[2] Initially launched as a Telnet service in August 1994, CDNow became a retail website in September 1994 using Valley Records Distributors as a drop-ship fulfillment center.

[4] In 1995, an article in the Los Angeles Times said that CDNow had brought the web "one step closer to the day when artists will market directly to consumers, cutting out distributors such as record labels.

On March 17, 1999, CDNow acquired its largest competitor, another Philadelphia area company, N2K, whose online properties included Music Boulevard and Jazz Central Station.

[14] In July 2000, Bertelsmann Music Group acquired the company, intending to combine it with its BMG Direct record club as a new venture called BeMusic, and eventually add Napster to the service.

[19] The new deal retained a revised version of the BMG Direct model called the "Preferred Buyers Club", offering a 20% discount for club-edition records; all other music was sold at standard Amazon prices.