Creative Destruction in the Music Industry

In the year, 2000, 943 music albums were sold on CDs, and profits of music sales were reaching an all time high. With the release of iTunes in 2003, however, people were able to buy single songs or entire albums, and easily download them directly onto their computers. Soon iTunes came to dominate the music industry and CD sales declined.

This is a textbook example of the way innovation invites creative destruction. When people found out about Apple's new music model, where customers buy music online and listen to it on an iPod, many chose it over buying CDs. When iPods and iTunes grew more popular, the music CD industry declined. A physical product takes more energy and money to create than a digital one, and thus also sells for more, so when
the iTunes model made buying music simple and easy, the music business as a whole shrunk.

http://money.cnn.com/2013/04/25/technology/itunes-music-decline/index.html