"Unfortunately for the record labels, it looks like the glory days of the mid-90s have vanished forever, and no amount of lawsuits, DRM, or licensing deals will be able to turn back the clock."
ArsTechnica has a good article about a recent report that details the problem the music industry is having. The report, by Enders Analysis, suggests that the problems relate not so much to piracy as to single track availability (for sale or otherwise). The labels are putting out dreck that fans are not willing to pay $18 for. The album is dead, people are content to buy 2 or 3 of the best tracks off of an album rather than buying the whole thing. iTMS and the iPod are stifling innovation in the digital download market and the risk aversion of the music industry isn't helping much.

Hopefully EMI's move to drop DRM will send the wakeup call the industry is badly in need of. Though it seems the next from the bottom of the big 4, Warner, isn't getting it. Earlier this week there were talks of a hostile takeover of EMI to prevent the release of their catalog without DRM.