By nature, the consumption of music occurs in both public and private spheres, the same with its creation.
Therefore, bold statements containing words like always can never be universally applied, particularly in this case. What I would like to focus on is the evolution of this public/private mix over time. From this perspective, I have two fundamental points.
The first is this interesting conundrum you have pointed out where innovations such as the headphone are both a public and private event in that the listener-consumer consumes his product privately while other potential listener-consumers observe him doing so in public. Now this is important because in the history of the consumption of music, say going back to a time before the advent of recording media and players, all consumption of music took place publicly (the "consumption of music" being defined as whenever a citizen not "playing" music perceives the sounds around him and consciously orders them as music, the "consumption of music" also being distinct from the "creation of music"). Now, in this modern media capital as you referred to it, a substantial if not majority of the music consumption going on takes place privately, in headphones, on computers, hi-fi systems, etc. While this public/private phenomenon (the fact that something can be simultaneiously public and private) is hardly fascinating to the 21st century aesthetician, what is fascinating is that the recording industry has not adapted to this trend, though it may well have been festering since the introduction of the Victor Victrola in 1906.
This leads to my second point. While the recording industry has not adapted to this evolution of culture, the movie industry has. The first Hollywood movies were necessarily a public event, their playback being restricted to venues with the technical capabilities to present them. However, as consumer video-playback technology improved over the years, the industry has had to continually adapt their industry practices. The first such challenge came in 1984 with the Betamax controversy as legally resolved in Sony v. Universal which released manufacturers from liability if their product enabled illegal transfer of media content. Despite this Napster parallel, Hollywood adapted and created huge profits on VHS sales. When DVD came along, the same thing happened. New industry, huge profits despite fairly widespread capabilities to rip DVDs and download them. Sure, there is a huge file-size discrepancy between .mp3 files and ripped-video but I don't think this solely explains why so many people "download" music via KaZaa et al and not "download" movies via these same P2P services. The key is adaptation. VHS, a format which in 1976 premiered only six years before the CD, only had the movie itself and a few previews if any. DVDs upped the ante with all their extra doodads and trailers and documentary "making of this or that" aspect of the film. This is added-value content the consumer gets at no extra charge and being that most consumers are completist by nature, the time invested "stealing" a DVD is not worth it when compared to shelling out $15-$20 for it. Now, the CD, introduced in 1982, is not much different product-wise from the LP, which has been the standard musical format since 1960 or so: a disc with music, a cover, maybe a booklet, that's it. Now that (as I would like to assert) the music consumption in our culture is primarily private, these accessories are not as valuable as they once were (whereas before you may pass around the album to your friends, let them borrow it, put it on your wall etc.)... meaning that the prototypical listener-consumer is now focused almost solely on content and how much of it he has. The quality or type of the content is almost (note I say almost) inconsequential so long as it is dispensed at an appropriate cost ratio.
This, finally, brings me to my point of oh so long ago, which was if you remember
so, wouldn't you say something is wrong in the music world today if by chance i happen to hear about or want to hear a band or artist, but cannot easily find an auditory example of their work. Seems preposterous to me in this day and age. Why can't some works be for download and some works be for sale?
I find it hard to believe that the music industry has been so slow to adopt an economic model that assesses these cultural truths, when it is obvious that they have been evolving for so long. Business is about anticipating and preparing for trends (upward and downward) and that someone somewhere has not seen this coming I can't believe that there hasn't been better preparation for it.
1. There should be a way to download at least one song from every artist that wants to sell a disc and it should be free. It is not stealing, it is really no more than the equivalent of a trailer that Hollywood puts out on Apple.com.
2. Music should be cheaper and/or the primary "product" sold by the industry should have a perceived "added-value" that makes it a worthwhile expenditure.
3. More and varied music should be made, and some of it (in accordance with 1.) should be available for free. Moreover, the amount of music produced should be in accord with the listener-consumer's ravenous demand for new content.
In this way, I think music can return to being more primarily a public pursuit. I would contend that this would be a desirable trend for the music industry and music itself as I believe that the evolution of musicality is better served when its consumption plays out primarily in the public spher (especially given the new formulations of "public" possible on the Internet.
Or something like that.