Disenchanted's Honey, I shrunk the universe discusses the plummeting cost of digital media. An interesting proposition (at least for friends in CS385 Ethical and Social Issues in Computing, HINT HINT) is free mp3 music didn't bite into album sales so much because we're able to keep orders of magnitude more music; the free stuff is acquired in addition to your pet bands you'd like to financially support minus the publisher's cut.
Here's another: The plummeting cost of digital media is ultimately a democratizing force in the realm of media creation.
It seems strange that libraries lay out huge purchases for books but disk storage for the Library of Congress would be $80,000--but the libraries' outlay is also financing the creation of this media. Disks and storage are only getting bigger and cheaper (modulo immoral regulatory issues publishing corporations ask for), and as the costs of bandwidth and storage drop, the creation of media grows as a proportion of the cost of media. Publishers don't like the idea because it's (at least nominally) their part of the pie is the shrinking one. So, unless they manage to get legal recourse, their function will eventually disappear.
But if there are no publishing middlepersons, who packages media for the consumers? The producers and consumers themselves. Consumers like the people at Flak Magazine do the headwork to package a music product, then you do the legwork. Producers use a service like Emergent Music to get word out and feedback in, as well as buy consumers' awareness with free mp3s.
This rant steals music's vocabulary, but substitute writing and you get the weblog community; use visuals and you get the web design/Flash art community. Removing the middlemen from a media has a heavily democratizing effect. Like the Disenchanted article says, Sturgeon's Law may still apply, but it's at least the solution to the overcorporatization malaise.