Yahoo! News Thu, Dec 18, 2003
2 hours, 29 minutes ago
LITTLE ROCK, Ark. - Wal-Mart Stores Inc. launched a bare-bones Web site Thursday to test its new 88-cents-per-song online music service, hoping that its cheaper price will lure listeners from more expensive competitors.
Other sites, such as Apple Computer Inc.'s iTunes Music Store, charge 99 cents per song.
Wal-Mart said its site has "hundreds of thousands" of songs, available in Windows Media Audio format, which can be transferred to compatible portable devices, burned to a CD or played on Windows PCs.
"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," said Walmart.com senior category manager Kevin Swint.
The company plans to see what customers like and don't like about the service in the months ahead and formally launch it in the spring.
Executives at the world's largest retailer are fond of saying that 20 percent of their customers don't have checking accounts. Even so, 64 percent of Wal-Mart customers are online, Swint said.
"We see digital music downloads as a natural extension of the music selection offered in Wal-Mart stores," he said.
Walmart.com spokeswoman Cynthia Lin would not say what the famously cost-conscious company expects to make from offering the service. Lin said Wal-Mart employed its traditional low-cost methods in developing the music site but would not say whether it negotiated lower rates to license the songs it sells.
Wal-Mart enters an increasingly crowded field, including not only Apple's iTunes service ? which has sold 25 million songs since launching in April ? but also MusicMatch, Rhapsody and the revamped, legal Napster (news - web sites). Microsoft Corp. also plans to introduces its own song-downloading service next year.
Analyst Phil Leigh of Inside Digital Media said Wal-Mart's service will likely appeal to cost-conscious music fans and people who haven't yet tried other downloading services. But he said the per-song price of 88 cents was not as inexpensive as some competitors with more expansive sites had feared.
"I think it'll be a moderate success for Wal-Mart, and probably not hurt the other online music stores too much," Leigh said.
Lin said the site will abide by the same content format as CD racks in Wal-Mart stores, which don't sell music the company deems offensive. On the Web site, the company notes that some songs are flagged as "edited" to denote a song was recorded without offensive lyrics.
On Thursday morning, the Walmart.com music site featured the club mix of OutKast's "Hey Ya!" as its top download.
Its No. 9 entry was "First Cut is the Deepest" by Sheryl Crow. In 1996, Wal-Mart refused to stock a CD by Crow that contained lyrics criticizing Wal-Mart for selling guns. Her greatest hits CD is featured on the site, but it doesn't feature the offending song, "Love is a Good Thing."
Wal-Mart shares rose 70 cents to close at $52.60 on the New York Stock Exchange (news - web sites).
http://story.news.yahoo.com/news?tmpl=story&ncid=&e=8&u=/ap/20031218/ap_on_hi_te/wal_mart_online_music_9
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