Seems unlikely given that the CD market is still worth more than the download market. I think the balance is predicted to tip in favour of digital downloads by the end of 2012. That means that in the timescale predicted by this article (which quotes no figures or sources beyond it's own editor's prediction), major labels will abandon a revenue channel worth about $2.5bn dollars. Why would any business do that?
The article also misses a few key points about the benefits of the CD model to a label. This sentence:
"It's a move that makes completely sense. CD's cost money, even when they don't sell because there is stock storage to be paid; a label also pays money to distributors when CDs get returned to the labels when not sold and so on"
isn't solely frustrating for being a graveyard of English grammar. It also ignores key factors in the way a modern business operates. Yes, you have to pay storage on unsold CDs, but a good sales manager will keep a close eye on stock and demand. It's not the massive drain on resources presented here, and modern printing and shipping facilities mean that the just-in-time approach of stock management is the norm. More importantly, what you get with CDs that you don't get with downloads is a whopping dollop of cash right at front. When a record label sells 40,000 CDs to Amazon's warehouses, that's a massive injection of cash right up front that immediately goes towards covering the costs of creating the album. Great! Now you can pay all your suppliers and staff! What you get with digital, is that money coming in in drips and drabs over the course of several months. Alot of people overlook the effect that digital distribution has on a company's cash flow, but for many businesses, that can make the difference between going under and continuing to operate.
"In short, abandoning the CD-format will make it possible to just focus on the release and the marketing of it"
What the writer mis-understands here is that the work you do with record stores IS the marketing of it. If labels abandon physical sales, they miss out on a big opportunity to create visibility. CD sales will probably continue even afte they start losing money (which at circa $3bn a year, they ain't doing yet), just because a store front or shelf display is such great visibility. When a major album comes out, they're all over HMV, and that's a great boost for CD sales and itunes. Without that, you lose out on an uncommonly cost-effective marketing channel that talks directly to your core audience. If someone can come up with a way to replace that level of marketing firepower, then they can talk about the death of the CD, and also get a job as marketing director at EMI.