The record industry has its head up its backside over this, they have failed to embrace the new technology and monetise file sharing. All the on-line music sales sites have limitations which are a big disincentive. e.g. only allowing use on a couple of devices.
Also they only offer what they think the public wants to download, not their entire back catalog, which would be relatively easy to do.
The price they charge for downloads gives them a much higher margin than they get from a CD. No packaging to pay for and originate, no physical distribution, no stock holding etc. Downloads should be dirt cheap; the record industry would still get a decent cut and the artist and copyright holder would get what they deserve.
I favour a system of licensing which would enable the licence holder to download and/or share as much music as they want to without penalty. The licence fee would be redistributed direct to the copyright holders in proportion to the number of times the track was downloaded. A small part of this could be used to recompense the record labels for their lost profits and for money they may have invested in an artist or band.
Downloading and burning to CD's for resale would still be a criminal offence.
So then we could get back to real choice in music and hopefully something half as good as the old Audio Galaxy where you could find such treasures as Jim Morrison jamming with Jimi Hendrix.
BTW the real reason music sales are falling is nothing to do with down loading it is the wishy washy soulless music that the record companies are offering. Simon Cowell and his ilk have a lot to be sorry about, they have convinced every pub karaoke singer that they can be famous, short cutting the years of playing in small clubs that allows the talent to develop. Then they release a few overproduced cover versions which all sound exactly the same as the last "discovery" before they fade into obscurity. A whole generation has grown up thinking that this is the best there is, it stinks. Perhaps I'm biased but I grew up listening to the Beatles, the Stones the Beach Boys, the Who, the Kinks and so many more. Now every "indie" band and every female singer sound the same. I despair for the future of popular music. As for Rap that is not even music it is Rhythmic Doggerel and requires very little talent and ability to write or perform. Those who look up to Snoopy Dog and the like as role models are setting their sights far lower than those of us who looked up to Jimi Hendrix and John Lennon.