Research by George Zieman gives the true reason for falling CD sales: the major labels have slashed production by 25 per cent in the past two years, he argues.Other obvious reasons include a general decline in the economy as a whole, and alternatives to music listening such as cell-phone usage. I have observed the same thing that Dan Bricklin wrote about in The Recording Industry is Trying to Kill the Goose That Lays the Golden Egg
There is an effect that I noticed while walking around the streets of New York City, and then again in Toronto, on campuses, and elsewhere. Less and less do you find people walking along, in their own worlds, listening on headphones to personal music devices. More likely than a Walkman or Discman, I see people with cell phones clutched to their ears.
Given all the other evidence, I believe that music file copying as a form of advertising is likely what is responsible for the decline in CD sales being as minimal as it has been.