Harvey Norman has dived into the digital downloads market, launching an online music site called ChannelGo.com.au.
The e-commerce site offers digital music downloads at $1.69 per track and $16.99 per album. Credit for purchasing the songs is available via pre-paid download cards sold at Harvey Norman outlets. These download cards can also be topped up online using a credit card.
While reticent to discuss the strategy behind the move, Harvey Norman's general manager for computers and communications, Rutland Smith, said the retailer was conscious of defending its position as the number one technology retailer in Australia.
"We see ChannelGo as one more way of ensuring we stay ahead of the game," he said. "We are one of the biggest retailers of MP3 players and we wanted to offer customers a total solution."
The content and back-end to the e-commerce site has been supplied by aggregator, DestraMusic.
Smith said the retailer had also worked very closely with Intel and Microsoft to optimise the download service for distribution of music content around the home.
Intel national marketing manager, Kate Burleigh, said Harvey Norman asked for assistance to ensure downloads were optimised for wireless streaming via media adapters.
Intel and Microsoft were also approached to ensure the digital rights management protection built into ChannelGo downloads would permit users to distribute music to multiple devices around the home.
"Sometimes the digital home concept suffers due to file format issues - with certain file formats not working on certain devices," Burleigh said. "We have done work [for Harvey Norman's new site] to make sure it's a seamless experience."
In return, Harvey Norman has offered 'subtle branding' to Intel, including display advertising on its download cards.
Microsoft has also got in on the act, recommending ChannelGo as its 'spotlight content' on the Windows Media Center interface.
Burleigh applauded Harvey Norman for its willingness to take risks on such new ventures.
"Over the years, Harvey Norman has been very progressive in its attitude toward embracing new technology," she said. "This is another example of being a trailblazer."
Burleigh expected the retailer would use the service to spur hardware sales, in the same way its digital camera sales complement its digital photo print service.
"I think we'll see more retailers doing it," she said. "The challenge and opportunity for other channel companies is to look at new digital technology and figure out how to make money out of it. An ideal way is to connect services to traditional hardware sales."