Wednesday, December 05, 2007

Nokia Want the Music Consumer

Nokia plans to offer unlimited music downloads. The world's biggest mobile manufacturer has announced a deal with Universal that will effectively give customers with certain phones unlimited access to millions of tracks for a year and allow them to keep the music afterwards. The other major labels are in discussions to follow Universal.

So will this latest lurch by the record companies challenge the previous pay-per-track sales model? What will be the impact in the relationships between the carriers and phone manufacturers? Who will own the consumer, Nokia, the carrier, the record label, the advertisers or the artist?

So it ends up free illegal downloads and sharing versus relatively free legal downloads. The consumer certainly is the winner here, but what about the artist, the writerand the cost of development?

Research firm Understanding & Solutions estimates that mobile music is around 13% of global music retail value and that the mobile music market should grow to $11 billion by 2011.

Nokia's new venture is due to start in the second half of 2008 and no doubt the game will have change again by then but what is clear is that Nokia have taken the music market and flipped it upside down. They are positioning themselves for a fight with Apple and the mobile carriers and record companies are mere pawns in this may muddy the waters but to-date, unlike the Nokia-Universal offer, customers cannot burn their music or transfer it onto a PC, meaning it is lost after the contract expires. They can only share music with other MusicStation customers while their contracts are current.