My personal explanation is the collapse of the record industry. I don't think it was due to piracy, though piracy didn't help. It was mostly due to the abandonment of the old practice of scouting for interesting new music in favor of producer-led manufactured pop. The suits wanted a more reliable way to produce marketable acts, and they got it... at the expense of virtually all innovation. The same thing happened to mainstream Hollywood studios who can now only make one movie. Of course it only works for a while. Now everyone is bored and nobody cares and listenership and movie attendance numbers are crashing.
(This is always what happens when the bean counters run things. You get a short term bump in profit, but what they are really doing is cannibalizing the value of the enterprise in hidden ways. The body is basically digesting its own organs. Eventually you are left with a shell with no value.)
Piracy did worsen this trend in the record industry. When the economic model starts to be threatened, a natural response is to become more conservative and cancel anything innovative. It's usually the wrong response, but it's a very normal human response to a feeling of threat or starvation.