In some respects, this is a continuation of my last entry about Qtrax. While the final position of Qtrax has yet to be established, it’s interesting to look at another high profile example that got plenty of coverage last year – Nokia’s Comes With Music package.
As you may or may not recall, Nokia announced that a new range of Nokia phones would come with the ability to listen to free music from the Universal catalogue. Well, according to a piece from Bloomberg reported by Engadget, all is not quite what it might have first seemed.
Telecoms operators have something called ARPU which they’re continually driving to maximise. It stands for Average Revenue Per User, and it refers to all those bolt-on services that you buy aside from airtime and texts. These days there’s obviously data, any number of subscription text and video “content” and so on. Music downloads have been a recent addition, although issues based around getting your music from one device to another begin to rear their head and have probably stymied sales somewhat. But music remains popular, and advance access to concert tickets is another key area with all the major operators doing things in the area.
But when manufacturers like Nokia (or Apple) introduce their own services, they can sometimes undercut the telecoms operators, and an impasse can be reached.
So this report is interesting for two reasons. First, it explains that the “free” music is not really free, and that Universal is getting a cut of the handset cost and potentially part of the monthly contract in a similar way to Apple taking a proportion of its users’ contracts. That cost might have to be built into the “music contract” that a user will have to sign. Secondly, they realise that without the assistance of the operators like Orange and Vodafone, they can’t really get the scheme off the ground.
It still seems to me that it’s unnecessarily confusing for an Orange subscriber with a Nokia “Comes With Music” phone has two different mechanisms for getting music – almost certainly incompatible with one another. But then PC users have a multiplicity of mechanisms for buying digital music from heavily DRMd iTunes music to mp3s from Emusic.
The market will have its say in the long term, but I would be very wary of anybody claiming that they’re offering free music. We’re at an experimental stage where new payment mechanisms need to be tried on for size. Jumping straight to free probably isn’t sustainable in the long term.