Not exactly true, the art industry is far from 
dead.  Now it's the time to separate the good 
art talents and the people who don't belong in 
this field.  I have seen many people who claim 
themselves as animators like the ones who work for 
dot.com companies doing flash animation before, 
many of them suck with no talent.  They got the 
jobs before because the internet companies at that 
time were hungry for people regarding what talents 
those people were.  Now it's the survival time, 
the good ones will stay, the bad ones will have to 
change field.

Anyway, you may consider to go into 3D animation.  
The movie and video game industry are still doing 
great, they're still looking for many 3D artists.  
If you're good in illustration, you can 
also consider to become a texture artist, 3D 
models always need good texture artist.  The art 
field is far from dead, you just have to adapt the 
changing environment for different type of art 
jobs.