"1. Piracy/less product being sold"
Actually, CD sales increeased 2.3% last year, the first increase since 2000. Legal digital downloads toped 140 million, equivalent to 14 million CDs.
So even with all the file sharing and "shitty, poorly produced" music everyone is complaining about, 666 million albums were sold. A small increase, but an increase all the same.
-gil
http://news.bbc.co.uk/2/hi/entertainment/4150747.stm