Reuters reports today that Nokia Corp. (NYSE: NOK) has signed up Warner Music Group Corp. (NYSE: WMG) to its "Comes with Music" phone service and music store. Nokia is the world's top phone manufacturer and will be making a direct challenge to Apple Inc. (NASDAQ: AAPL)'s iTunes Store, according to numerous reports. The "Comes with Music" service is the first from a phone manufacturer to "push heavily into content" and "differs from other packages on the market as users can keep all the music they have downloaded" while in yearly contracts with Nokia.

WMG executives allowed the music company to join up with Nokia since the service "is the first global initiative to fundamentally align the interests of music companies with telecommunications companies." Nokia already secured the support of fellow music companies Universal Music Group and Sony BMG Music Entertainment in April, and "Comes with Music" launches later this year. Reuters speculates that the agreements with three of the top four music companies (EMI Group has not signed up yet) will "help Nokia attract smaller music companies and challenge the dominant pay-per-track sales model for digital music." Last year, download sales totaled $2.9 billion; if the 146 million Nokia phones had featured "Comes with Music", those sales would have surpassed the digital market.

Record labels have consistently looked for new methods to challenge Apple's grip on the music industry, and subscription models like "Comes with Music" may finally provide that challenge. Subscription models give the music industry more shares per download since users typically are not allowed to keep tracks downloaded during the subscription. "Comes with Music" is betting against that model since users will be allowed to keep music downloaded, and Nokia and the record companies are no doubt hoping that dynamic will keep those consumers renewing contracts with the service. Reportedly, the subscription for "Comes with Music" will only cost $20 per phone, which on a yearly basis would not be too expensive for unlimited downloads.

Reuters reported yesterday that privately held EMI Group plans to join Vivendi's Universal Music Group and offer songs in Nokia (NYSE: NOK) mobile devices as part of the new "Comes with Music" program. The report comes out of Nokia's home country, Finland, but since Universal's commitment bridges international divisions, it is likely the EMI connection will as well.

The "Comes with Music" program was first announced in December 2007, with Universal fully on board to offer unlimited access to millions of Digital Rights Management-free tracks for a year, and any tracks on the phones at the end of the year becoming the consumers'. Clearly, the program has a major upside in that the end of a subscription does not mean music tracks are going to disappear, something that always seems to be at the fore of subscription-based music plans. The tracks will also be available on those consumers' computers.

As nice as the plan is, the labels will not lose too much from allowing a subscription plan like that to take off. Nokia and label executives are banking on the size of catalogs to combat fears that it will hurt the music industry financially. In the press release for "Comes with Music", Nokia's Executive Vice President for Multimedia stated, "even if you listened to music 24 hours a day, seven days a week, you would still only scratch the surface of the music that we're making available."

With two major labels on board, the "Comes with Music" program is sure to be on the right track to succeed when it is launched later this year. The only worry that likely remains is whether any other digital store will initiate a better or similar plan to increase sales.