NOK finally finds a keeper…
Posted on December 10, 2007
The deal that Universal has struck for consumers to get music on their Nokia cellphones for 12 months is a winner. Felix Salmon over at Portfolio.com published some commentary on the deal a few days ago.
Focusing on "free" misses the point. Consumers are going to be paying a low subscription fee to access the music on their cell phones. They won’t be able to move into iTunes or burn a CD but then the point is to provide them with the content on the phone itself. (These other options will be available if the customer decides to actually purchase the music.)
The iPod and iTunes are great but they are also limiting in that one needs to carry the device and agree to the iTunes way of doing things. It’s a worthwhile trade-off for many. However there is another huge (probably far larger) segment of the market that this Universal/NOK deal can begin to tap into.
Entertainment is a personal matter but for many it involves more listening than buying, arranging, and playing. This is where services like XM Radio have found success. XM Radio on a cell phone is probably another great idea. But by paying a small fee to have a music library on the mobile phone is something that can probably net tens of millions of customers quickly *if* it is well-designed and implemented.
In Europe the phone is the key personal device. More than 1/2 of the folks one sees on the train are playing games, doing SMS and listening to music on their mobile phone. (Not nearly as much email as in the States.. in Europe train time for most is personal time.)
The Universal/NOK deal may or may not be a game-changer depending on how well they execute but the structure of the value proposition for a big swath of the potential user base looks to be on target.
– Kris Tuttle
Tags: NOK, AAPL, Music, Mobile Phones
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