Definately downloading. I haven't purchased a CD in years. Besides, in the tiny town I live in, the 1-2 music shops we have stock mainstream crap, and mainstream crap only. Anything I listen to would require being ordered in, which I can't be assed doing/waiting for.
15min download > 2 week wait
Also, the fact I don't own a CD/record player means they'd be useless to me. I'd encode them once to the PC, then they'd sit and gather dust...
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