Sony (NYSE: SNE) BMG is the second record label to join Nokia’s (NYSE: NOK) Comes With Music pre-bundled music initiative. At a London joint press conference, the pair said Nokia handset customers would get access to the label’s repertoire “for an entire year”. Sony BMG global digital president Thomas Hesse: “We think it will provide new opportunities to artists from every genre of music, and increase demand for music overall.”
Comes With Music was unveiled with repertoire from Universal in December and is due on handsets in the second half of ’08. Buyers get free tunes on the handset and PC for a year, and then must renew their device or move to Nokia’s subscription-based unlimited-access store. Hesse: “We think the habit will stay with users when the year is up. We want to build the market for legitimate music.”
What might work against the plan – the increasing trend for 18-month mobile contracts. Nokia EVP Tero Ojanperä said Nokia was discussing that issue with carriers. “We want to align the business model with the partners.” Ojanperä said global digital music sales last year were $4 billion: “If we can get even a single-digit percentage of Nokia yearly volumes, we have the potential to exceed that number. My sons would like to have the key to the candy store at no cost.”
Pricepoint for Comes With Music handsets is not yet fixed, Ojanperä said. How many handsets will have the service? Ojanperä: “It will be more than one, and more than two” (so, three?). Each refused to give detail on the business model. Ojanperä: “There will be money for us, and Thomas’ company and money to share with the creators.”
We were told Sony BMG was expected to sign up within days of the Universal announcement, but the pair have not been able to make the deal stick until now. Last week, we were told Nokia is paying Universal $33.50 per handset for the privilege, up to 2.5 million handsets. Hesse had first backed the unlimited-access model at Midem in January. EMI in March said it wanted to join Comes With Music, but Ojanperä did not update on those negotiations. Ojanperä ruled out Nokia becoming a record label itself.