Tuesday, August 21, 2007

Wal-Mart beats Amazon in download race

Wal-Mart beats Amazon in download race
By Jonathan Birchall in New York
Copyright The Financial Times Limited 2007
Published: August 21 2007 15:55 | Last updated: August 21 2007 15:55

Wal-Mart, the largest US retailer, on Tuesday announced the launch of a music download service that sells songs from EMI and Universal Music Group without the digital rights management (DRM) copy protection that limits the kinds of device on which they can be played.

The move, which comes as Amazon is planning a similar service, marks a potential challenge to the digitial dominance of Apple’s iTunes, since it offers music that can be played both on Apple’s iPod devices and on less popular but cheaper MP3 players.

Wal-Mart is selling DRM-free music on its website from EMI and Universal at 94 cents per track, and $9.22 per album by artists including the Rolling Stones and Nelly. Apple’s iTunes sits sells single songs for 99 cents.

The retailer has operated a standard MP3 download service at 88 cents a track for over two years, but the service has not achieved significant traction.

Wal-Mart’s move is expected to be followed imminently by Amazon, the largest online retailer. Both retailers already operate video download services on their websites, but their move into music downloading has been delayed by the debate with music studios over the implications of the DRM-free system.

Earlier this year, Britain’s EMI Group said it would make its entire digital catalogue available through Apple’s iTunes online music store without digital rights management (DRM) protection. Vivendi’s Universal Music Group said earlier this month it would offer thousands of its recordings online without DRM in a six month trial.

Sony BMG and Warner Music are also exploring a similar strategy. But they are still concerned that selling copyable MP3s could increase piracy or cut into their burgeoning sales of music to mobile phone users.

Amazon did not release pricing information for the music service but did say that it would be ”competitive”.

iTunes has maintained its 80 per cent share of the legal online music market in spite of competition from a variety of companies, including Microsoft, which last year released its Zune player.


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