According to reports, the beta version of the online store sells digital versions of approximately 3,000 major studio flicks and shows from large television networks, including Fox Broadcasting. However, content from ABC, CBS and NBC are currently unavailable, although the company says it hopes to add shows from those networks in the near future.

Wal-Mart is offering films from $12.88 to $19.88 and individual TV episodes for $1.96, four cents less than Apple's iTunes store.

Unlike some offerings, Wal-Mart says it will not rent films online and can only be played on a PC or transferred to Microsoft Windows media-compatible portable digital players. The movies will not play on Apple computers or the popular iPod. In addition, movies bought from the Wal-Mart store can't be burned onto a DVD, although the company says it hopes to offer the option by the end of the year.

Analysts say that the biggest impact of Wal-Mart's entry into the digital download business may be that it now frees studios to cut deals with other online services.

Wal-Mart also recently announced it has turned to software giants Microsoft and Novell to build out the company's Web operations.