October 31, 2006, 12:00 AM

Best Buy takes on Apple with its own digital music store

Teaming up with RealNetworks Inc. and its Rhapsody digital music service, Best Buy Co. Inc. has launched the Best Buy Digital Music Store. Customers can subscribe to a monthly service or buy songs individually.

Apple Computer Inc. continues to dominate the digital music market, accounting for 85% of songs downloaded in the U.S. from the Internet, according to data from Nielsen SoundScan. Moreover, Apple continues to roll out millions of its popular iPod media player, selling 39 million units in the fiscal year ended Sept. 30, and its customers had downloaded 150 million songs as of Oct. 14.

Now Apple, ranked 15th in the Internet Retailer Top 500 Guide to Retail Web Sites, has new competition from consumer electronics leader Best Buy Co. Inc., which recently launched the Best Buy Digital Music Store at BestBuy.com, ranked No. 11 in the Top 500 Guide.

Powered by RealNetworks Inc.’s Rhapsody music service, the Best Buy Digital Music Store offers a broader range of service than iTunes, which only sells downloads of individual songs at 99 cents each. In addition to 99-cent downloads, Best Buy lets customers subscribe to a monthly service of unlimited music access for $14.99.

Coinciding with the launch, Best Buy is promoting both online and in its stores the sale of SanDisk Corp.’s SanDisk Sansa e200R Rhapsody MP3 music players, which have been optimized to work with its music store, the retailer says. The digital music store will also accommodate any compatible MP3 player, it adds. Subscribers can download music to a computer or to an MP3 music player without limits as long as their subscription is active.

“Our goal is to deliver entertainment to our customers how, when and where they want it, and to help them have the best possible experience,” says Jennifer Schaidler, vice president of music for Best Buy. “Whether they want to purchase downloads or a subscription and have access to all the music, we’re giving consumers the ability to enjoy entertainment on their terms.”

But Best Buy and Apple are hardly enemies. Best Buy also sells iPods along with other Apple products in its stores and online.

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