August 10, 2011
After eight years of quietly selling music downloads, Wal-Mart (NYSE: WMT ) is calling it quits. The world's largest retailer has advised distribution and licensing partners that it will close its MP3 store on Aug. 28, according to Digital Music News.
This is a surprising move on many different levels.
- Wal-Mart recently integrated its Vudu video-streaming service with walmart.com, so it would seem odd that it's throwing more promotional muscle behind one form of a la carte streaming while nixing another.
- Amazon.com (Nasdaq: AMZN ) has been successfully creative with its music streams. Whether it's selling Lady Gaga's new CD as a download for just $0.99 or using digital purchases to expand its fledgling cloud-based streaming platform, Amazon is proving that you can stand out in a world where Apple's (Nasdaq: AAPL ) iTunes rules.
- Best Buy (NYSE: BBY ) has had a few rough quarters, yet it continues to sell online tracks. Does Wal-Mart really want to let Best Buy be the only bricks-and-mortar chain directly selling digital downloads?
- Amazon is now selling movies, music, books, and software online. If Wal-Mart truly wants to compete with Amazon, it can't afford to fall behind.
- Digital music is apparently popular, judging by the initial excitement over Pandora Media's (NYSE: P ) IPO and Spotify's stateside launch.
Wal-Mart's MP3 page is still not advising shoppers of its pending closure, so there may be time for the discounter to change its mind.
Wal-Mart tried to set itself apart from Apple and Amazon by selling music at a slight discount to the larger e-tailers. Offering songs at $0.64, $0.94, and $1.24 price points should have been a draw to young penny-pinching listeners. However, whether it's that the Wal-Mart brand just wasn't cool enough for music tracks or that folks are just more glued to the iTunes interface than they would care to admit, the department-store chain just wasn't able to compete on price alone.
Music fans are finicky. No surprise there. Wal-Mart hangs it up just as the digital-music scene is getting good? Now that is a big surprise.
Where do you buy your digital music -- if you even buy digital music? Share your thoughts in the comments box below.