Nokia defies reports of slow progress in music

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Mobile Industry & Technology Journalist - freelance

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Nokia defies reports of slow progress in music

By CAROLINE GABRIEL

Published: 19 January, 2009

READ MORE: Nokia

The mobile music market is one of the strongest sources of growth during the bad times, but the value chain remains poorly defined and many players are still fighting for position. Operators, content owners, device makers and cross-platform web stores all want to take the dominant position, and Nokia says it plans "a very big investment" in 2009 to press its claim.

In a market where live events often generate more margins and revenues than record sales, the chain is also extending into concerts. O2 has created a major business around sponsorship and ownership of live venues, such as London's former Millennium Dome, and Brixton Academy, using incentives such as priority booking to attract subscribers to its network. Now retailer HMV is following suit, pushing into live events by acquiring branding rights to famous concert venues, and it says it will also step up its mobile activities, adopting some of the cross-marketing techniques of O2.

But the big mobile outlets for music publishers are the online stores, whether run by vendors, like iTunes or Nokia Comes With Music, or operators. Apple's offering remains the one to beat, and Nokia plans to strike decisive blows during 2009, despite a patchy start. There are mixed reports about its impact so far in the UK , where it launched its unlimited download service last year, but undeterred, it will extend Comes With Music to Australia and Singapore in February and March respectively, and to many other European countries, and possibly the US, later in the year.

In the US and some emerging markets, web services like CWM will be designed to harness the open access trend and appeal directly to consumers, to compensate for limited presence of Nokia devices among operators. In its heartlands, such as Europe or India, the music offering is part of a broader strategy to boost margins and reduce dependence on carriers, by morphing into a web services provider.

Tero Ojanpera, head of entertainment and communities at Nokia, said at a digital music event in France last year that the experience in the UK had been good, despite reports to the contrary in the British press. He said the company had recently secured a breakthrough on a "pan-European publishing deal" and that it would now be looking at the US and Latin America for 2009 launch - "that's the plan". He also said Nokia was considering providing some content in exchange for music-related advertising. "2009 will be a very big investment from our part," he added.

In the UK, retailer Carphone Warehouse has slashed prices on the main CWM device, the 5310, sparking speculation that the service is not grabbing the public's imagination, especially as it will soon face even greater competition from DRM-free iTunes and the cross-platform offering from Omifone. The 5310's price tag has been reduced by more than one-third, from £127 ($186) to £82 ($120), even though it has only been on sale for one quarter.

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