Looking for some hot chart action? The US singles scene is the place to be. Thanks to iTunes and pop’s hottest stars, lately, it’s moving and shaking” especially over on Billboard’s Hot Digital Songs chart. For the week ending March 26, 2011, Katy Perry‘s “E.T.” ruled, with 216,000 downloads sold. At No. 5, Britney Spears‘ “Till The World Ends” had moved 158,000 units. The entire Top 10”which features songs by Jennifer Lopez (215K), Lady Gaga (176K), Rihanna (168K), Cee Lo Green (157K), Ke$ha (140K), Pink (124K), Dr. Dre (124K) and Chris Brown (117K)”had enjoyed downloads north of 100,000.

Whoa! What’s this? Isn’t the music industry supposed to be on life support, hanging by a thread? Well, it is, but as album sales continue to decline (only the Top 2 albums, by Lupe Fiasco and Adele, sold more than 100,000 during the same week), the singles market is prospering. Year-to-date album sales were down 7 percent compared to the same 2010 period, while year-to-date single sales were up 7 percent. One decade ago, the demand for singles was waning rapidly in the US, en route to bottoming out. Fewer labels were releasing physical CD singles, and Billboard’s Hot 100 was becoming increasingly weighted in favor of airplay, as many of the songs climbing the chart weren’t even available for purchase outside of the albums on which they appeared.

But iTunes has turned the singles scene around. With the click of a mouse, fans can have whatever song they want from a particular artist without having to buy an entire album. As a result, there’s been a surge in singles stars, recording artists like Katy Perry, Ke$ha and Bruno Mars, who sells tons of singles each time out while enjoying respectable but relatively modest album sales. For the week ending March 26th, Perry was on the verge of landing her fourth No. 1 Hot 100 single from her Teenage Dream album. Back in the day, an album would be platinum several times over by the time it launched its fourth No. 1”see Michael Jackson‘s Bad, or Janet Jackson‘s Rhythm Nation 1814”yet Perry’s album is currently only around 1.2 million, which is a long way from double-platinum.

The new crop of solo stars aren’t the only ones whose chart numbers are benefitting from the resurgent single. The cast of Glee recently surpassed Elvis Presley‘s record for putting the most songs on the Hot 100 almost completely on the strength of single sales, and the Glee kids keep putting out the hits. Four Glee songs debuted on the March 26 Hot 100, and three of them””Landslide” at No. 23, with 115,000 downloads, “Do You Wanna Touch Me (Oh Yeah)” at No. 57, and “Kiss” at No. 83” featured Gwyneth Paltrow on vocals.

The Academy Award winner just signed a recording contract with Atlantic Records, and although she has yet to release an album, she’s already sung lead on eight Billboard chart hits. But Atlantic executives shouldn’t count on seeing much green from the Paltrow deal just yet. Though single sales are more robust than ever, at just around $1.29 a download, they don’t line the coffers of record companies the way album sales do.

If Paltrow is to help reverse the industry’s sagging fortunes, she’ll have to appeal to fans beyond one-single stands and inspire album-length devotion, which few new solo stars aside from Lady Gaga and Adele have done in recent years. (In three weeks, Adele’s 21 sold roughly half of what Teenage Dream, with its four hit singles, did in six months.) The road is long and hard, and with so many pop divas currently slogging through it, it’s going to take a lot more than a Gleek following for Paltrow to pull out into the lead.