Here's an interesting article from Salon about classical music and its future in the modern world. There's also a link at the bottom of the article to a much older article (in the form of a dialogue) on much the same topic. One point that neither article makes is that classical music probably will survive as long as people continue to want to play and listen to it. It's not a perfect analogy, but people still read and enjoy Shakespeare despite the fact that no-one is writing drama in that style anymore.
Rather, commentators seem to be upset because there is this
notorious lack of connection between modern composers and audiences.
This situation is blamed on different people depending on who is
doing the blaming. Either the masses have turned into Philistines,
or the composers are arrogant, and unconcerned with popular appeal
in the belief that they are composing for posterity. I don't care
which is true. The real question is:
are there great works of
musical art being created today? If the answer is no, well
that's a shame, but there is still lots of classical music out there
which I've never heard, and that stuff would be new to me. So, my
yen for novel musical sensation should be satisfied, and classical
music isn't really dead. Not only would my listening to
performances of known works keep the music alive, but so too would
the enjoyment that others take in performing these works.
If the answer to the question is yes, then I get all the advantages of the situation where the answer was no, along with the slightly niggling worry about how I'm expected to find the good new stuff without having to listen to too much dross. The population of the world is bigger now, so there's more music in absolute terms, but I'm an optimist so I believe the proportion of good stuff is probably roughly the same as ever it was. The only important principle is that the good new stuff is not going to necessarily come in classical forms. Given a changed society, there is no guarantee that the real artists will be well-represented in the classical arena.