I think that digital recorded music is going to be going entirely online in the not too distant future. Bandwidth is only going to keep improving, and it will only be a matter of time before you'll be able to download an entire lossless format album in a second or two. Illegally traded digital files will likely stay with the MP3, (or similar) as the general populace (though certainly not this crowd) doesn't care about fidelity to a high degree.
That being said, other mediums will survive in niche markets. In the right area (trendy, affluent) a used/new CD store could still do well. Record stores as well, especially online.
What ramifications does this have? The end of albums. People cherry pick digital files out of albums. A few artists have openly said they're no longer going to produce albums, only singles.
Of course, this doesn't work for everyone, but, I believe, this is a fairly small audience. These people are the reason the LP has come back into style. They're tangible. They have great cover art. They actually have some resell value, which I argue digital files really do not. Personally, I feel like my future as a music listener will be deeper into the LP format with a few digital files here and there.
CDs ultimately won't hold up to the LP format, even if CDs are inherently better. They lack the LP's tangibility. You'll be able to get the same files online. There is money to be made in LPs, I believe, for a long time, to niche markets, who want tangible liner notes, actual albums, and a deeper connection to the music.
My 2 cents.