Business Matters: Walmart Shutters MP3 Store
Business Matters: Walmart Shutters MP3 Store

Walmart Shutters MP3 Store
-- Need more evidence that the digital music world is moving to an access-over-ownership future?

Walmart is shuttering its seven-year-old MP3 store, according to a report in the New York Times. The store's last day will be Aug. 29.

The Walmart digital store has largely been an afterthought over the last few years, with Amazon's MP3 site taking on the primary duties of challenging Apple's iTunes in the digital music market. But when it first launched, Walmart made a big splash offering songs at 88 cents to iTunes' 99 cents. Of course, this was in the days of DRM, so none of the music purchased from Walmart was available for the iPod, and as such the digital retailer suffered the same lack of customer attention as all the other services that have since shuttered since then.

The Walmart store went through a few changes in strategy, relaunching in 2008 with a variable pricing model of either 74-cents, 94-cents and $1.24. It also tried making a free download available every week, and awarded anyone buying a CD from Walmart a free MP3 download.

The question now is whether Walmart is simply washing its hands of all digital music or will it attempt to get into the streaming/access model through a partnership with one of the existing services (Spotify, MOG, Rhapsody, etc.). That seems unlikely, as Walmart is a retailer with a core competency of selling products, not subscriptions.

The company's live streaming site Soundcheck will remain operational.

Pandora's Stock Continues To Slide

-- Although the U.S. stock markets rebounded Tuesday from an absolutely miserable Monday, one music-related stock continued its slide: Pandora Media. The company's shares fell 6.08% to $11.73 after sinking 7.62% on Monday. Its Tuesday low of $11.00 is an all-time low for the company. It debuted on the New York Stock Exchange on June 15.

The only Pandora news item of note Tuesday was the promotion of Steven Kritzman to the role of senior VP of advertising sales. Kritzman had been director of sales for the New York and mid-Atlantic region. In his new role, he will drive the U.S. sales strategy for the company's digital, network radio and spot radio businesses. He will also he manage Pandora's national advertising sales teams.

It was an otherwise fantastic day for stocks. Live Nation, which reported strong second-quarter earnings after the end of the trading day Monday, rose 10.71% to $9.72. Sony Corp. rose 4.34%, Sirius XM jumped 9.09% and Vivendi was up 2.27%. The Dow climbed 3.98% and the Nasdaq rose 5.29%.
(Pandora Press release)

Livio Radio Raises Funds From Western Technology Investment
-- More money is going into Internet radio -- this time the hardware side. Livio Radio has just raised undisclosed amount of funding from Western Technology Investment. That deal follows an undisclosed figured invested last month by Angel Street Capital, whose founders have owned and operated Net Radio Sales and Ando Media. Livio is a manufacturer of Internet radio products and services for the home and automobile.

Rhapsody To Ditch RAX File Format
-- Rhapsody has notified customers via email that it will discontinue support for the RAX file format in "about 60 days." RAX is a proprietary format Rhapsody used until it ditched DRM and started selling MP3 format in June 2008. This decision means purchased RAX files cannot be played on a new computer or with upgraded RealPlayer software because Rhapsody cannot re-license the tracks.

The loss of support for a DRM file format is one of the downsides of DRM, and has been seen before -- Napster stopped supporting DRM for protected WMA files in September 2010. It may be inevitable, but it's not the most consumer-friendly move. When the seller no longer supports the DRM format, the buyer is left with a less valuable, less practical product.

So how can one remedy this problem? The email explains: "To ensure that you can continue to play the music in RAX format you've purchased from Rhapsody or the RealNetworks Music Store prior to July 2008, you'll need to burn the tracks to an audio CD. You can continue to play them on your audio CD or rip them to any format you desire and play them on your PC, just like always."