If my personal experience is at all similar to the norm, MP3 directly leads to a lot of CD purchases. A few years ago, I hardly listened to music at all. I only liked a couple of bands which I had grown up with, and never went out and tried listening to new music. When I first heard of MP3 about three years ago, I started downloading lots of music, trading it with friends, getting more of the stuff I liked, deleting the stuff I didn't like, etc. It was way better than the radio: when I heard a song I liked I could listen to it ten times, not just once, and I could get other songs by the same band almost immediately.
Within a few months, I started buying the CDs of my favorite bands. Now I have probably sixty or seventy CDs, representing a $900 investment. I'm not sure what made me buy CDs instead of just keep getting more MP3s. I had recorded and live MP3s of all the Dave Matthews Band songs before I bought a single album, but now I have all their albums, a couple of T-shirts, and a concert ticket stub. I guess that I just really liked this and other bands and wanted to support them by buying the CDs. Plus I liked the cover art, inserts, etc. I don't think I made a conscious decision to start buying CDs, it just seemed like the natural thing to do.
It seems to me that MP3 improves and promotes music just as survival of the fittest causes organisms to evolve. Listeners download songs off the internet before they buy CDs. If nobody likes a band's music, nobody will buy their CDs. If, on the other hand, people like a band (and I think that there is a niche for almost any band), they will go buy the albums. Thanks to MP3, bands acquire hordes of new fans.
I now buy music that I would not have heard of, let alone appreciated, without having downloaded first on the Internet. Of course, I have many MP3s which I listen to a lot for which I don't own the CDs. But I'd say I own the albums for more than half of my music. There will always be a few people who listen to MP3s but never buy CDs, but I think that, overall, both fans and the music industry benefit from an extremely fast and free exchange of music.
MP3 has made me more willing to buy music, and more satisfied when I do. I've noticed a similar sentiment in many of my friends, and I wouldn't be surprised if many other people share this attitude also.