And today's lesson? It looks like price isn't the most important thing when it comes to music downloads. Once upon a time, Walmart was an 'iTunes-killer' with deeply-discounted, 88-cent MP3s. But discounts meant little compared to integrated iPod and iPhone integration, a superior iTunes user interface, and the tether created by stored credit cards (which Apple does well).
And just like that, Walmart is now closing its MP3 download store, thanks partly to weak consumer demand and price insensitivity. The following certified letter was recently sent to distribution and licensing partners, and shared exclusively with Digital Music News:
"After eight years in business, the Walmart Music Downloads Store located at mp3.walmart.com will close on August 28, 2011. All content in the Store will be disabled and no longer available for download from the store.
"The sale of physical record music products on Walmart.com as well as in Walmart US retail stores will remain unaffected. Walmart Soundcheck (soundcheck.walmart.com) will remain operational as a live streaming site without any download options."
A representative of Wal-Mart noted that older, protected files will still be supported. "We’ve made a business decision to no longer offer MP3 digital tracks as of August 29, 2011," the executive confirmed. In late 2008, the company finally secured licenses to shift away from DRM-protected purchased and towards MP3s. "We'll continue to provide support to our customers who previously purchased digital music through Walmart Music Downloads so they may continue to enjoy and manage their existing WMA files."

Comments Closed
@jcahealey Tuesday, August 09, 2011
Jon Healey
Raise your hand if you'll notice.

Dick Wingate Wednesday, August 10, 2011
See my post

Davis Freeberg Tuesday, August 09, 2011
Given the smashing success they've had with their DVD by mail and now their MP3 programs, consumers should be super excited about the long term prospects for Vudu.

Dean Collins Tuesday, August 09, 2011
Yet again proving that people who buy MP3's with DRM are making a huge mistake.
I burn my cd's to MP3 put them onto my media server and share them across any pc or mobile or home theatre device of my choosing with my rights never to be revoked.
Wait until Apple implement a DRM change to itunes and it will look like a twitter fail whale outage look like a storm in a teacup.

132BPM Wednesday, August 10, 2011
Apple ceased using DRM in their tracks years ago. Plus, DRM was only a headache to the uninitiated. Simply creating an audio CD of your iTunes purchases (which was also now your back-up copy) and then re-ripping them removed DRM as any kind of problem.
Problem solved...although it was never really a problem to begin with unless you were lazy.

HansH Wednesday, August 10, 2011
The gap between 0.99 and 0.88 is just not big enough. Remember AllofMP3? If the prices had dropped to 0.15 years ago paid downloads would have been a massive succes. Too late now.

Dick Wingate Wednesday, August 10, 2011
And the final burial of a once great company I helped to build, Liquid Audio, which was bought in 2003 by Anderson, the supplier of music products to WalMart.

@AdlureMedia Wednesday, August 10, 2011
Adlure Media
Apple has done it again.

@McLff Wednesday, August 10, 2011
Emmett McAuliffe
Wal-Mart, the #1 seller of CDs, and seller of 12% of all downloads, is leaving the digital space and is not coming back.

REMatwork Wednesday, August 10, 2011
See this impt. historical piece from Bloomberg in 2006 about how downloads, esp. downloads from Wal-Mart, were supposed to jump-start new growth
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=arsZlqzCq9ic
When the world's largest retailer and largest vendor of CD exits the digital space that you were hoping would fill the void left as physical declines ... that's not a small problem.
Alexandra, great piece. well-written as always. Can you unpack exactly how Apple was able to throw up impediments to "iPod and iPhone integration" with the Wal-Mart dls? From where I sit, it's not that hard to get a DL into my iTunes. Was a Wal-Mart app for iPhone rejected?

alexandra Thursday, August 11, 2011
@REMatwork
I am not aware of any blocks, and a Wal-Mart sold MP3 from my experience worked through iTunes w/o problem. I never got as far as the Wal-Mart app to be honest. But the point I was pushing towards is that iTunes has triumphed by offering the ecosystem that includes stored credit cards, iTunes app, iTunes Store, App Store, iPod, iPhone, and now iPad, etc.
/ao

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