The record companies are in a very difficult position; the market for sold music has shrunk by half in seven years - this during a period when actual consumption of music undoubtedly increased. This kind of event would be cataclysmic for any business. The charge that they have mismanaged things certainly has some truth, but they would be bleeding even if their industry was led by Jack Welch. I suspect that more than a bit of this hand-wringing over the failures of record companies' management is self-serving: by saying that the record companies "were slow to adapt", it provides a justification for me saying: "fuck it, I'll just steal the music". But 1) the days of music not being available on a paying basis are now largely over. If you want to pay for music, you no longer need to walk into a store to do so. So I'm afraid that's no longer a valid excuse. Also, 2) two wrongs don't make a right: the screw-ups of the record industry are not compensated for or negated by us stealing their content. So there really is no excuse for downloading music illegally nowadays. I would personally prefer if they engaged in some PR to explain the plight of all the sound engineers, A&R guys, mixing engineers, musicians -- in short, the entire ecosystem of jobs that form the music industry -- how these guys are getting mercilessly whacked. That and then go after the guys who share music, whether on college campuses or elsewhere; but that would require that internet providers are on board. I can just hear the howls over the infringement of privacy.
But make no mistake about this fact: if people don't directly pay for the music they consume, the quality of music will decrease.