updated 06:35 pm EDT, Mon April 28, 2008
Comes With Music burden
Nokia's "Comes With Music" program, offering those who purchase Nokia phones nearly unlimited free access to a large music database, could cost the company more than it would make. The Register writes that Nokia would be responsible for footing the bill for downloads that exceed the estimated limit of 35 songs per user, charged wholesale per unit. The move reportedly pressured Ed Averdieck, former Managing Director of Nokia Music, to leave his position.
In addition, former head of Nokia Multimedia Tommi Mustonen, was put into a position where he must deal with label negotiations personally. Nokia is currently in the process of working out deals with EMI and Warner Music, as well as several independent labels.
"Comes With Music" is a controversial music purchase plan wherein the subscription cost for the near-unlimited downloads is rolled into the purchase price for phones that are part of program. Nokia hopes this unique approach will help it achieve market dominance ahead of Apple, which announced that iTunes recently passed Walmart as the largest US retailer in legal digital music downloads.