When I started tracking music downloads in 2002 there were virtually no major label download retailers online. Listen, Pressplay and MusicNet had just launched in the USA, Sony had their own beta site and OD2 licensed some BMG repertoire. Otherwise the web belonged to the indies.
The indies and DIY sites had been online since the early Nineties. By 2002 Napster had been and gone and MP3.com had been bought by Vivendi Universal for $372m in May 2001 (it closed after legal action in 2003). Big indie download pioneer IUMA started in 1994 and Emusic opened an online MP3 store in 1998. In 2002 it was fairly easy to keep a list of the main download sites, and all the main players were independent.
Throughout the Nineties major record companies had resisted online retail (as late as 1999 Sony stopped Creation Records setting up their own site). Instead the majors invested over $14 million in SDMI to protect their tracks, but when it was released in 2000 it was cracked immediately. Next they planned to control content sales, shutting out or sidelining other retailers. Sony launched a beta retail site in 2000 and planned a new site with Universal, first called Duet then Pressplay.
From 2000 to 2002 the major labels concentrated on these retail sites. At the end of 2001 the three would-be major platforms Pressplay (Sony and UMG), MusicNet (BMG, EMI, WMG, AOL) and Listen launched beta sites in the USA. But BMG had already broken ranks in September 2001 and licensed some of its repertoire to OD2 in Europe. This led to another change of direction and by July 2002 Listen had secured licenses with all the majors making it the first online retailer to do so (something even the majors’ own sites had yet to do!). It wasn’t until November 2002 that Pressplay and MusicNet had licensed tracks from each others major record companies. In the mean time a flood of new online retailers had entered the market, and all of them (apart from Listen) were getting by with indie releases and patchy major label licenses.
Then on 28 April 2003 Apple (following up its iPod in late 2001) launched the iTunes Music Store with licenses from all the majors, and changed the world of commercial downloads overnight. They featured sales instead of subscriptions, an enthusiastic advertising campaign and support from artists like Sheryl Crow and U2. Within weeks Sony and UMG sold flagging Pressplay to Roxio (who rebranded it for Napster 2) effectively writing-off their $60 million investment, and Listen was taken over by Real and rebranded RealOne Rhapsody. EMI, WMG and BMG partners, Real and AOL eventually sold MusicNet to Baker Capital.
Today there are over 300 mainstream download retailers and thousands of indie and DIY sites. The majors, who had a head start and spent hundreds of millions have been marginalised at online retail. BMG’s Click2Music has been abandoned and the last major label store Sony Connect closed in August 2007. The three big players of December 2001 have all been sold and many other high profile sites such as OD2’s SonicSelector have failed. OD2 itself was sold to Loudeye in 2004 and Loudeye (having sold off everything except OD2) was sold to Nokia in August 2006. Even the venerable IUMA closed its doors early in 2006.
2007: Microsoft’s Zune MarketPlace, Google gBox with UMG, Nokia Music Store (rebranded OD2/Loudeye), Omnifone MusicStation (mobile phones only), plus the much-trailed SpiralFrog audio and NBC Direct for TV video with advertising built-in. WMG started Lala a browser-based store downloading direct to iPods (bypassing iTunes). 2007 also saw a substantial move away from DRM among the major labels led by EMI.
2008: Amazon MP3 DRM-free store licensed Sony BMG to complete their major label line-up. Other big noise sites include: Imeem social music community, Nokia Comes With Music on cell phones, iLike social music community (developed by Garageband.com in 2006) and MySpace Music. Sony is talking about launching a new MP3 subscription site. Turning away from subscriptions Napster and Rhapsody joined Amazon offering DRM-free MP3 tracks.
In April 2008, just in time for its 5th birthday, iTunes Music Store became the number one music retailer in the USA, with a music catalogue of 10 million tracks, over 4 billion sales and 65 million customer accounts worldwide. Meanwhile, Universal leads the major labels’ drive to erode Apple’s dominance with DRM-free content—having handed the market to them in the first place by insisting on DRM. Physical sales are dropping between 10% and 20% every year and multi-million selling singles are now downloads. Overall, the music market continues to lose ground against other retail entertainment such as games and video.
In 2009 the big newcomer was Spotify and iTunes became the biggest music retailer on Earth.
I don’t attempt to keep a complete an up-to-date list here these days, they come and go regularly. There are a few decent lists elsewhere. There isn’t a single source that lists every download site but this is the best I know and the most up-to-date.
There is also a good list of online retailers in the list of outlets supplied by CD Baby.If you’re looking into online distribution checkout the independent aggregators too.These days you don’t need to deal with individual retail sites. Aggregators offer your tracks to around 50 different retailers worldwide including telecomms carriers. Ring tone sales are one of the biggest categories by value but telecomms carriers and content package providers still control distribution of most mobile content.