Wal-Mart wades into online download service at 88 cents a song

December 19, 2003

From Bentonville, Arkansas news is that Wal-Mart has joined forces with Liquid Digital Media to offer a test market of downloadable music on the Wal-mart page. I've been there, it it easy and convenient to use. What's interesting about Wal-Mart is their clout. There is not a supplier in the US that hasn't felt the pressure from this company if they are a customer. Wal-Mart is the number one employer in the US and in the state where I live. They produce nothing, they just sell low, very low, with wages to match.

We all know Apple and other services are not making any money at this. Now, Wal-mart comes along and undercuts them all. Loss leader for Apple is one thing, loss leader for Wal-Mart is another. Wal-mart can hold their breath a long time in these waters. When they enter a market, they dominate. Then they ask for concessions from suppliers and they are so big they get what they want. If this service takes off, the labels had best brace themselves, as they will be dictated to in short order by this bunch. This could be interesting to watch as the labels squirm under the thumb of this monsterous retailer. These guys are bad news to the competition as well, no doubt about it.

Value. Selection. Simplicity.
Wal-Mart plans to deliver all three to customers as it begins testing a new
low-price online Music Downloads service at Walmart.com. The testing phase begins today and, based on customer response, will be officially rolled out early next year.
"We've found that easy access to a wide range of music is very important to the Wal-Mart customer," said Kevin Swint, walmart.com's senior category manager of entertainment media. "With 64 percent of our customers online, we see digital music downloads as a natural extension of the music selection
offered in Wal-Mart stores. We're excited to offer this convenient service at the value and selection our customers expect from Wal-Mart."

During the test period, customers can visit walmart.com to browse a catalog of hundreds of thousands of songs -- all available for download and purchase at only $ 0.88 per track. Wal-Mart plans to gather customer feedback
over the next few months, make modifications based on that feedback, and then officially launch the service in 2004.

Customers will have the flexibility to play downloaded music on their Windows PC, burn songs to a CD, or transfer music to compatible portable devices. The music files will be available in WMA format. Usage rights will be uniform across the entire catalog of music, simplifying the experience of owning downloaded music for customers. Added Swint, "The test phase for this new service is important to gauge customer feedback, so that we can deliver a quality music downloads service that customers will want to use time and time again."

The Music Downloads service was developed in partnership with Anderson Merchandisers, which supplies music to Wal-Mart and Walmart.com, and will feature a wide selection of songs provided by Liquid Digital Media, formerly Liquid Audio, a leading provider of digital media fulfillment services. Anderson Merchandisers acquired the assets of Liquid Audio in January 2003.

The site is fast and simple, no training required. Anyone that can type with one finger could use this service and I am sure they will. For whatever reason, I was unable to listen to a preview on my current setup.The music is encoded in WMA format and of course uses WMP9 but it choked saying the content server was offline. Even after checking my network settings and shutting down the old firewall. Possible, as this is the first day, they may have some technical issues.

Let's stay tuned and see if there is a ripple in the force from this Darth Vader of the retail world. Steve Jobs, you've got some competition buddy.

Source: PR Newswire