When I worked as the classical music director for a college radio station during the later 1980s and 1990s I marveled at the way the students who maintained the library put recordings into categories. There was jazz, cool jazz, bebop, new age, folk, hard bop, blues, hip-hop, soul, rock, world, and a whole slew of modifiers that divided each "genre" into specific sub-genres. I believe doing it gave the students who assigned the recordings their labels a sense of accomplishment and importance.
Then there was "classical," which was divided into two categories: general, and "short-takes." As far as most of the students were concerned (except for the ones who I worked with) "classical" was just one thing. Boring is one word that comes to mind. I never really let it bother me, since most the students I worked with found out that their preconceptions were wrong. After spending a few months working on the "classical" music programs, some of them even became knowledgeable, and some found music that they really liked in the vast sea of the "classical" section.
My music appreciation students begin every semester with similar preconceptions about this music we insist on referring to as "classical." Most of them come into the class knowing country music and whatever popular music happens to be saturating the commercial airwaves at the time. A few of them are eclectic and have developed specialized tastes, but they still initially see the vast world of all that is "not classical" as having far greater variety than the music they will be learning about in class.
I take great pleasure in breaking them of this preconception, and always get a mid-term "lift" when I read the papers they write about their experiences listening to the radio (we have two NPR stations in our area) and going to concerts. Nearly every student is surprised at the variety of music that he or she hears, and nearly every student is pleased that s/he can identify music from the different periods we have studied (and at mid-term we haven't even gone beyond the Viennese Classical Period--the only application of the word "classical" I feel comfortable with). Semester after semester the students who stay in the class (i.e. the students who do the assignments and come to class) let me know how surprised they are to find that they actually enjoy listening to "classical" music.
There are probably more excellent "classical" recordings being made now than ever before. More people have the tools and practical knowledge to make a recording sound professional than ever before, and, with a little bit of money, people can easily create their own recording labels and arrange for their own marketing and distribution. "Classical" recordings are still a small sliver of the genre-rich recording market, and though there are a vast number of "stars," there are only a handful of living "classical" musicians who are recognized by the general public. Those musicians are people who have been well marketed, and many of the most prominent "classical" stars are simply not the best musicians. Some of them are downright lousy.
High-profile people in the musical blogosphere talk about "classical music's problems." They have been talking about them for years. Some people find fault with the way organizations that perform "classical music" promote their concerts and reach out to audiences. Others find fault with the kind of programming that orchestras offer. Lately people take issue with the way managers of "classical" organizations treat the musicians that they employ.
These are not "classical music's" problems. "Classical music" is not an institution. "Classical music" is not an organization. "Classical music" is not dying, because "it" is not a living organism.
Musicians simply go on with their work, whether it is something they can make a living from or not. Some play beautifully, and some play well. Some don't play so well. Composers write music because they write music. Some of it is great, some is good, and some is not. A small amount of the music that people compose gets recorded, and relatively little of it gets performed, but people still do play newly-written music for pleasure. People play older music for pleasure too. They take lessons, play with their friends, play concerts for audiences large and small, and they practice.
What we do is really not that different from what people have always done. The problems I encounter while practicing a piece of Mozart are the same problems that countless other musicians have encountered during the 19th century and the 20th, and in all parts of the world. The joys that I get from getting a passage to sound good through analysis and repetition are the same joys that countless other musicians have enjoyed. The intimate exchanges that happen during concerts are the same kinds of intimate exchanges that have always happened, regardless of the size of the hall, the size of the audience, or the size of the city.
"Classical music" doesn't have a problem; just a lousy name that reduces the size and scope of centuries of music from all over the world so that it can be safely tucked away from view and effectively marginalized.