Online retailers sell music through the web in various formats including digital downloads on a per track or album basis or through subscription services that provides access to the retailers entire catalog for a monthly fee. The experience of buying music through a digital retailer can be much more convenient than going to a traditional retailer for many music fans. Online retailers have promotional programs, site positioning and specialty features to promote the artists in their catalog. Most promotional emphasis is placed on new releases and exclusive content.

The digital retailers typically request that the distributors submit their music and metadata (artist, album, track name, art, publisher and related information) in a specific file format and many provide tools that make the job of uploading the information in bulk easier. The digital retailers keep a percentage of each sale and pass the balance back to the distributor. The distributor will pay the appropriate record label for each sale that in turn will pay the artist according to the terms of their recording contract .

Digital sales are currently the biggest growth area in the music industry as sales of the CD format continue to decline. The cost of getting a record to market for digital distribution is much less than through traditional retailers since there is no need to manufacture, warehouse or ship CD’s to digital retailers. However the revenue recognized by distributors, labels and artists on a per release basis is less than a sale of a traditional CD. Fans will often times now only buy the tracks they like on a new release instead of an entire bundled record, thereby reducing the overall revenue on a given release.

There are numerous digital retailers however the more influential ones are iTunes, eMusic, Napster and Real / Rhapsody.