Questioning the future of something that is to be found all around us in everyday life needs some explaining. I think there's a good chance that we will, this decade, see a serious drop is CD sales and use. CDs are still common, and they're good at what they do, but they're no longer the best—they've been beaten in every way.
They call us the iPod generation, or, if they don't, they might as well. That's how we relate to music: everyone has some manner of MP3 player, everyone has an internet connection, everyone has a computer, and those tend to have large hard disks: When we listen to music, most of us listen to MP3s, not to CDs, and more and more people are discovering that it's possible to legally download them—on the one hand, there are those that have been pirating music for years, and on the other hand, there are those that used to buy CDs, and then started ripping them. With every iPod owner being an iTunes user and Amazon providing MP3 downloads alongside physical media, it'd be hard not to notice that the way music is being distributed is changing.

CD stands for “compact disc”. True, at 12 centimetres across, it really isn't a large medium, but, to put that into perspective, nowadays, you can store the MP3 equivalent of over a hundred of them on a chip smaller than a dime with normal consumer equipment. CDs aren't even that useful any more: the MP3 player and PC having become the tools of choice when it comes to listening to music, a new CD usually ends up being ripped, possibly passed around to friends, and then shelved with the other dust magnets.
True, CDs offer really high-quality sound that an MP3 can't. But, let's be honest: have you ever noticed the difference between a CD and a good rip or commercial download? I'll give you that your typical Napster file might not be that great, but most of us have no chance of telling compressed audio files from compact discs by listening. The true audiophile might prefer a CD over an MP3, but then, more often that not, we see audiophiles declaring that vinyl sounds better than CDs. I also think it's possible that, soon, some online music stores will be offering CD quality files for those that will satisfy those that once shunned MP3s in favour of shiny round 12cm plates.
Vinyl records have been having quite a renaissance in the last few years, and I think it's fair to say that this is part of essentially the same movement away from CDs—in a way, gramophone record beat CDs and don't so much as glance at the unworthy MP3. There is one thing that digitally distributed music does not have, cannot have: a physical form. We just like being able to touch things. Being able to physically and separately handle, display and admire a record appeals so much more to our collectors' instincts than simply fondling a tiny box that blasts photons at us from minute pixels. I find it adds a whole dimension of value to the music that it just doesn't have when I tell amaroK, winamp or rockbox to open a certain file. One could say a physical record honours the music and the artist a lot more.
In that area, however, it is not the CD that trumps, it is the gramophone record. Vinyl records are larger, there's more to look at, more to touch, not just that flimsy little booklet. You actually see it while the music is playing, and anyone can understand the basics of how it works: a lot more down-to-earth, appealing so much more to our senses, gramophone record are a lot more “real” than those tiny, silly CDs. I think that we are going to see, and seeing right now, a development away from them in two directions: the “mass market”, that gigantic group that runs around with iPod & Co., donning earbuds in the tube and connecting their trusty companion to their home and car stereos, will pay for more and more downloads, while that niche of audiophiles, music enthusiasts and collectors will develop their, or should I say our, preference for “the classic”, vinyl.
A great example of this development is the La Roux single Quicksand: in December of 2008, it was released as a digital download and as a 12 inch vinyl EP, not as a CD. (There has since been a re-release on CD—a year later)
What about you? How do you buy music?