digital file sharing were to disappear tomorrow, the record labels and retailers would still need to overcome important underlying causes of recent market declines," which is the first comment from a major industry research firm that echoes comments from artists and others about the industry creating their own problems.
Interestingly, the study shows that most of the music sales loss is in people in the 35+ demographic, which they also indiicate are unlikely to use file sharing.
They make a number of specific recommendations that the record industry should consider following, including making more music that those demographics are interested in hearing.
Absent are some of the calls by artists for increased diversity, etc. but the indication in the study is still in line with many of the other suggestions that have been posted here.