Cut price online CD / DVD retailer CD-Wow has announced the launch of a digital music service that will offer downloads alongside CDs. It wasn’t so long ago that CD-Wow were facing potentially terminal legal action against them from the music industry for contravening parallel import restrictions on their CD business.
The digital music market is becoming increasingly congested as an ever growing number of services go after what is still a relatively small paying audience. But as I’ve said many times before in this blog, even though there will be a shake out, the market will support numerous players with distinct offerings optimised around diverse audience segments. However CD-Wow has built its business around highly competitive pricing so their challenge will be whether they can make their OD2/Loudeye powered service significantly cheaper than other stores and services. Unless they are willing to loss-lead they’re not going to be able to do so across the breadth and depth of a mainstream catalogue. So whilst CD-Wow endeavor to provide ‘best value always’ in the digital music space they might have to settle for ‘just as good value always’.