At the recent Nokia World 2007 event in Amsterdam, Nokia and Universal Music Group announced an incredibly innovative initiative called ‘Comes With Music’. While most people are saying that it’s a nice thought, but horribly flawed, I’d like to point out why I think this will be one of the most successful music campaigns ever for the two companies.
Let’s cover the facts first, just in case you’re not familiar. Nokia Comes With Music will be a line of unannounced music-centric devices in 2008 (and probably beyond). There are no official announcements as to whether this will be limited to Nseries devices, or whether Nokia’s S40 products will be included. Prodding the music guys at the event yielded no further information, either.
Basically, with Nokia Comes With Music, your new Nokia, well, comes with music. One year of music, to be exact, from Nokia’s Music Store and Universal Music. I was able to find out that this will be directly integrated with the Nokia Music Store in its current form, and Nokia plans to sign on the other labels before officially launching the initiative.
For one year, with selected handsets, users will receive unlimited downloads from the Nokia Music Store. These tracks will be the same Windows DRM that the Nokia Music Store currently offers, and allow the user to listen to the track on the PC and one device, with 3 license transfers included before you must purchase the track again. These tracks will be downloadable via the mobile handset OR the PC, and users will need to register a Nokia Music Store account and enter a code printed on in in-box voucher.
When asked how this deal could possibly be profitable, Rob Wells, Vice President, Digital, Universal Music Group, stated that Universal will be paid from the actual sale of the handset. I was also able to confirm that after the one year period is expired, the tracks downloaded will still be playable, and the Nokia Music Store will continue to offer the user new tracks at the current pricing – no subscription, just a pay-per-track transaction. Ars Technica reported that Universal revealed a $5/month cost to Nokia for each handset, according to a recent program they announced. If Nokia passes that cost directly on to the consumer, this is a mere $60USD increase in retail handset prices. Given that most Nseries devices cost around $500USD, this is not a large sum.
Before I address the concerns that others have expressed, I want to cover a few points as to how this initiative is a guaranteed slam-dunk for Nokia, Universal, AND Consumers. Even if the consumer uses his year, and then cancels his Nokia Music Store account and never buys a Nokia product again, Nokia and Universal are still very clear winners.
The consumer wins because this is going to disrupt the digital music market. There simply is no arguing this point. Other music stores are going to have to react to this initiative in some form or fashion. The consumer pays a measly $60 extra for their handset (and, with subsidies from carriers, could potentially avoid this), and gets a full year of convenient music downloads, with an unlimited opportunity to explore the full library. Sure, they end up with DRM’d music, but it’s free, so who cares? I’ll touch on the DRM again in a moment.
Universal Music wins because they’re getting paid by Nokia for the tracks, and are thus (apparently) able to pay the artist and everyone else involved. Universal Music also gets the positive press as being one of the first record labels to actually try something innovative with digital music. Good or bad, one thing that the internet has been calling for endlessly is for the record labels to take a fresh approach to digital music. If the consumer doesn’t purchase another track after the year is expired, it’s no real loss to Universal. They still got paid.
Nokia wins the most, in my personal opinion. First, Nokia will likely see a large increase in sales of Comes With Music handsets as opposed to previous music-centric Nseries. If you’re at the phone store and can pay $400 for an iPhone, with which you have to pay for music, or pirate it, or pay $460 for a Nokia Comes With Music handset that gives you a full year of unlimited music, you’re *more* likely to pick the Nokia than you would have been previously.
Nokia also wins in the marketing department. By offering consumers a year of free access to the Nokia Music Store, they will be able to spend a full year creating a positive music experience with the Nokia brand. Consumers will (consciously or subconsciously) associate Nokia with music, and will be more likely to use or attempt to use their Nokia handset as a music player. I would even argue that non-Comes With Music handsets will see an increase in the use of their MP3 playing abilities, as well, as people discover the capabilities of their phones. Nokia, like Universal, will also be able to strengthen their reputation as an innovative company in the mobile marketplace.
Yet another win for Nokia is in the numbers arena. Since Comes With Music will be connected to the user’s Nokia Music Store account, this will greatly increase registrations for the store, which Nokia surely uses in presentations to potential partners. Nokia wins all these benefits, EVEN if the consumer purchases ONE handset, uses it for the year, and then dumps the handset and Music Store Account. The odds that EVERY customer does so are pretty low.
So what about *after* the year is up? It’s been said that it takes 2 weeks for a behaviour to become a habit. Nokia and Universal are giving users one year (that’s 52 weeks, or 26 2-week periods) to build habits. These habits include the ease and convenience of downloading legal music tracks directly to their handset, immediately. If for a full year, a consumer is able to quickly and easily download any track directly to their handset for immediate gratification, I’d say it’s likely that at the end of that year, they’ll be so hooked on the experience, they’ll stick around for more, even if only for a bit.
Now, let’s cover some things that you’re not going to like, but need to be said.
This is NOT designed or intended for everyone. At Nokia World, executives stated that they had been focusing on the ‘tech leaders’, and were now moving the focus towards the mass market. This will appeal to some people, and won’t appeal to others. That’s ok. Nothing will please everyone, and there will always be some consumers who simply refuse DRM, or who don’t like Nokia devices. Great, they can ignore this.
DRM is not always bad, and audio quality is *not* a selling point. I hear time and time again that Windows DRM sucks because it’s such crappy quality. Let’s look at this from a general consumer standpoint. Where do most people enjoy their music? What is the environment like? When most people listen to music, is that the *only* thing they are focused on, or is it used more in the background? I would argue that for the general consumer, music is a soundtrack. They’ll sing to it in the car, have it on in the house while cleaning, or some other similar setting. In those cases, they’re likely listening to music over loudspeakers, not through headphones. In this instance, there’s so much interference between the speaker and the person’s eardrums. Outside noises, phone calls, walls, kids, etc. Thus, given the typical listening scenario, most consumers wouldn’t be able to tell a difference between a WMA file and a FLAC file, and if they could, likely wouldn’t care.
moves such as Comes WiNokia is a for-profit company. This move is designed to encourage people to live what I like to call the Nokia Lifestyle. Withth Music and Ovi applications, products, and services to enrich and enable your life. They have no reason to make sure that Comes Wi Music tracks work wi, Nokia is very obviously wanting to make it extremely easy to use Nokiathth a Zune or an iPod, because it’s not designed to increase their Music Store sales or usage. Comes With Music, just like every other Nokia initiative, is designed to sell more handsets. Period, end of story. It’s not absurd, either. Apple does it with iTunes and the iPhone, the same thing I’ve done with my Nokia’s for years. It’s integrating your PC and Mobile lives easily. To hear it from Nokia, moving life to the 4th screen. You know what else? It’s ok for big corporations to make profits. That’s how they got big in the first place, and that’s how they’ll continue to offer products and services that make your life easier. If you don’t agree, then it’s obviously not designed for you. Move along.
However, it’s important to point out that nothing is perfect. There are a few things about the Comes With Music thing that I’m not impressed with. The first is the regionality of it. Since it’s directly integrated with the Nokia Music Store, obviously it’ll only be valuable if you have access to the Nokia Music Store, which no one other than the U.K. currently has. Granted, they’ve got till next summer or so to launch more locations, but they’d better hurry.
If Nokia isn’t able to sign more labels up for the service, it will really hinder the usefulness and market impact. Universal Music has one of (or the, not sure) largest music libraries, but there’s obviously still artists that they *don’t* have. Nokia needs to be able to sign up the other labels for this to really make an impact.
I personally think it was foolish to announce this service at least 6 months early. What better way to give others a chance to beat you to market than to tell them what you’re doing in 6 months? Also, these long delays between announcement and launch only serve to frustrate tech leaders, if not consumers. For instance, with Ovi, it was announced in September at Nokia Go Play, and we honestly didn’t get very much more information on it at Nokia World, other than that it will launch in 2008. So why are you telling us about it? Why not wait till it’s READY, or at least 1-2 months away? It just gets old to hear about vaporware (which, to the internet, both Ovi and Comes With Music currently are, and apparently will be until well into 2008).
What do you think about the Nokia Comes With Music initiative? Do you think it’s brilliant, or completely foolish and wasteful? Why? Is DRM honestly something that concerns you, or would you really even notice if your tracks had it?
