Thursday, May 01, 2008

Comes With Music

The music business is being constantly redefined by access and free to play. It seems an age since we first wrote about the SprialFrog service in the Brave New World report and the service is now live in the US. Others have followed the model and the most significant of these is Nokia with its ‘comes with music’ service.

They have clearly separated the content from the format from the device. Their focus is to sell mobiles and maintain their share of this huge market. To do so they must offer services that others can’t but unlike the iPhone’s lock in to service carriers Nokia is agnostic and will play with them all.

Nokia, is the first mobile manufacturer to push heavily into content but others will follow. Last week they struck a deal with Sony BMG to offer their catalogue to that of Universal which they secured last December.

Importantly Nokia, have decided to differentiate themselves by allowing users to keep all the music they have downloaded during their contract.

Nokia sold 146 million music phones last year and if all of those had included the "Comes with Music" bundle, just an extra $20 per phone would make Nokia's service bigger than the total digital music market. The sales of their 5310 and the 5610 top music models alone, were more than 4 million during the first quarter of 2008.

Ironically, the record labels hope that Nokia and others start to challenge the dominance of Apple's iTunes but the question remains whether they are merely bouncing from one offer to another devoid of strategy or have a master plan to restore their ailing businesses.

Now we must start to rethink who is the natural service, platform and what business model will work for the digital content we call books.