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Since the popularization of microtransactions in online distribution platforms such as Steam, the term DLC has become a synonymous for any form of paid content in video games, regardless of whether they constitute the download of new content. Furthermore, this led to the creation of the oxymoronic term "on-disc DLC" for content included on the game's original files, but locked behind a paywall.
With the advent of the Xbox, Microsoft was the second company to implement downloadable content. Many original Xbox Live titles, including Splinter Cell, Halo 2, and Ninja Gaiden, offered varying amounts of extra content, available for download through the Xbox Live service. Most of this content, with the notable exception of content for Microsoft-published titles, was available for free.
The Xbox 360 (2005) included more robust support for digital distribution, including DLC downloads and purchases, via its Xbox Live Marketplace service. Microsoft believed that publishers would benefit by offering small pieces of content at a small cost ($1 to $5), rather than full expansion packs (~$20), as this would allow players to pick and chose what content they desired, providing revenue to the publishers. Microsoft also utilized a digital currency known as "Microsoft Points" for transactions, which could also be purchased through physical gift cards to avoid the banking fees associated with the small price points.
Music video games, such as titles from the Guitar Hero and Rock Band franchises, took significant advantage of downloadable content as a means of offering new songs to be played in-game. Harmonix claimed that Guitar Hero II would feature "more online content than anyone has ever seen in a game to this date." Rock Band features the largest number of downloadable items of any console video game, with a steady number of new songs that were added weekly between 2007 and 2013. Acquiring all the downloadable content for Rock Band would, as of July 12, 2012, cost $9,150.10.
Starting with iOS 3, downloadable content became available for the platform via applications bought from the App Store. While this ability was initially only available to developers for paid applications, Apple eventually allowed for developers to offer this in free applications as well in October 2009.
Microsoft has been known to require developers to charge for their content, when the developers would rather release their content for free. Some content has even been withheld from release because the developer refused to charge the amount Microsoft required. Epic Games, known for continual support of their older titles with downloadable updates, believed that releasing downloadable content over the course of a game's lifetime helped increase sales throughout, and had succeeded well with that business-model in the past, but was required to implement fees for downloads when releasing content for their Microsoft-published game, Gears of War.
While video games are the origins of downloadable content, with movies, books and music also becoming more popular in the digital sphere, experimental DLC has also been attempted. Amazon's Kindle service for example allows updating ebooks, which allows authors to not only update and correct work, but also add content.
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