I guess it all depends on how you stack the numbers. A professor in Dallas, Texas, performed a study which found a 0.75 drop in album sales for every hour of radio listening per person from 1998 to 2003, so says the New York Times (registration required or not.) I haven’t read the study, but the Times article characterizes the relationship as a correlation — not a causation.
That 0.75 drop could explained by any number of factors, not all (or any) of them related to radio. But what if radio were responsible for a drop in album sales? The reason I stopped listening to radio was because I just didn’t want to get sick of hearing some hit song over and over, even if it was something I originally liked. Overplay — that could kill an album sale. Personally, I just assume if it’s on the radio, it must suck anyway.
So yeah, I think I can buy into the idea that radio hurts album sales. Why not?
Exception for public radio and, perhaps, college stations.