Yes and no.
The same thing was said about the Internet and 24/7 cable news vs. traditional newspapers. Now newspaper reading has indeed declined a bit but many predicted they'd be gone by now, made obsolete by newer technologies. Indeed, the introduction of television in the 1950s was said to kill off the motion picture studios.
The introduction of new technologies usually does cause established industries to make changes. Market share is lost. But old industries do not disappear if they evolve.
Television did help kill off some classic magazines like LIFE and the Saturday Evening Post. But the magazine world is still quite busy. Indeed, LIFE magazine is somewhat still with us, only in a different form called People Magazine, same publisher, and doing very well. (We don't like to think of LIFE as being about celebrities, but a big part of it was Hollywood and curiosity "freak/oddball" coverage). Maybe local TV viewing is down, but local TV news is now a profit center, years ago it was done at a loss as a public service.
Certainly some new music will be distributed by electronic means outside the traditional channels. But the old-stype distributing complex--the record companies--shouldn't go away.
When I was a kid I went to a record hop party and the DJ gave out 45s to every guest. They were demo records prepared by aspiring artists. He had tons of them. They weren't very good. The point is that there are lots of aspiring artists out there, but most just aren't up to high standards to "make it" nationwide. The record companies and radio stations, like book publishers, perform of necessary function of weeding out and polishing up new artists. By the way, there are plenty of artists who become "one hit wonders"; they'll do one song that will popular for years yet they'll never do anything else despite being promoted.
Popular music isn't about purity or talent. Music lovers don't like groups like the Backstreet Boys or N Sync because they were artifically "invented". That is irrelevent. Popular music is what the word says, "popular". It's what sells. Frankly, as a listener, I don't care who the Backstreet Boys really are; I happen to enjoy listening to their music. Conversely, I don't care about Eminem's struggle as a poor white kid trying to get into rap music; I don't like the sound and don't listen to it.
Radio stations live and die by ratings. The people decide for themselves.