Nokia’s “Comes With Music” Model is Uncompetitive?
As 2007 came to a close, Nokia announced an exciting initiative that awarded a year’s worth of unlimited free music downloads to purchasers of a new N81 handset. The name of the service, "Comes with Music", might not be the most creative moniker but the service itself is a breakthrough. At first CWM only included Universal’s catalog but we all learned late last month that EMI has now hopped on board as well. The concept is attractive to end users and the music industry alike; users get to download as much free content as they can for a full year and the music is theirs to keep with no expiration, and record labels increase revenue. Win, win. The latest related news swimming around the internet is that Nokia’s deal with Universal has them forking over between $30 – $35 per handset sold that is bundled with CWM. A presumably similar deal was struck with EMI so let’s call Nokia’s cost $60. Several bloggers are postulating that the weight of this cost is too much for Nokia to bear. The complaint is that all or a large percentage of the cost of CWM will be built into the handset, resulting in retail prices that are not competitive. Really? Let’s say Nokia’s cost is $60 and they conservatively absorb 30% of that, or $18. That makes the CWM handset $42 more expensive than the same handset without CWM. Is that not competative? If Nokia offered to sell us a CWM-less handset for $400 or the same handset with a year’s worth of unlimited free music for $442, you can be that we’d be in for the latter. Think about it; $42 is just over the cost of four iTunes albums but you don’t get four albums, you get unlimited music for a full year! Is that really uncompetitive?
Before the naysayers come along, let’s be sure to spell the details of the CWM ‘deal’:
1. The Nokia Music Store is typically setup exactly like iTunes. Each song costs X, and is the same whether downloaded over PC or OTA. You get a copy for your phone and your PC, can sync over cable unlimited. Can move the license to 5 different devices (PCs/Phones) before it expires.
2. During your 1 year of CWM, everything in the music store is free. Same license, same deal, just no cost.
3. After your 1 year, the store prices revert to the regular retail price, so you can continue to build your collection at the same cost as iTunes.
4. In fact, the only real difference is PlaysForSure instead of FairPlay (or whatever the iTunes one is called). Other than that, it’s like having a year of free iTunes Music Store access.
The benefit to Nokia is that for a year, you get into the habit of downloading music straight to your handset, and getting comfortable with their music offering, cost-free. They’re hoping a year is long enough to build the habit and that you’ll continue the habit after the year.
Wow, seems like know one cares. Guess you need some more iPhone coverage. Apple a tremendous marketing machine, give me free music downloads for a year or an 3G Apple iPhone I’m still choosing an iPhone. Is there something wrong with me?
No thanks…with all the restrictions iphone puts on the music you do download I will take nokia. Just the fact I can’t bluetooth a song to a friend like on a bb pisses me off…in fact its the reason I went with the curve.
Another annoying iphone issue is the fact that you have to pay an additional amount to make a song a ringtone. LAME!
I am technologically claustrophobic and if I find restrictions it turns me off. I want a handset that keeps my music free. If nokia is anything like my curve then it will be a winner if its like an iphone not many people will be interested.
Could Nokia ape Apple’s ad design any more closely?