I'm not sure.
CD quality downlads have been around for a while, but I still like to like to own music in a physical form and know that a lot of enthusiasts feel the same way. It might be part of human nature or merely a psychological attachment that we learn. Until the majority of consumers are made up of people who only download music, I think some kind of solid format will survive.
I somehow doubt that higher bitrates will make much of a difference. Most people can't hear the difference - look at what happened with SACD & DVD Audio. For the most part they failed because of a poor range of releases, but the final nail in the coffin was the fact that hi-fi manufacturers were able to make CD perform to such a high level that the benefits of SACD and DVD Audio became negligible.
My biggest concern is a general disinterest in audiophile quality music. Kids today (
) demand instant gratification and don't seem to care about sound quality. It's very depressing to see a group of kids listening to the tinny audio from the speaker on a smart phone without any regard for how bad it sounds. Higher bitrates are completely irrelevant in that kind of situation.
The worst thing is that some engineers will compress the hell out of music in order to make it sound better on mobile devices. The end result just sounds bloody awful on a good set of separates. I have however noticed that this trend has started to fall out of favour - probably because most of the musicians I listen to are aware of the problem and care a great deal about the sound of thir recordings.
