I think music staring going downhill when music was no longer an audio only thing. Once bands were expected to make videos, posters, and "act" on stage, suddenly a lot of musicians had problems getting into the business. They want to make music, not become pseudo-actors.
Metal and grunge still happened in a music video era.
I think a bigger thing that happened was the collapse of the CD. From that point, the new acts that the industry seemed to focus on were individuals instead of groups.