Looks like the music industry’s found a wily new way to make money through “unlimited music bundling”: gouge the bundler! It’s been reported that Nokia will have to pay record companies a wholesale rate for every mp3 a “Comes With Music” customer downloads after the first thirty-five. Thirty-five! And if Nokia still plans on offering the first year of the unlimited download service plan for free, it sounds like they’ll have a hard time passing those fees on to you. DRM or no DRM, that’s gotta hurt.
The world’s biggest label, Universal Music, joined the “Comes With Music” initiative at launch last December, and Sony BMG joined last week. The Register has learned that Nokia must pay the wholesale per-unit rate for downloads over a certain ceiling – believed to be 35 songs per user.
Two key executives have paid the price, The Register understands. Ed Averdieck, formerly Managing Director of Nokia Music (and former MD of OD2, which Nokia acquired in 2006) left the company earlier this year. The other joint head of Nokia Music at the time CwM was announced, former shooting star Tommi Mustonen, former head of Nokia Multimedia, has been given a “punishment that fits the crime”, insiders say: he has to negotiate the label deals personally.
“It will cost Nokia a fortune – it’s a reckless business move,” an insider and supporter of the concept told us.
It’s possible that some customers won’t bother grabbing more than thirty-five free mp3s. Septegenarians, for instance. I’m not surprised when a young band with Billboard dreams forgets to read the fine print, but phone companies?
Nokia decks execs as it counts cost of free music [The Register]