Nokia Comes With Music
Mobile phone manufacturing giant Nokia Corp. is preparing for the October release of “Comes With Music”, a venture into the realm of digital downloading. The new service could change the current subscription model industry-wide and challenge Apple’s domination of the digital music industry. Nokia has received both critical and complimentary reviews about the endeavor.
The Comes With Music model is an innovative approach to the existing subscription model, providing music lovers with a year of unlimited access to 2.1 million tracks licensed from the catalogues of Universal, Sony BMG, and Warner Music Group1. Although this is only about a quarter of the titles available through iTunes, Anssi Vanjoki, Nokia’s Executive VP and General Manager of Multimedia, insists that, “even if you listened to music 24 hours a day, seven days a week, you would still only scratch the surface of the music that we’re making available.”2
Traditionally, subscription music services like Napster and Rhapsody provide their customers with digital rights management (DRM) encrypted music that prohibits songs from being played once the service is discontinued. The big incentive for Comes With Music is that even after your subscription expires, you get to keep the tracks you have downloaded and can continue to play them on your phone and computer. Thanks to unlimited downloading, this service also enables subscribers to share songs with one another, creating a social network of music fans while providing promotion for artists.
So just how much does this groundbreaking subscription design go for? The service is actually included in the price of the mobile phone. At the moment, Nokia’s 5310 is the only handset available with the Comes With Music offer, but they look to options of expanding in the future. Those who expected a high-tech gadget comparable to the iPhone may be disappointed, as this current handset falls into a mid-range price bracket, and is neither extravagant nor technically forward. Taking into consideration the current economic decline and aiming at a somewhat younger demographic for whom the iPhone may be too costly, Nokia felt this to be the most suitable option, but also hope to introduce another handset alternative by Christmas. “We don’t determine strategy based on the competition,” insists Vanjoki. “The consumer is our compass.” 3
Although being touted as “free” by some reporters, implying that Nokia is contributing to the devaluation of music, Nokia managers adamantly refute such accusations and counter with the argument that they are in fact doing the opposite.
“[Music] is absolutely not free with Nokia,” emphasized Tom Erskine, Nokia’s marketing director. “It has a value. It will be ‘included’ – it’s an important distinction. It’s pay once and download unlimited music. If we advertised it [as being free music], first it would be a lie and second it would devalue music. We’re trying to strike a balance – not a ‘freemium’, not a ‘premium’”4
“This is a unique proposition”, added Simon Ainslie, Nokia’s UK managing director. “Nobody has launched an unlimited music service that allows you to keep your music with no catches. What we are trying to do is bring back some value to the music industry from people who are not paying for music. There are a lot of parents who would like to legitimize their children’s purchasing of music.”
Nokia also plans to embark on a major marketing campaign this holiday season, hoping to have the Comes With Music range be the top seller this Christmas.
Officially launching October 17th, 2008, Nokia’s Comes With Music phone will be introduced initially in the UK, exclusively through British retailer Carphone Warehouse. Other service providers are in negotiations, but nothing has been confirmed.
It is also unclear when this operation will be expanding into other countries, but the ten nations in which the Nokia Music Store is currently available will undoubtedly be next in line. Reportedly, Nokia hopes to have the service in Singapore and Australia by the end of the year. North America will have to hold out as licensing negotiations with record companies in the U.S. are conducted and a repertoire of artist downloads compiled. Nokia has yet to finalize an agreement with EMI or any of the independent music labels in the UK, but negotiations are still in the works.
“This is a new proposition that requires a new way of thinking from the music industry,5” stated Nokia representative Tero Ojanpera. And it certainly does. But considering the current state of the music industry, and the continuing decline in music sales, a decisive move must be made. Nokia is implementing this new model in hopes of finding a way to give music lovers what they want and the music industry the financial benefit it needs.
By Robyn Jesson
Footnotes:
1. http://www.xbitlabs.com/news/mobile
2. http://www.nokia.com/A4136001?newsid=1172937
3. http://www.guardian.co.uk/technology/2008/sep/02/nokia.nokia
4. mocoNews.net – “Nokia Distances Itself from ‘Free Music’ Claims
5. http://www.businessweek.com/globalbiz/content
