Has Digital Music Failed?

Digital music is great, right? The music industry disagrees. 

One of the first litmus tests for our transition into the digital world, record company executives are now worried that the digital music business may have already peaked.

According to the International Federation of the Phonographic Industry, the overall music market shrank another 9 percent in 2010, filling out a year of persistent decline.

While digital music sales did rise 6 percent last year, the rate of increase in digital revenue has also steadily declined and presents a worrying trend -- digital sales may max out at $5 billion this year, billions short of the profits lost from the inevitable conversion to the medium of ones and zeros.