But for everyone else, the CD still lives. While CD sales from the majors continues to fall, it's still a viable format for music, at least on an indie level. Why?
1. A CD is still a calling card. It's really difficult to get a review, especially in print media, without a CD.
2. A CD makes you viable. Downloads are great but, at least for the foreseeable future, you don't have what's considered a "real" release until there's some physical copy. It could be a vinyl record (there's still a market, believe it or not) or it could be a CD, but only when there's something for people to hold in their hands will you be taken seriously.
3. Some audiences prefer a round, shiny disc (I mean a CD). It's true, and it's not just an age thing either. The audience for some types of music (metal for instance) just prefer the CD and could care less about the download. Some elements of the audience couldn't be bothered with downloading.
4. A CD is a collectible. Some members of your audience may buy the download and buy the CD as well. It's a keepsake (if you're really into the artist) especially for the true fan. If you're really hip, you'll give them the MP3's along with CD.
So it pays to have a CD as a part of your marketing strategy. You'll reach an audience that may be out of reach otherwise.