18 April 2008

Nokia Paying Universal Music $35 Per User
For Comes With Music?

The Finnish company unveiled in December the "Comes With Music'' program, which will allow customers to buy a phone with a year of unlimited access to millions of tracks included in the purchase price.

Now we finally got some more information, actually unconfirmed rumors as to how much Nokia is paying Universal Music Group for its music to be a part of Nokia’s "Comes With Music" service, from THR: "A well-informed mobile industry executive who wishes to remain anonymous told me on the hush that handset giant Nokia is paying record label Universal Music Group $35 for every phone that Nokia loads with access to Universal’s music library. Neither Nokia nor Universal would confirm the deal."

Does the figure sound about right? If the deal involved BMG Music Entertainment and maybe Warner Music Group, and if Nokia had access to music from those labels it would certainly say so.

The article points out that if Nokia puts the service on one percent of its handsets (and assuming it sells 500 million handsets next year) it would be $175 million in UMG’s pocket.

Staci adds: I can confirm from a source familiar with the situation that Nokia is guaranteeing UMG roughly $33.50 each up to 2.5 million handsets and then the price drops for a volume discount. The deal, which was cut late last year, includes an advance but is not all-you-can-eat the way you and I right understand it; rather it’s a limited but relatively high number songs. This is all based on a download model, not subscription.