Universal signs Nokia to offer subscribers one year of ‘free’ DRM-laden music

“Nokia managers would never admit to being influenced by the Apple iPhone, which mobile phone industry insiders regard as clever but technologically unimpressive,” Jack Ewing reports for BusinessWeek.

MacDailyNews Take: The phrase “technologically unimpressive” must have been either fed to the unwitting business publication writer or said scribe came up with the flawed conceit himself. The iPhone is actually quite impressive technologically, as are its users since they can actually use the capabilities the device offers while others who are shackled with much lesser technology (but perhaps have a few more megapixels or something else here or there) struggle to use even the most basic features due to incoherent user interfaces requiring incomprehensible 100+ page instruction books. Features that go unused due to poor design are worthless and people who judge technology on specs alone are true idiots.

Ewing continues, “‘We don’t determine strategy based on the competition,’ insists Anssi Vanjoki, Nokia executive vice-president and general manager for multimedia. ‘The consumer is our compass.'”

MacDailyNews Take: And that compass points straight to Apple’s iPhone.

Ewing continues, “Beginning next year, higher-end Nokia phones will come with a built-in music service offering unlimited downloads of songs for a year. Nokia has signed up Universal Music to provide its catalog.”

MacDailyNews Take: Universal CEO Doug Morris, a 68-year-old technophobe, is trying to break Apple’s dominance before his free money-for-nothing conveyor belt grinds totally to a halt. Read all about it here: “Universal Music CEO Doug Morris looks to break Apple’s iPod+iTunes dominance.” Morris seems to have forgotten, or doesn’t understand, that all of his music is already available for free — forever, not just for a year — via P2P file sharing. Does he realize that people pay for his music via Apple’s iTunes Store, unlike those who use Acquisition, Azureus, LimeWire, Transmission, etc.? And Morris isn’t even the stupidest one in the room: he got Nokia to pay him for a year of free music on the promise that they’d sell more phones to people who already have access to the same exact free music (plus vastly more free music – all without any limits whatsoever) than Nokia will be offering through this ill-considered deal.

Ewing continues, “‘Comes With Music,’ as Nokia is calling the service, seems aimed at preventing Apple from dominating mobile music the way the U.S. company’s iTunes service has dominated sales of digital music on PCs and MP3 players. Consumers will certainly have less incentive to buy music from iTunes if unlimited downloads from the Nokia service are included in the price of a new phone. The songs can be played on both the Nokia phone and on a PC, and all the material downloaded in the first year can be kept after the end of the free subscription period—a first for the recording industry.”

MacDailyNews Take: This idea sucks worse than Microsoft’s Windows UI department. The music is already available for free. Why would we downgrade from an iPhone to pay for some Nokia thing when we already have access to free music if we want it?

Ewing continues, “Vanjoki wouldn’t disclose terms of the deal with Universal except to say that it will be profitable for both companies. In any case the music companies have an interest in ensuring that the online music business isn’t dominated by a single company such as Apple with the power to dictate prices. Of course, the unlimited downloads deal is good only for a year. But Nokia is betting that by then customers will be so hooked on the service they will be willing to pay more. The fee after a year hasn’t been determined, Vanjoki said in an interview.”

Full article here.

MacDailyNews Take: The first hit is free, kid. Is mimicking the business model of a street corner drug dealer really the best course for Universal and Nokia to chart? Especially when users have been making their own and sharing it for free everywhere for years?

Again, the music is already available for free, without limiitations, rendering Universal’s and Nokia’s big idea completely moot before they even press the button to explode it on the launch pad (sometime in mid-2008 is what they’re promising). And, if, as the Nokia stooge asserts in the article, “it will be profitable for both companies,” then Nokia is paying Universal less than it will be charging its suckers for devices, be they consumers or carriers. In the cases where they’re carriers, the carriers will be charging the end consumer instead of Nokia, so those lucky suckers get marked up twice. There is no such thing as a free lunch. Make no mistake: people who fall for this “Comes With Music” scam will be paying for their music and probably paying more than they would via iTunes.

“The music companies have an interest in ensuring that the online music business isn’t dominated by a single company such as Apple with the power to dictate prices” because they want to keep that pricing power restricted to the music cartel’s existing four members so they can continue along with the business of overcharging as usual. One last time, they forget or want to forget that the music is already available for free. The consumer has the power now; not the big four dinosaurs; not Apple. The consumer. This idea of Universal’s would only have a chance of working if piracy didn’t exist (but, it does, and in overwhelming popularity vs. paid online music sales). Can Universal and, by extension, Nokia really be that stupid? Why, yes, it seems they can. Being unable or unwilling to grasp basic market realities is a condition which does not bode well for future business success.

Dinosaurs do still roam the earth; Doug Morris is a prime example. His greedy, backwards thinking begets counterproductive ideas that end up devaluing the very product to which he seeks to ascribe value while driving paying customers toward piracy. If music is “free,” then there’s no such thing as stealing it, right, Doug?

UPDATE: 5:43pm EST: David Chartier reports for Ars Technica that “Nokia’s ‘Comes With Music’ implementation will be handicapped by DRM. In fact, Nokia chose Microsoft’s PlaysForSure DRM… ‘Comes With Music’ tracks won’t be compatible at all with the iPod… Tracks can be downloaded via Nokia’s phones or PCs, and the DRMed tracks will remain playable even after the one-year subscription period finishes. Here’s the kicker though: In order to renew the subscription and regain access to new music for another year, Nokia says consumers can purchase a new device. Burning a CD of any track(s) will require an upgrade purchase for each track.”

Chartier reports, “Nokia says the cost of a ‘Comes With Music’ subscription will be included in the price of the device.”

Full article here.

MacDailyNews Take: Obviously, as far as Universal Music and Nokia are concerned, what “Comes With Music” are many strings. We predict failure.

54 Comments

  1. Universal would rather give their music away for free than to sell it via iTunes.

    It doesn’t make a whole lot of sense to me, but there again, few decisions by the major record labels have made much sense in recent years.

  2. Any free stuff cannot possibly be profitable. So therefore it isn’t free. There has to be a cost tied into the download. You have to look at the rate plans to look at the actual costs of the downloads. And what about the cost of the actual phone?

    Always be wary of anything offered for free. All

  3. It’s highly likely that they will be quite successful in this endeavor – for those first year subscriptions. But when they start charging rental fees down the road, customers will walk away with the ‘unlimited’ material that they’ve already acquired and are allowed to keep, and make damn sure that they acquired as much as tehy could ever want or need before they leave. After stuffing all your drives with ‘all you can eat and all you can carry’, it hardly seems likely they’ll ever need to buy music again.

    The problem with music consumption in the digital age is that it becomes so easy to acquire so much music so portably and permanently that you a) don’t EVER need to listen to broadcast again – and therefore don’t get exposed to new music very often, and b) create permanent collections that will never have to go away (and can be shared with your kids, their kids, and so on). Even if a new storage medium comes out, there will be nothing to prevent reloading all of your old media files on it.

    It’s the end of the world as we (old farts, anyways) knew it, and I can’t tell if it’s good or bad.

  4. Universal, this reeks of spitefulness. Just because you had a spat with Apple (& Steve Jobs), do you really have to act like this? Maybe if Steve sent over a dozen roses you’d feel better? ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  5. @Wally

    Wally is correct. The music may be free, but I suspect the cost of using bandwidth to download it on your Nokia phone will cost a pretty penny. What will happen is users will download a few “free” songs, then look at their cell phone bill and discover their “free” music really cost them well over a buck per song in bandwidth costs (likely a lot more than a buck).

    At that point I can hear the sound of head slapping as these people realize they could have paid 99 cents to download the song at iTunes.

    While free is a very, very good price, this ain’t free.

  6. And of course the question that has not been answered is whether or not the DL’ed tracks are portable. Can one transfer the tracks to a computer for storage or playback? Can one burn the tracks to a CD for playback or archiving? If my phone breaks, can I transfer my tracks to another device? If the Nokia / Universal service doesn’t allow for one or more of these scenarios, it is already DOA. Portability is one of the main reasons why Apple is so successful with the iPod and the iTS, an issue that all of Apple’s competitors fail to grasp.

  7. So what happens to music you have downloaded onto your s when you cancel your phone service or get another make of phone?

    And I wonder how much money its gonna cost you to keep the ‘free’ music?

  8. “When the full details come out, I bet we’ll discover that unless you continue a Nokia “Comes With Music” contract on a phone (in which case you’re still paying for the subscription), or never change the PC you’re using when the phone terms expire, you will lose the music. And good luck burning a CD.” thesmallwave.com

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