While there is no doubt a drop in postal service due to the digital age, this article sums up exactly the problem right now:http://thinkprogress.org/economy/2011/09/28/330524/postal-non-crisis-post-office-save-itself/?mobile=nc"USPS was forced to prefund its future health care benefit payments to retirees for the next 75 years in an astonishing ten-year time span ó meaning that it had to put aside billions of dollars to pay for the health benefits of employees it hasnít even hired yet, something that no other government or private corporation is required to do."
Not to get political, but this request was a bit outrageous. It's likely that USPS' revenue would have continued to decline regardless but this was a huge blow to the USPS, just made the whole entity fall faster.
That said, I don't know how the USPS is suffering. I get mail, I send mail, every time I'm at the post office there's a line and most days the little substation in my grocery store that I regularly use has boxes damn near up to the ceiling. The volume of parcels I see is huge! I'm no expert on the whole system of mail service, but there sure does seem to be plenty of people mailing stuff.
I also agree with Drone On - digital files are not my thing. I've bought 3 digital albums ever and that was because they were only available that way. Unless you're starved for space, I do not understand the lack of love for a real CD or LP. I think there will always be demand for the physical product but, obviously, just not as much. The record stores around here seem to still be doing pretty well... but the post office price hikes could absolutely devastate international commerce, if you ask me.
Edit: Well, in the very article I link to, Ralph Nader had this to say: "As consumer advocate Ralph Nader noted, if PAEA was never enacted, USPS would actually be facing a $1.5 billion surplus today."
So maybe USPS would have been in the black at this point.