Nokia’s mobile music initiative

According to the news, Nokia is negotiating with Sony BMG, EMI and Warner Music to partner with all major record labels. The company aims to distribute their content through the new Comes With Music service. Earlier Nokia have already made contract with Universal. Idea is to let owners of Nokia phones equipped with the service to download music freely for a year. Nokia is apparently offering to pay about USD 80 $ per phone to the record labels to get the deal.

Downloaded music is DRM protected and can be listened with Nokia devices only. Transferring the content to other devices is either difficult or most probably impossible. This strategic restriction increases customer’s cost of change, if she or he wants to buy a phone by competing manufacturer. It is very important part of the concept.

If (big if) Nokia gets a significant amount of music service customers, it could lower the threath of substitutes and industry competition. And if the device is a source of one sort of media, why not use it for other content too. However, I’m not yet going to change my iPod, as Apple has also increased my cost of change to do that…

Picture above used under CC licence, credits to TCM Hitchhiker.