Nokia And Universal Up Music Download Ante; Will Offer Free Year—And Right To Keep
By Dianne See Morrison - Tue 04 Dec 2007 03:58 AM PST
Nokia (NYSE: NOK) and Universal are upping the stakes in the music download market, teaming together to offer free 12-month access to music from Universal’s artists to buyer’s of Nokia’s music phones. The kicker: people will be able to keep the songs once the free-offer period expires. Consumers will have to buy a Nokia handset that supports the service, which isn’t available yet. A unique PIN number will let users into the music store, where they can then download songs to their phone. Nokia wants to get other labels to sign up to the “Comes With Music” product, which it hopes to launch early next year.
In an interview with Reuters, Rob Wells, SVP for digital operations at Universal, said that the deal with Nokia represented the way consumers would want to get music in the future. Wells: “This is a step towards where this business we believe will be moving to in two to three years time. ... We are moving into an access world. Consumers will have access to all the recorded music available through the price of the device, or the price of service, or the price of broadband.”
No word on the financial terms of the deal—Wells merely said: “Unless there was enough money for the world’s biggest record company we would have not agreed to the deal.” No word either on what happens to the business deal at the end of the free-offer period.
Music downloads are dominated by Apple’s (NSDQ: AAPL) iTunes store, and Nokia and Universal’s move is expected to put pressure on Apple. Whether it puts a dent in illegal downloads is another matter. Nokia has had its own share of problems trying to get music content on to its handset. It opened an online music store in the UK in November, but shortly after its launch, Warner Music said it would not participate citing piracy concerns. The deal is also a chip at mobile operators who have tried desperately to control consumer access to content. Nokia has been moving into mobile content with a number of purchases and content deals, such as its recent purchase of electronic mapping firm Navteq. The mobile phone maker maintains that content will help grow the handset market.
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