I haven't really been going to local stores to buy CDs, so I haven't yet witnessed the shrinking shelf space. I buy CDs when I can. The only time I don't buy CDs (or other physical formats) is when it's content that's exclusive to a downloadable format.
While I prefer having something I can hold, most of my listening is from the ripped copies of the music. I like music on Blu-ray, but it's always better if it's Blu-ray+CD so I can rip a version of it.
The thing I DO want to see take off more in download form is music videos. I would love to have a good store for downloading a wide range of music videos in high-def which I can then play jukebox-style... if I ever have a party.
