Mystech: Note the bit about sterilizing song lyrics and removing songs that are anti-Wal-Mart…

(Wired) LITTLE ROCK, Arkansas — Wal-Mart Stores began a test Thursday of its new 88-cent-per-song online music service, with a price that undercuts the 99-cent standard of its competition. The site was in operation Thursday morning, signaling that the world’s largest retailer is moving to capture more of the music market.

Wal-Mart executives are fond of saying 20 percent of their customers don’t have checking accounts. But in Thursday’s announcement, Walmart.com senior category manager Kevin Swint said 64 percent of Wal-Mart customers are online.

“We see digital music downloads as a natural extension of the music selection offered in Wal-Mart stores,” Swint said.

The company plans to see what customers like and don’t like about the service in the months ahead and formally launch the service in 2004.

The site has “hundreds of thousands” of songs, available in WMA (Windows Media audio) format. The songs can be transferred to compatible portable devices, burned to a CD or played on Windows-compatible PCs, the company said.

“The test phase for this new service is important to gauge customer feedback, so that we can deliver a quality music downloads service that customers will want to use time and time again,” Swint said.

Walmart.com spokeswoman Cynthia Lin would not say what the company’s profit expectations are for the service, which she said would formally launch in the spring. Wal-Mart is known for doing everything it can to keep costs down. Lin said the company employed that method in developing its online music site but would not say whether it negotiated lower rates for what it pays for songs on the site.

Lin said the site will abide by the same content format as found on CD racks in Wal-Mart stores, which don’t sell music with content the company deems offensive. On the website, the company notes that some songs are flagged as “edited” to denote a song was recorded without offensive lyrics.

Apple Computer’s iTunes offers songs for 99 cents apiece. Roxio and Napster are players in the sector, and Microsoft is to crowd the field next year when it introduces its own song-downloading service.

Wal-Mart said it developed its online service with Anderson Merchandisers and the songs will be provided by Liquid Digital Media, previously known as Liquid Audio, which was acquired by Anderson Merchandisers in January.

Thursday morning, the Walmart.com music site featured the club mix of OutKast’s “Hey Ya!” as its top download. Its No. 9 entry was “First Cut is the Deepest” by Sheryl Crow.

In 1996, Wal-Mart refused to stock a CD by Crow that contained lyrics criticizing Wal-Mart for selling guns. Her greatest hits CD is featured on the site with a greatest hits CD by country performer Alan Jackson under the heading “All the Best.” The Crow CD doesn’t feature the offending song, “Love is a Good Thing.”