Nokia to Offer Free Universal Music

Number one mobile handset maker Nokia announced at its annual Nokia World conference in Amsterdam that it has inked a deal with Universal Music which will bundle a year of free access to music from Universal artists with selected Nokia handsets under a new program dubbed “Comes with Music.” And, once the year is over, customers can keep all the music they downloaded—it won’t expire or de-activate itself.

“We set out to create the music experience that people are telling us they are looking for—all the music they want in the form of unlimited downloads to their mobile device and PC,” said Nokia executive VP and multimedia general manager Anssi Vanjoki, in a release. “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. ‘Comes with Music’ fulfills our dream to give consumers all the music they want, wherever they want it, while rewarding the artists who create it.”

Financial terms of the deal were not disclosed; however, industry watchers speculate Nokia will be paying Universal a per-handset fee for the Comes with Music capability, and perhaps an additional royalty for aggregate downloaded music. (Recall that Universal receives a royalty for every Microsoft Zune sold.) Nokia and Universal did not unveil the technical details of the Comes with Music plan: Universal has been experimenting with offering DRM-free music through online sales channels, although it seems unlikely the company would be willing to give away DRM-free music to Nokia handset owners.

The Comes with Music offering will launch in the second half of 2008, and will initially include music from Universal Music International; Nokia says it is in discussion with other music labels about participating in the Comes with Music program.

Industry watchers see offering free music to handset owners as a way to strike at the market dominance of Apple’s iTunes music store, but also to try to reduce the appeal of music sharing via peer-to-peer networks and other mechanisms. If Nokia (and Universal) can make it easy (and free) for users to get the music they want—for free—just by buying a phone, perhaps those users would be less likely to illegally download music.

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