When Wal-Mart first starting selling DRM-free music through its online store, we had one major complaint. Alongside those iPod-friendly MP3s from EMI and Universal Music, sat copy-protected tracks from the two remaining major labels that were only compatible with PCs running Windows and supported PlayForSure devices. A sure way to confuse customers and create a very poor shopping experience, we concluded.

Along with a redesign of the Wal-Mart online music store, the “world’s largest retailer” has finally ditched DRM completely but at a cost. Rather than successfully negotiating licensing deals with the DRM-free holdouts – Sony BMG and Warner Music – Wal-Mart has sacrificed music from those two labels completely (tracks from Sony BMG’s Neil Diamond seem to be the exception, reports Wired).

So why has Wal-Mart relaunched its online music store – DRM-free – without waiting till it could offer music from all four major labels? As Insanely Great Mac notes, the retailer is likely holding out for much more favorable terms, and by relaunching early is calling Sony BMG and Warner’s bluff. The majors are renown for demanding very favorable terms, which often involve substantial upfront costs and/or equity. If you’ve ever wondered why iTunes doesn’t carry DRM-free tracks from all four major labels (yet), there lies your answer.

Aside from having a half full catalog, the new Wal-Mart online music store still suffers from another major demon: the site requires Windows Internet Explorer running on XP or Vista — no Mac or Linux customers allowed.

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