SAN FRANCISCO — Full-track downloads are spinning their wheels and subscription services are falling on deaf ears. So Nokia Corp. and its music-industry partners are hoping music lovers will shell out for devices that come with music.
The Finnish manufacturer-cum-Internet services provider last week offered a few more details about its Come With Music service, which offers phones and one year of unlimited song downloads for a single — but still undisclosed — price.
The offering is slated to come to U.K. customers next month through 800-plus
Carphone Warehouse outlets as part of Nokia’s umbrella service, dubbed Ovi.
“The a la carte mobile content model is a bit of a disconnect for consumers,” Warner Music Group EVP Michael Nash told a late-arriving crowd during the opening keynote at Mobile Entertainment Live yesterday. “You look at the (mobile music) space, and the fundamentals are still there. . But . there are a number of disconnects.”
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Indeed. Carriers have failed in their attempts to become a kind of mobile iTunes due to a host of factors, including clumsy user interfaces, outrageous charges for over-the-air downloads and overly sophisticated side-loading systems. And while Verizon Wireless has overhauled its pay-per-download offering in favor of a subscription service (with partners MTV and RealNetworks’ Rhapsody), consumers have consistently been reluctant to rent their music by the month rather than own it outright. Those failings have been especially disappointing for the music industry, which largely views mobile as a critical buoy in a market where illegal file-sharing is rampant and CD sales are dissolving.
Meanwhile, customers have more choices than ever about which content to consume wirelessly. A second discussion offered this tepid update from Jonathan Barzilay, SVP of programming and advertising for MediaFLO USA, which powers broadcast video services for AT&T Mobility and Verizon Wireless: “Every day I get into the office and I get an e-mail about how many people signed up (for MediaFLO service) the previous day,” Barzilay said, citing carrier agreements prohibiting him from discussing uptake figures, “and every day I smile.”
But while the business case continues to unfold for on-the-go video, music seems a natural fit for mobile. Consumers have swarmed to the concept since the first days of the transistor radio, and the Walkman and iPhone are proof that uses are happy to pay a premium to take their tunes with them. And Nokia isn’t the only one throwing the Comes With Music concept at the wall and hoping it sticks: Omnifone earlier this year unveiled MusicStation Max, a “pre-licensed mobile music” service, and Sony Ericsson reportedly plans to launch a packaged phone-and-music service in Europe by year’s end.
Carriers have seemed loath to play ball with third-party services, though, fearing cannibalization of their own branded services. Nokia has yet to name an operator partner for Comes With Music in the United Kingdom, and Omnifone has made no announcement regarding carrier agreements.
If consumers embrace such services, however, operators will have to take notice and either forge deals with the third-party providers or offer competing services. Either way, the concept could be a catalyst in the space.
“There’s no reason why network operators can’t create bundled-music propositions to customers,” Nash said. “I think this is really the beginning of the evolution of the space.”
