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Walmart admits defeat to iTunes, to close MP3 music shop

updated 06:15 pm EDT, Tue August 9, 2011

Walmart to shutter MP3 store by August 29

Walmart said Tuesday that it would close its MP3 store on August 29. The discount retailer said it had made a "business decision" to get out of MP3 downloads and would wind down in just under three weeks. No reason was given for the closure.

The chain was one of the earliest major outlets to get into pay-per-track music downloads after Apple, launching in fall 2003, but never gained significant traction. It had counted on its razor-thin margins on tracks as its main advantage and frequently sold songs for 88 cents versus Apple's 99 cents. Even when RIAA labels insisted on variable pricing for unprotected tracks, it still discounted tracks by about five cents each and had similar deals on full-size albums.

Much of Walmart's failure has been blamed on its choice of formats. Making the presumption that endorsing Microsoft's choice of format would lead it to success, it opted for Windows Media Audio and found itself locked out of Apple's iPod, guaranteeing a lack of mainstream adoption. The choice of a Microsoft alliance compounded the troubles further when Microsoft launched the Zune and its companion Zune Marketplace, leaving Walmart to compete against its own partner.

At the time, Walmart was one of the very largest sources of music in the US and was hoping its size as a retailer would give it an edge. Apple eventually passed it to claim the largest US music store, regardless of format, and has only been widening its lead. Purely in digital, Walmart owns just a small fraction of the market as it bows out, while Apple has over two thirds and Amazon MP3 about a sixth.



By Electronista Staff
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Comments

  1. 001

    Fresh-Faced Recruit

    Joined: Dec 2010

    +11

    WMA != MP3

    According to the article, and screenshot, WalMart called its service an MP3 store, the article then states that it only sold WMA. Maybe it failed because it confused the f*** out of people.

  1. Zanziboy

    Forum Regular

    Joined: Aug 2008

    -1

    Walmart Has Enough Clout Already

    Walmart dominates brick and mortar discount retailing so hopefully they will focus on their core business instead.

  1. facebook_Jeff

    Via Facebook

    Joined: Aug 2011

    0

    No surprise

    Who the h*** uses WMA nowadays anyways? Jesus, what a bunch of short sighted idiots in the upper ranks of Walmart...

  1. eclux

    Fresh-Faced Recruit

    Joined: Jul 2008

    +8

    Electronista Admits Exaggeration

    "Admit: confess to be true or to be the case, typically with reluctance."

    and yet...

    "No reason was given for the closure."

    That's not "admitting" then, is it? Perhaps you meant the less dramatic though equally speculative "accepts defeat"? The headline suggests that a very different and interesting statement was made by Walmart.

    And it would be "defeat by" not "defeat to". If you were not taught proper English in school, at least get a computer with a built-in dictionary widget. I'd recommend a Mac.

  1. JackWebb

    Fresh-Faced Recruit

    Joined: Aug 2007

    +3

    been mp3 a while

    Walmart was wma way back but switched to mp3 before iTunes killed their DRM near when Amazon's mp3 store opened. There is poor variety in the Walmart store but there are some excellent deals too. One of the worst parts is: if you purchase an album with lots of tracks, like 100, you have to download every track one at a time, waiting for the previous one to finish or else you'll lose the song. Very tedious.

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