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Mike Arrington caused a bit of a stir with his article The Inevitable March  of Recorded Music Towards Free.  Mike says "The economics of recorded music are fairly simple. Marginal production costs are zero: Like software, it doesn’t cost anything to produce another digital copy that is just as good as the original as soon as the first copy exists, and anyone can create those copies (meaning there is perfect competition and zero barriers to entry)."
Mike does acknowledge that  monopolistic control over copyrights, and political lobbying may keep the price of music inflated ... nevertheless, I think he's right.  Simple supply and demand economics state that when the supply is infinite, the price will be zero. Now, I am no economist, but I did learn a bit about economics from the wonderful, and extremely readable book "The Undercover Economist". In this book, economist Tim Harford explains the idea of marginal costs and why things tend to operate "at the margins", and when the marginal cost of something is zero, then its price will tend to zero.  It is time for the next generate of musicians to realize that the best way to make money is to sell the thing that is in short supply - the live performance.