Comes With Music Experiences A Difficult Takeoff

Music business news & strategy source Music Ally put a post up on their blog yesterday with some juicy details they obtained about total worldwide subscriber uptake of Nokia's vaunted Comes With Music service. Apparently there were only 107k activated user accounts, across the 9 territories in which the service has launched, as of July.

When Music Ally confronted Nokia with the unspectacular numbers a spokesperson for the Finnish handset maker bragged about their rapid multi-territory rollout plans, acknowledged the inherent difficulties associated with a business model paradigm shift (true that) and then said, with regard to these specific stats, that "per our longstanding policy we do not comment on industry speculation or rumors." I guess the numbers are accurate.

This appears to be yet another case (like Ovi) where Nokia is trying to roll-out a content service globally, before it's fully baked. I would suggest that they should have tested this model a little bit longer in the UK (and maybe in one developing market) to better understand consumers' propensities to adopt it, and the ability of retailers to sell it, before pushing it out to all of their territories. Unfortunately this plane has already taken flight... and perhaps that stalled engine under the left wing will restart itself, and if not, perhaps Nokia's mechanics can fix it in the air... right?

UK Nokias Don't 'Come With Music' Very Often...Perhaps It's A Blessing

The Register has a story today about how Nokia's "Comes With Music" bundle has been a dud so far with UK consumers...with only 23k takers since last October. The service, which allows consumers with certain handsets to download unlimited DRM-protected tracks over a 12 or 18 month period (depending on package) for use in perpetuity, has been a major (and much-hyped) component of Nokia's music content strategy. The story attributes lackluster interest to the fact the service initially rolled out with an older 2G 5310 handset (what were they thinking?), and to a retail channel that can't sell the proposition to the consumer. Things should improve as Nokia has now made the offer available on the much sexier N95 8GB..and hopefully soon on the XpressMusic 5800. That said, they may not want the service to get too successful, as they have to pay the music labels ~$1 per song (after some pre-negotiated threshold), which means that high volume users could quite easily transform this reverse razorblade model into an expensive handset manufacturer handset subsidy (i.e. Nokia would be paying consumers to buy their handsets and give them free music). If this scenario does play out they should probably re-brand the initiative "Comes With Madness".