EVERY decade this question comes up. A weak season, a string of flops and the old refrain comes up again. Then a couple of big blockbuster hits come along and we get "there's life in the old form yet."
It will never truly die, but it will change. Look how much it has changed in the post 9/11 age.
More shows now seem to poke fun at the art form, which to be truthful sometimes does get taken a little too seriously.
Since shows like THE WIZARD OF OZ and BABES IN TOYLAND (both 1903) Broadway audiences have always loved big specatcles. We still have those (BEAUTY & BEAST, LION KING, WICKED)
From the eary years (1900-25) Broadway loved romantic operettas, (THE DESERT SONG, THE STUDENT PRINCE) and we still have those (PHANTOM OF THE OPERA,)
In the 1930s satires became big business (OF THEE I SING, AS THOUSANDS CHEER) and we still have shows that poke fun at love, life and politics (AVE Q, PRODUCERS, SPAMATLOT, DRS)
Traditional book muscals in the OKLAHOMA! style remain popular in revivals (FIDDLER) and new productions (LITTLE WOMEN)
In the 1930s there were revues and shows that tried to incorporate current pop music or at least music in that style (like say, THE SWING MIKADO) althogh "songbook" anthologies like MAMMA MIA and MOVIN' OUT are a relatively recent concoction.
What is missing from the mix right now are serious story-driven musicals where the songs serve plot and character. The last really good one in this vein was probably RAGTIME (1998-2000) but no doubt others in this style will be along.
If any one thing is hurting the creativity of Broadway writers it is audiences who just want to be "entertained" and do not want to waste time thinking about the ideas that theatre can explore when it is at its best. Nor do audiences seem to want to get too emotionally involved. Again this is post 9/11 fall-out: People were hurt very badly and don't want to leave themselves vulnerable.
But when everything is in balance, when all the theatres are booked up, when there are shows to satisfy every taste...then Broadway will survive.
Cast albums are NOT "soundtracks."
Live theatre does not use a "soundtrack." If it did, it wouldn't be live theatre!
I host a weekly one-hour radio program featuring cast album selections as well as songs by cabaret, jazz and theatre artists. The program, FRONT ROW CENTRE is heard Sundays 9 to 10 am and also Saturdays from 8 to 9 am (eastern times) on www.proudfm.com