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You are ignoring the fact that digital music is cheaper.

At 99 cents a song people don't have to pay $20 for an album in which they want 3 songs.

Also the 1990's were a music bubble fueled by things like MTV.  Music sales are consistant with the decades before.  It had nothing to do with piracy and everything to do with a bubble and people having more control over what they want via things like itunes.