could online releases spell end of cds?

in the sunday herald i found an article updating the situation- warner music announced it was creating a digital only 'e label' to distribute music without a corresponding cd album release. this would of course cost money and operate much like itunes in the US.

the article outlines their main justifications for the shift
1- it is much cheaper than producing cds, cases, leaflets etc
2- it allows new artists to release a small number of songs and still be heard ie they dont need to release a whole album
3- they think it will nourish creativity by removing the industrial pressures of cd production and distribution costs so that bands wont sell out to become commercially viable
4- they also think it will stop or decrease piracy, though they unfortunately dont say how...

what the article doesnt mention is the format of the file, which of course will be the the key to its anti piracy function. like itunes, perhaps the downloaded song may be restricted to a specific use like a coded mp3 player or computer. they make no mention as to the rights involved when a consumer puchases a song. im very curious- dont we have a right to backup our own files? a cd would be the best way to do that- perhaps it will be only writable as a data file. an mp3 player can be hooked up to any decent stereo system to be played in shops, restaurants, whatever. how would they regulate its use and prohibit copying? surely they must be turning a blind eye at some point with the "if u cant beat em, join em" logic, hoping to simply cash in where at all possible on a platform which has already neutralised their dominance over supply. does anyone know anything about this format they will use, or if they're using a new one at all?