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Watch for falling music download prices

By Dinesh C. Sharma

Special to CNET News.com


Story last modified March 23, 2004, 11:01 AM PST

Wal-Mart Stores is bringing cut-rate prices to the ever-more-crowded world of online music.

On Tuesday, the mammoth chain retailer formally opened its online music store, from which customers can download music at 88 cents per song. That's 11 cents less than Apple Computer charges at its iTunes music store, which has been the pacesetter on this e-commerce track.

The Wal-Mart service allows customers to play downloaded music on Windows PCs, to burn songs to a CD or to transfer music to portable devices. Usage rights are uniform across the company's catalog of music. The retailer began testing the service in December and is working in partnership with Liquid Digital Media, formerly Liquid Audio.

The service includes a "download manager" designed to help customers retrieve full albums and groups of songs.

There's no shortage of companies that want to be the outlet for consumers looking to acquire songs online. Besides Apple, which last month said it was selling approximately 2.5 million downloads per week, the competition includes MusicMatch and the reborn Napster. Microsoft plans to enter the fray in the second half of the year.

Bentonville, Ark.-based Wal-Mart said it has an exclusive two-month deal with Curb Records, whose country music stars include Tim McGraw, LeAnn Rimes and Jodee Messina.


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Here's another article from the NY Times on the Walmart store:

Wal-Mart Launches Online Music Store


Published: March 23, 2004

CHICAGO (Reuters) - Wal-Mart Stores Inc. (WMT.N) on Tuesday officially launched its online music store with an expanded roster of artists, and kept the price at the same 88 cents per song that it offered during a three-month test.

The store, which sells digital downloads for 11 percent less than major competitors, expanded its catalog of artists by 50 percent, including exclusive songs from Jessica Simpson, 3 Doors Down, Shania Twain and others, the Bentonville, Arkansas-based retailer said.

Wal-Mart began testing the site, which allows customers to download songs from the Internet, in December.

While the new store will have the brand name of the most powerful retailer behind it, it will face off against a number of companies that are better known in the online music space, such as Apple Computer Inc.'s (AAPL.O) iTunes music store and Roxio Inc.'s(ROXI.O) Napster.

Apple, which said last week it has sold more than 50 million songs through downloads on its nearly year-old service, declined to comment on the pricing but said it has confidence in its iTunes service.

``We think it's going to be increasingly difficult to imagine others catching up with iTunes,'' an Apple spokeswoman said.

Both iTunes, the most popular online music service, and Napster charge 99 cents per song, although Napster and several other services also offer subscription options that allow users to pay a monthly fee for downloads.

Wal-Mart is the dominant force in U.S. retailing, but it was relatively late to the dot-com world and has been adding online services in hopes of boosting its Web presence. It recently started offering contact lens prescription and DVD rental services.

Wal-Mart spokeswoman Cynthia Lin declined to comment on whether the service was profitable, or on how many songs had been downloaded, but said demand ``far exceeded'' company forecasts. She said the music download service means Wal-Mart can offer far more titles than it can in its stores, where shelf space is limited.

Analysts have said that the goal for Wal-Mart is to bring more people to its Web site. Even if the music service sold 100 million songs, that would add up to just $88 million -- a paltry sum for a company that recorded nearly $260 billion in revenue last year.

Wal-Mart said that for the next two months it would be the exclusive supplier of songs from artists carried by the Curb Records label, whose roster includes country music stars Tim McGraw and LeAnn Rimes.

Like most online services, the Wal-Mart service is aimed at users of Microsoft Windows operating system, which accounts for the vast majority of personal computers. Apple's iTunes, by comparison, is compatible with both Windows and its own operating system.

Shares of Wal-Mart closed up 11 cents, or 0.19 percent, at $58.21 on the New York Stock Exchange on Tuesday. Apple shares closed off 2.20 percent at $25.59 and Roxio closed down 5.75 percent at $4.75, both on the Nasdaq.


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Not that I would use a pay service, but I predict that Wallmart's online music store will be every bit as sucessful as Apple's iTunes, if not more so.

If there's one thing Wallmart can do, it's doing something big and cheap. It was no mistake that Wallmart's profits were $248 billion last year. Wallmart has got captialism down to a fine art :)

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When I look into my crystal ball I see hazy images of a future struggle.....a civil war between the two camps in the Republican States Of Ameribush. The WalMartians against the Haliburtians, family corporations against family corporations. I see great tragedy in that hazy future....

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