Other then price and economy, there are two reasons for the industry-wide drop in sales.

First of all, people are saturated! We have too many CDs in our homes already! Where do we put them? How do we manage them? There are only so many CDs we manage well anyway, keep near the CD player or in the car. What do we do with jewel cases when there 10 or 15 of them in the car? Or 150 of them in the living room?? And what about those 20 or 30 CDs that turned out to be crap, or the ones I just don;t want to listen to anymore?

CDs are a pain-in-the-ass. I really want to be sure I'm going to listen to it, if I'm going to buy it.

And Secondly we are rapidly moving to alternate media for music. I am certain a majority of people reading this thread have some music on their PCs and at least half of them have it on their iPods and similar devices. Yes, CDs can be the initial delivery mechanism to those alternate media devices (ie, buy the CD then rip, store and download MP3s to your computers, iPods and other devices). So people don't have to just buy CDs anymore.

I've started putting out business cards with my CDs and telling people to go and find my albums on iTunes. I'd rather they bought the CDs from me, of course - but especially the younger ones, they would prefer to right to their iPod.