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you're right things are cyclical, but I don't see your scenario happening. being able to buy single songs harkens back to "singles" of the 50's and 60's. That concept has been around since recorded music started being commerciallized (78s could only contain limited amounts of music).
Higher definition audio formats have been around for quite some time. We do 10.2 surround sound mixes for some of our work. But in the real world it is about lowest common denomonator and consumer choice. You will likely see better compression algorithms, but until multidimensional headphones get better, plain old stereo will continue to rule, and CD is "good enough" for 99.9% of the market. Hell, look at sat radio. I listen to it for the choice even though the fidelity is worse than FM.
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