[PeeWeeGee]

I think Dean and many others are missing a few very relevant points here:

1. As someone previously stated, the music industry (like many others) is/was bloated with fat-cat, self-justified middle men. Layers and layers of hands-off management that focused ONLY on QoQ revenues and maximizing profits. (Sounds like the oil industry, huh?!)
2. The advent of internet downloading and a direct line to the paying consumer has effectively outmoded those roles. MySpace, YouTube, and web visits provide the top execs with the feedback they need to determine "what's hot".
3. Guerrilla marketing via the internet has proven to be competitive with the highest budget video shoots and promotions schema. These days, it comes down to market savvy and creativity.
4. Your metrics don't include the revenues lost from artists who have decided to circumvent major labels and go indie. Can you post a graph showing Indie record sales and profitability? It would make for an interesting comparison, I'm sure.
5. While production and distribution costs have decreased exponentially, product sell prices have remained level or increased over the same period. Could that be a factor of dwindling marketshare? Maybe the consumer is smart enough to know that a shift to cheap media should reflect a shift in pricing.
6. The self-aggrandizement of the artists and music heads (mansions, yachts, diamonds, etc.) don't endear them to their consumers. As with pro athletes and other outrageously high salary jobs, there is a threshold where blue collar folks don't feel the need to continue to support the excesses of these guys. Right or wrong, the psychosis is real and anyone with market sensibilities SHOULD take that into consideration.
7. Major labels still give paltry percentages to the artists; even though today's game require that they come with a ready-made fan base, web presence, defined image, and performance background. These are the some of the things that labels USED to offer artists. If the ratios of input have changed, why haven't the ratios of profit?
8. The means and avenues to create an iTunes-like service has always existed equally for the labels. However, they OVERTLY chose to resist change. Consequently, they are BULLDOZED by it. It sounds a lot like how Sears was effectively destroyed by Wal-Mart. Failing to adapt is usually the last act of a dead industry.

None of these points are justification for online theft. Stealing is stealing - period. But I think you (and others) are being disingenuous when you present the labels' "tale of woe" like they are the victims of some great conspiracy. They are playing a HUGE part in their own demise.