Well, that was bold!!! (...I like it!)
I personally do think art music still exists -- in fact, I think there's a great deal of it, from many different walks of life. Now, please understand that I'm not being naive. I realize you are using that word in a very specific way. As I understand it, art music exists when the music enters into a self-referential dialogue with its own history and means. Western art music is music which makes reference to other music, structures itself according to, or in reaction to, previous structures, and constructs new meanings based on the inherited meanings. All of which, of course, is regulated by certain cultural forces of the time.
This is a _very_ small nutshell, so please expand!
Now, why do I say there's actually _more_ art music today? Well, because I truly believe that a great many of today's composers see very clearly that the era of radical, technical/theoretical innovation has passed (except perhaps in the area of electro-acoustic work - but let's limit the discussion to western instrumental music, for now). In seeing this, and likely reacting to it, they also see that everything they write has a history that extends, most likely, far beyond their individual lives. Since there are 'no new ideas', it becomes necessary to discover the link between the ideas you have and the larger theoretical movements that have come up during the relatively short history of the form. I clearly understand, for example, the connections between myself and Mahler, Berlioz, Prokofiev, Stravinsky... and more recently Lutoslawski, some Tippet, Gubaidulina, Sorensen, Saariaho, and Rihm, the last four of whom are alive, hopefully well, and still having a strong influence on my musical thought (if not so directly my music) today. And even though others may not hear these connections, they are there nevertheless, informing my musical decisions on a daily basis. Thus I do, in a very real sense, write music about music for the sake of music. And any listener with a fair degree of familiarity with this history, will be placed in the centre of that dialogue, where s/he can follow along, react, and make evaluations as s/he sees fit. This is, I think, what makes it "art" -- gulp! [and so the flood gates open!]
[to be continued, I'm sure...]
But it is for the same reasons that I feel there is very little art in contemporary film music. Simply put, there are too many composers whose relationship to this history is not a dialogue, but simply a form of paraphrasing (like the Vaughan Williams mentioned elsewhere). When new music simply apes a previous form, without giving anything to it, then the form itself begins to decay... Now, it could be argued that since film music has a particular "function" (like pre-art music written for court dances and the like), that it is really not intended to be "art" at all. That is a totally valid argument, which only points out further that perhaps I'm not particularly interested in film music... perhaps....
ouch!
J.