Nokia Stepping Down B2B Music Stores; Hits Tiscali, MSN, Virgin

Nokia (NYSE: NOK) is ending some of its OD2 white-label digital music retail activities in the UK from April 23, as it focuses on its consumer-facing Nokia Music Store and Comes With Music. The company is closing B2B contracts it got when it acquired the digital distributor in 2006, taking out the web-based download stores it powers for Tiscali UK, MSN UK and Virgin Media (NSDQ: VMED) in the process.

ISPs Tiscali and Virgin wrote to customers to inform them of the shutdowns, Tiscali told paidContent:UK: “OD2 has regrettably decided to withdraw the Tiscali Music Download service … Tiscali is actively looking for a high quality music service to replace it.” MSN, which still offers a la carte PC downloads in Europe despite pulling them from the US last year, will now offer music over “a Microsoft-owned platform”, NMA reports. Virgin was already known to be planning its own, subscription music offering as a replacement. A Nokia spokesperson told us: “We are not closing OD2. What we’re doing is ramping down the MSN Music stores in Europe as per Microsoft’s request as they are launching new stores in the region.”

OD2’s service hasn’t kept apace. Still Internet Explorer-only, it merely gives white-label clients a URL to which to point consumers and is being overtaken by platforms like 7Digital, with its API for white-label customers, and consumer outlets like Amazon (NSDQ: AMZN) MP3. Nokia has invested so much in marketing Comes With Music, it’s only natural the focus lays there. Co-founded by Peter Gabriel in 1999, OD2 was bought by Loudeye in 2004 for $40 million, before Nokia bought Loudeye itself in 2006 for $60 million.