Not in Tune with iTunes

The retail digital music business is turning up the volume, with new players are looking to take on Apple's iTunes.

Wal-Mart Stores announced this morning that it will sell DRM-free songs through its website for 94 cents a track, or $9.22 an album. That's below Apple's $1.30 price tag for songs that lack limiting digital rights encryption - and while Amazon.com has yet to set prices for its competing offer, Wal-Mart's number will be a tough one to beat.

Looks as if the world's largest offline retailer is taking a step to challenge the world's largest online retailer. It's just in music downloads for now, but is this the start of a larger Wal-Mart vs. Amazon.com war for the web?

Wal-Mart's offering is also a new strike against Apple, whose market-dominant iTunes has long drawn the ire of record companies. The labels blame Apple for depressing overall digital music sales by using a DRM technology that makes songs sold on iTunes incompatible with non-Apple devices.

Universal, for one, is fighting back.

The world's largest music label announced earlier this month that it will start experimenting with DRM-free downloads, allowing songs to be sold online without copy-protection technology for a limited time. Google, Wal-Mart, and Amazon.com were cited as retail partners. Apple was snubbed.

Wal-Mart's new service will launch with songs from EMI as well as Universal while Sony BMG and Warner Music Group continue to hold their ground against DRM- free downloads.

Wal-Mart's not the only one eager to harness consumer demand for digital music. Today Verizon WIreless, RealNetworks, and MTV announced that they will team up to create a single, integrated digital music experience that consumers can access via their computer, MP3 player, or cell phone.

Verizon Wireless, which already enjoyed marked success with mobile music and TV via its VCast entertainment platform, will now be able to integrate purchase, storage, and streaming of digital music into your cell phone.

The content will be courtesy of RealNetworks' Rhapsody - a subscription service which allows users to stream unlimited songs or "rent" downloaded ones for a flat monthly fee.

The three parties were vague as to any details of the partnership (roll out date, pricing, specific services offerings), but one thing is crystal clear: making Rhapsody a more powerful iTunes alternative will only further erode Apple's hold on the digital music market.

Liz Gunnison