I don't know - when the songs got cheap (mostly since you only have to buy one song) people started paying rather than stealing. I know I went from not buying much music (but not stealing it, either!), to paying online once there was a reliable mechanism where there was confidence you could get the songs you paid for onto another device later, or if you lost your player.
Here is a recent study that shows growth in paid downloads: http://www.ipsos-na.com/news-polls/pressrelease.aspx?id=5537. I think a lot of the issue is people just not knowing copyright. Students assume they can use anything if it is for educational purposes. I've seen a lot of photographers get called out online for posting photos set to music, when the music isn't licensed. So even people who understand copyright for their own Art fail to take the leap into another area. Making it easy to understand copyright laws would be helpful. posted in Social Media Are we on the Edge of a New Market for Images?