The record companies might have you believe that the Internet will obliterate all music and stifle creativity, but year after the year the actual amount of digital music sales doesn't follow that logic. In fact, record company revenues for last year increased a massive 40%, according to the yearly report by the IFPI. The $2.9 billion isn't a record for them and is still less than the peak a few years ago, but is not chump change by any stretch of the term.
Pirating aside, sales of music online has also grown. In fact, the most interesting bit of news to come from the record companies is that legal online downloads now make up 15% of music sales. That's a significant chunk from what was not even a drop in the bucket five years ago. You can read the full report the IFPI published at the IFPI site.