Nokia to lead new revolution in music downloading business

Nokia Corporation (NYSE: NOK) will soon begin to offer music from artists at Sony BMG (a 50/50 joint venture between Sony Corporation (NYSE: SNE) and privately-held Bertelsmann AG) on the company's music phones, reports Reuters. The addition of the second largest music company to top label Universal Music Group gives listeners and phone buyers access to tracks and the ability to keep those tracks even if they do not renew the program (or, if Nokia and the labels do not renew the agreements). "Comes with Music" will launch later this year on a number of different Nokia devices in select markets, and the phone company expects all labels to come on board before it is unveiled properly.

Reuters also commented that "such unlimited download models could offer a shot in the arm to the music industry, which is struggling to find ways to make up for falling CD sales." In a market where Apple Inc. (NASDAQ: AAPL)'s iTunes Store is the top online retailer for music and other media, a free program with download capabilities would not be a very welcome addition. With the developments in the industry over the past year or so, a move to complete digital access for listeners is quite revolutionary and a very different model for the labels to be embracing. The only shame to it all is that it took as long as it did for the labels to realize how they could readjust marketing and sales platforms in order that listeners, artists and the labels would all profit.

There are conflicting reports out there as well that Nokia was forced to give $35 million to Universal in order for the label to join up with the "Comes with Music" program, but no such details have emerged about the deal with Sony BMG. Regardless, if these types of reports are true, I wouldn't be so surprised if the music industry expected, or demanded, large sums of cash in order to make tracks available in the type of program.

Nokia is certainly out to get music to consumers, but one has to wonder how much these phones will cost. If they are in the range of mp3 players like iPods or the iPhone then the price may be attacked just as readily as the newest generation of those models was. It would not be surprising, regardless of the phone price, if the program adds a small fee or requires some kind of plan straight through Nokia on top of existing phone plans. This is all speculation though, but the good news remains the extent to which the music industry is going to get its product to the consumers at hopefully lower costs and better availability.