Wal-Mart Custom CD Music Service: No Burner Required

Wal-Mart Stores Inc. has launched an online music service that lets music lovers create personalized CDs. The service is being developed as an alternative for people who don't have access to digital-music CD burners and prefer a physical music collection rather than downloaded tracks on an MP3 player.

The service lets customers choose tracks from more than 400,000 songs--rock, easy listening, country, classical, and more--all from Wal-Mart's Web site. There's no downloading required, nor is access to a CD burner or a portable digital music device necessary.

Customers select songs that Walmart.com burns onto a physical CD and ships. "The customer orders music from the online catalog and chooses the title and cover art to personalize the product before the order flows through the system to the production facility where the CD is produced," says Kevin Swint, Walmart.com's director of media categories. "The process is automated."

Walmart.com's Northern California IT department created the online music service with an unnamed partner, Swint says. It ties into Walmart.com's music "download platform on the back end, so human intervention isn't required until the CD is packaged by hand." The first three songs cost $4.62, and 88 cents per additional song.

In-store kiosks equipped with computers linked to Walmart.com also are being tested in select stores. Customers can come into select Wal-Mart stores and order custom CDs online through a kiosk just as they can shirts, shoes, and patio furniture. A similar service is being explored for movies as Hollywood studios prepare to transition from celluloid to digital content.

The custom CD service is designed to make the selection, customization, and checkout process easy, requiring just a few clicks. The process works like this: Customer select the music tab at www.walmart.com/music and click on "Create a Custom CD"; they then search or browse for a song and click "Add to CD." They can continue to add songs until the play list is complete or the CD is full. Next, they click "Organize and Buy" and enter the shipping address and complete the purchase. The CD is then shipped to the customer.

The custom CD music site is an addition to Walmart.com's downloadable music site, which launched in March 2004. Apple, Microsoft, and Sony all have online music sites, too. But at the forefront of online music, RealNetworks Inc. on Tuesday introduced a version of its Rhapsody music service that allows nonsubscribers to access and listen to 25 songs from its million-song library free each month. "Rhapsody's subscription business doubled from 2003 to 2004," says Rob Glaser, chairman and CEO of RealNetworks.

RealNetworks now boasts more than a million Rhapsody subscribers and 25 million visitors monthly to its Rhapsody music site, with 3 million on-demand music streams downloaded daily. Its online music store lets users transfer songs to portable devices.

RealNetworks leads in online music content, but Wal-Mart's new service is confirmation that retailers are finding new ways to capitalize on the move to digital media content. Starbucks Coffee Co., for example, in October began rolling out a similar service in select coffeehouses.

The Hear Music media bar lets Starbucks customers create personalized music sets and burn them to a CD. The Hear Music media bar is powered by Hewlett-Packard software, hardware, and services, including tablet PCs, workstations, printing technology, networking, and design and integration services. The touch-screen interface enables customers to create their own CDs.

The Hear Music media bar debuted in Santa Monica, Calif. Today, 45 Starbucks-owned stores have this service--30 in Austin, Texas, and 15 in Seattle. The next phase will be announced later this year. At participating locations, Starbucks placed self-service screens throughout the store. A stylus pen and touch-screen computer let customers choose from more than 150,000 songs covering an array of artists. Consumers use the HP equipment to burn the chosen music to a CD. Purchases can be made using a Starbucks' debit card or most major credit cards.

There are plans to let customers download music to MP3 players or portable USB drives at Starbucks stores. Says a spokeswoman, "Digital fill-up stations are part of our overall vision, but we are not providing details on this aspect at this time."