The CD was planned to be the successor of the vinyl record for playing music, rather than primarily as a data storage medium. From its origins as a musical format, CDs have grown to encompass other applications. In 1983, following the CD's introduction, Immink and Braat presented the first experiments with erasable compact discs during the 73rd AES Convention. In June 1985, the computer-readable CD-ROM (read-only memory) and, in 1990, CD-Recordable were introduced, also developed by both Sony and Philips. Recordable CDs were a new alternative to tape for recording music and copying music albums without defects introduced in compression used in other digital recording methods. Other newer video formats such as DVD and Blu-ray use the same physical geometry as CD, and most DVD and Blu-ray players are backward compatible with audio CD.

By the early 2000s, the CD player had largely replaced the audio cassette player as standard equipment in new automobiles, with 2010 being the final model year for any car in the United States to have a factory-equipped cassette player. With the increasing popularity of portable digital audio players, such as mobile phones, and solid-state music storage, CD players are being phased out of automobiles in favor of minijack auxiliary inputs, wired connection to USB devices, and wireless Bluetooth connection.

Meanwhile, with the advent and popularity of Internet-based distribution of files in lossily-compressed audio formats such as MP3, sales of CDs began to decline in the 2000s. For example, between 2000 and 2008, despite overall growth in music sales and one anomalous year of increase, major-label CD sales declined overall by 20%, although independent and DIY music sales may be tracking better according to figures released 30 March 2009, and CDs still continue to sell greatly. As of 2012, CDs and DVDs made up only 34 percent of music sales in the United States. By 2015, only 24% of music in the United States was purchased on physical media, ⅔ of this consisting of CDs; however, in the same year in Japan, over 80% of music was bought on CDs and other physical formats.

Despite the rapidly declining sales year-over-year, the pervasiveness of the technology remained for a time, with companies placing CDs in pharmacies, supermarkets, and filling station convenience stores targeting buyers least able to utilize Internet-based distribution. However, in 2018, Best Buy announced plans to end CD sales in its stores on July 1, 2018, with Target Corporation planning to only offer CDs on a consignment basis.