They said it would kill music. They said it would mean bands would stop forming. They said the sound quality was rubbish. And after the greatest change in how we listen to music – the internet – was complete at the end of the decade, it turns out they were wrong. So, so wrong.

At the beginning of 2000, I still had a Sony Discman that skipped every time I walked a little bit too fast. My Minidisc had pretty much become obsolete already. To the industry, I remained a captive audience.

I had to pay for a CD I'd read about and listen the hell out of it before finally admitting I'd bought a turkey recommended by a fool. You could burn some CDs if you had a burning machine but not many did. When I now look at the hundreds of CDs I bought in the 1990s, and to a lesser extent the 1980s, there aren't that many I still listen to today. Now, however, my iPod is my umbilical cord. Launched in 2001, the iPod only really took off two years later with the opening of the iTunes online store but by then most people were warming to the potential of digital.

Suddenly bands just started appearing out of nowhere. Everyone was listening to whatever the hell they wanted. There was no real common denominator. Some thought the shared experience that united music lovers as much as sports fans would prove its undoing. But that was wrong too.

If the noughties will be remembered for one thing, it was the exponential rise of the live music scene, and in particular the festival circuit.

Remember Witnness, spelled with a double 'n' so that we would automatically think of a particular stout every time we saw the logo? Excellent?

Witnness's first line-up, in 2000, either confirms how dull music was at the end of the 1990s or the fact that the really big names hadn't cottoned on to the new spending power of music lovers in Ireland. Travis reminded us all why it rains on us every summer, while David Gray built on his newfound status as the bestselling artist ever in Ireland.

Back then, and for the next two years, Fairyhouse was the location, Gwen Stefani climbing the rigging with No Doubt being the highlight. Oasis headlined and the crowd snored as usual. By 2003 the festival had been moved to Punchestown, changing name and sponsor to Oxegen, which kind of reminds you to drink a particular lager, doesn't it? From those beginnings, the event has become such a staple of the summer that it would be unimaginable were it to disappear. And of course, just when Oxegen started to get almost too big for its own boots, along came the Electric Picnic in 2004, which merely forced every live operator to keep raising the bar.

While the internet was by this stage freaking out the now-merging major-label record companies, something else funny happened. It may have been two decades since Motorhead and Madness played on The Young Ones, and the music video may have all but died out after the 1990s, but television suddenly became really important again. Remember Grey's Anatomy and how it virtually broke Snow Patrol and Damien Rice? Then there was Bell X1's moment on The OC. Status Quo even turned up on Corrie, for God's sake.

And then we had the curious case of the vegan electronica nerd. Today Moby may seem a bit of an anachronism but his influence on the decade was huge. In May 1999, he released Play. It sold only 6,000 or so copies worldwide in its first week. Almost a year later, though, it re-entered the charts and went to number one throughout the world, selling on average 150,000 a week. The reason: Play was the first album ever to have all of its tracks licensed for use in movies, television shows or commercials.

Play became the biggest-selling electronic album in history (at more than 10 million copies) and made a pop sensation out of Moby. But a backlash wasn't far away. As punters grew weary of hearing 'Porcelain' advertising cheese and cars, he was somehow considered a 'sellout'. Something similar happened to the Dandy Warhols with 'Bohemian Like You' and a certain mobile-phone company, but these days ads are simply a springboard for artists to get heard. Whether it's Laura Izibor advertising insurance or Paula Flynn bigging up mineral water.

Ultimately it came down to money and how to get it. The opening up of the music market also led, curiously, to a reassessment of so-called indie cred. It was no longer advisable for artists to scratch around penniless waiting for their uniqueness to be recognised. If you wanted money you had to go and earn it first. Then maybe you might get signed.

It may come as a surprise to learn that the bestselling album of the decade was, er, The Beatles' greatest hits compilation 1, which sold 11.5 million copies – a paltry amount compared to previous decades. But the bestselling artist of the whole decade was Eminem. Remember him? Marshall Mathers, with two albums released in the noughties, sold more than 32 million albums before cracking up and becoming a Slane no-show.

And as digital music's relentless march on the record industry gathered pace in the final few years of the decade, it is notable that only a few artists' albums managed to rack up over 10 million in sales, largely through iTunes. These include Norah Jones, which probably goes some way to explaining the demographics of the music-buying public; ie the older (and perhaps more conservative) you are, the more likely you are to pay for digital music. Therefore, it comes as no surprise to learn that, according to music-data-gathering firm Nielsen, the bestselling album in iTunes' history is Coldplay's Viva La Vida.

Of course, to accommodate our changing habits, the internet provided us with all sorts of new reference guides and critical resources. As with everything in music, each one became cool until enough people made it popular enough to render it uncool. So Pitchfork, which was cool for about two years (and some terrified 'mainstream' critics plundered its review sections looking for what was cool), gradually gave way to sites such as Stereogum. And so it went and still goes.

For some musicians, it was a decade of extreme promise, followed by massive disappointment. Again the changing nature of how we listened to music (and our shorter attention spans) was a factor but more often than not, those involved simply blew it. Damien Rice is to the fore here.

Having sold around five million copies of his debut album, he followed it up with a dreadfully sombre effort and decided to not offer himself to do one iota of promotional work. While I would have huge admiration for his self belief, it was a disastrous miscalculation on his part. In a similar enough ballpark was Paddy Casey, who could do no wrong in the early part of the decade, but seemed to belong to another age by the time he released Addicted to Company in 2007. The Strokes have gone from being the coolest band on the planet to now being a bunch of side projects by its hardly-speaking members. The Streets? Mike Skinner's ubiquity and subsequent decline pretty much mirrors the travails of rap throughout the decade, as pop has ironed out its edges and taken to the dancefloor, where it has flourished.

There are too many hard luck stories to mention here but spare a thought for Ryan Adams, The Thrills and, yes, the biggest disaster of the decade: The Darkness. Where did it all go wrong, Justin?

It's safe to say that no other decade has seen the taste barriers come down in such a healthy manner. Nowadays you wouldn't think twice if you saw someone at a Mastodon gig and then the following week spotted them at Joanna Newsome or Sigur Ros. And then, of course, there is U2 – who seem to remain the most eternal band on the planet. This month, all three of their albums released during the noughties made it onto Rolling Stone's 100 greatest albums of the decade list. Weren't they one of the first bands to endorse the iPod with their own customised device?