I think it's Apple's own fault the iPod line is dying. The iPod Nano and iPod Touch haven't been updated for 2013, the iPod Classic is the same from 2009, and the iPod Shuffle is a $49 music player that nobody wants to buy.
They could easily reinnovate the whole line up, and bring some excitement back to the iPod. The watch-like Nano was very exciting for so many people, with customizable clocks and so many 3rd party watch accessories; the clip had endless possibilities, unlike the new Nano which has limited capabilities plus no one is going to watch video on a 2.4" screen. They could've introduced new size screens to the iPod Touch like a 5" or even a 6" iPod Touch that is perfect for consuming media in 16:9, because the iPod Touch doesn't need to be a one-handed device like the iPhone. For the love of God, Apple, please update the iPod Classic; updated design, 128GB or 256GB SSD storage, because there is still a market out there for people who still demand big portable storage for their music. Apple can do so many things with its iPods, but they're just lazy to do anything about it.
Don't blame the market for the lack of interest in iPod. Apple has clearly shown to their consumers that they don't care about its music devices anymore. Yes, the world has shifted for integrated devices with music and streaming services, but there is still a world for people who want cool NEW iPods and massive storage.