From what I have seen, the change to digital has not affected the fundimentals of the silver market.

Photographic silver was fairly well recycled, so it was a closed system, essentially.

A whole new market for anti-bacterial silver has opened up. Silver is used to coat surgical instruments and is even being woven into fabric for everything from sheets to towels to socks. You might have seen antibacterial socks in catalogs. That silver does not get recycled, it gets lost.

Silver ETF's are taking tons of the metal off the market. We've only had them for several years now but they already hold a big chunk of the available supplies. (But they might also be leasing the silver out the back door. /rumor.)

Many analyists claim there is actually more gold stockpiles than silver. Think about that. The historic ratio is 15 oz Ag / 1 oz Au. Right now the price ratio is 35 to 1, down from 60/1.

It is a fascinating topic. Most of it is way over my head. I'll dig up some links, if you are interested.

Update:

Ted Butler's 2011 speech is a good overview of the silver situation. As the regulators are looking into this, he might be on to something.

A more recent article with more detail.

Somewhere I have a great link to a discussion of the Hunt Brothers' silver game...I'll keep looking.

Update the second: link fixed