Defeated Walmart Exits Digital Music Market

It might be the biggest retail company in the world, but Walmart has flat-out failed in its crusade to defeat digital music giants iTunes and Amazon.com. The company recently announced it will exit the market on August 29, 2011.

Walmart opened its online doors to digital downloaders in beta form about eight years ago, not long after Apple first introduced its iTunes Music Store (a name since reduced to just iTunes). After some substantial testing, the final version of Walmart's digital store was unveiled in March 2004.

Walmart's Low, Low Prices Not Enough

Its main draw, unsurprisingly given the company behind the online outlet, was the price: songs were available on Walmart's digital store for 88 cents, 11 cents less than those found on iTunes. (Source: pcworld.com)

There were major problems with Walmart's store from the beginning, however. The first mistake was that Walmart's Music Store targeted Windows users almost exclusively. Second, the download format it used for songs, WMA (Windows Media Audio), wouldn't allow users to play those tunes on the uber-popular iPod.

It wasn't until August 2007 that Walmart remove Digital Rights Management (DRM) from its MP3s, allowing users to use purchased music on as many computers as they liked. In October 2008, Walmart finally offered its services to Mac users.

Compatibility, Price Cuts Come Too Late

And while it simultaneously reduced the price of its tracks to just 74 cents, the battle was long over -- iTunes had clearly emerged victorious. By August 2009, one in every four songs purchased online was downloaded through Apple's online store. (Source: computerworld.com)

In February of last year Walmart purchased digital streaming service Vudu, indicating that perhaps it had already given up on music in favor of video. The company recently boasted that Vudu's customer base has tripled in the last eight months, so the change appears to have paid off thus far.