The Gang of Four's Dave Allen wrote an interesting take on the relationship between the Web and music, taking up the thought that "The browser is the new iPod." As a consequence of that, he foresees the death of the album as the organizing principle for salable music. In the comments section, he writes;
Music recorded on analog 16 track machine, and not dumbed down to 44.1khz to accommodate transfer to crappy CD, pressed direct to a metal mother from 1/2″ tape and then pressed to vinyl which comes with MP3 and Lossless files, is the future I look forward to..or rather a reversion to the past…
Whether he realizes it or not, the future he envisions is more retro than he writes. The album became the dominant musical mode in the 1960s; before that, the single was the dominant mode, and albums were often collections of singles padded with a few extra songs. The Beatles did a lot to advance the album as the mature expression of an artistic vision that couldn't be contained by a single or EP, and the industry became so invested in the concept that it phased out the single in the early 1990s, in effect forcing people who only liked a song or two to buy the album. That short-sightedness in effect forced the creation of a music underground so people could get what they actually wanted.
The return to singles and EPs as the dominant mode of music production makes a lot of sense, moving the artist from an industry-dictated production schedule to a creativity-oriented one - cut songs when you've got them - but it doesn't necessarily mean the album is dead. There were at least two different kinds of consumers in the '60s and '70s - those who wanted the songs they liked to sing and dance to, and those who thought of the album as art (to simplify the terms, perhaps unfairly) - and there's no reason to think the latter audience will disappear. Albums cost more than singles and required a greater investment of time to hear, so they were never the easiest, most efficient way to consume music. They provided a different experience than a single did, and that difference will continue to exist and be addressed. But artists who don't have album-length thoughts or album-oriented aspirations will no longer have to pollute the market to have a place in the market.