It is dying, as it should. Younger generations experience music differently than many of the older generation. Music will still be appreciated, just by a smaller subset of people.
Have you ever been to a Can Jam event? Yes, you are right. The iPod generation does experience music differently. The demographic at head-fi events is between the late twenties and late forties. They are checking out all sorts of head-fi, including headphones, DACs, and dedicated headphone amplifiers that cost upward of $50k, with lots in between. The point is that the sector is anything but dying, which may lead to a resurgence of interest in two-channel audio, albeit it will likely look different.
Having just returned from CAF, the average age attending is probably 60, and I am being generous. So yes, the industry is contracting simply because baby boomers who have grown up owning a good hi-fi are aging out. What's driving the uber-high-end is that generation has accumulated tremendous wealth (the wealthiest generation ever) and is looking for ways to spend it. Hi-fi is as good a choice as anything, even better. I would say. So we have perhaps another ten years with $150k speakers, 300-pound $100k + amplifiers, and six-figure DACs and turntables.
I see innovation and value everywhere in the mid-high-end—for example, active speakers under $10k with incredible performance. Add a streamer DAC with a good VC, and you will have a fabulous-sounding two-box system.
Tonight, I am listening to an under $30k system with my pal David Blumenstein, which is incredibly satisfying. Those who know me know I promote high-end systems costing much more but also routinely ground myself in more modest offerings that still get my foot tapping and heart singing.
The high-end won't dye but must adapt. I'm encouraged at some of the new developments in my stable; for example, at Von Schweikert, we just introduced a $50k speaker that can run with six-figure models; WestminsterLab will introduce a dual mono, Class A integrated in the new year in the low 30's, Rockna is launching their new Reference DAC which at under $25k need not be embarrassed six-figure three chassis offerings, etc.
In the meantime, creating expensive systems that touch the soul and make one proud to own them is fun. Horns, panels (never been better), and multi-driver cones and domes - so much to choose from! And even at lower price points, I admire what Acora has done recently, Wolf Von Langa (field coils), Blumenhofer (horns), and Clarysis Piccolo's (ribbon panels) that allow enthusiasts the ability to put a system together for between $25-50,000 that rocks the house.
Encouraged about the future - you bet I am!