World’s largest retailer Wal-Mart has begun selling DRM-free tracks in an attempt to make its music download service more attractive to customers.

Lately, competition for Apple’s iTunes service has intensified with the launch of alternative offerings, including yesterday’s announcement about the merger of MTV’s URGE with RealNetworks’ Rhapsody music download service.

Wal-Mart's decision to start selling tunes without copyright protection is not spectacular, since even iTunes has a similar offer, but it certainly signals the sharp decline in popularity of the DRM-protection software and also the fact that major retailers and record companies are beginning to understand their customers’ interoperability-related nightmares. DRM-protected songs cannot be played (if bought from iTunes) on other devices than the iPod.

Wal-Mart is currently selling songs in both unprotected MP3 format and DRM-laden WMA format, the difference between the two being registered at the quality of sound and at the price level.

While an MP3 song sells for 0.94 cents and has a 256kbps bit rate, the DRM-filled ones are cheaper (only 0.88 cents), but an entire DRM-free album can be bought for $9.22. Artists included in the offer are The Rolling Stones and Nelly, whose songs are also available on iTunes, for 0.99 cents. Wal-Mart hopes to tackle iTunes’ popularity with the ability to play songs acquired from its online store on any MP3 player out there, not just the iPod. In order to be able to play your favorite music, you’ll need the one of the three most recent versions of Windows OS (2000, XP or Vista- no Linux or Mac OSX) and any MP3 player software such as Windows Media Player or iTunes.

Record companies which agreed to sell their tunes without DRM are the ones that pioneered the rebellion against Apple’s bullish dominance on the online music downloads market, mainly British group EMI and Universal.

Both companies have started ditching the DRM a while ago, with EMI offering its entire catalogue without the copyright protection in Spring 2007. Vivendi’s Universal preferred to test the same pro-customers oriented policy for 6 months and only for a portion of its catalogue, distributing the MP3 files not only through iTunes, but also through RealNetworks’ Rhapsody, Amazon, Google and last, but not least, Wal-Mart’s online store.

Universal Music Group’s move is significant because it is the world’s largest record company and the leader (in terms of sales) of the “four giants” (Sony BMG, EMI, UMG and Warner Music). DRM-free music is not a novelty and there are plenty of online retailers that offer music from independent artists in the MP3 format, but until recently the DRM-protected music was a must for Apple in order to keep its iTunes service up and running.

Sony BMG and Warner have yet to accept the DRM-free policy, whose purpose is to diminish the influence of piracy on record companies' sales.

Amazon.com also announced it will open a digital music store later this year with millions of songs available free of copy protection technology. The internet retailer has reached an agreement with EMI, home to artists including Coldplay, Norah Jones, Joss Stone and Pink Floyd.

Considering iTunes’ popularity among users, it’s not hard to imagine why Web giants are targeting the ever expanding online music market, which is likely to receive a boost from the MP3-enabled phones sold today.

iTunes is currently the largest online music retailer in the US and the third largest music retailer for the same area. Its dominance is set to increase due to customers’ growing appetite for online acquisitions rather than CD acquisitions.

According to the latest research released by Nielsen SoundScan, in the last six month some 229.8 million albums were sold in the U.S, down by 10 percent compared to the same period of 2006.

During the same period the digital tracks sales increased 49 percent to 417.3 million.