12/10/2008 1:09:00 PM
Will Nokia's Comes With Music boost mobile music?
Apple is undoubtedly king of the digital music downloads, having sold over 100 million iPods. Now Nokia is intent on dethroning the US manufacturer with its Comes With Music offering. Nokia is putting a great deal of marketing effort and advertising budget into promoting Comes With Music in the run-up to Christmas. But what are the alternatives to Nokia’s music service? Especially since it has an exclusive deal with Carphone Warehouse for the Nokia 5310. Is it to push rival music services such as MusicStation via special Vodafone tariffs? And will the likes of Comes With Music help boost sales of accessories like headphones? What are the viable alternatives available to independent resellers?
The general consensus is that Nokia’s Comes With Music has not become the overnight success the manufacturer was aiming for. Paolo Pescatore, director with analysts, CCS Insight, says: ‘The early indications are that it isn’t doing as well as Nokia hoped it would.
‘The service has only been around for just one month and already Carphone has temporarily dropped the price of its 5310 Comes With Music handset down to £99.99 in its Oxford Street stores.’
The official price of the Nokia 5310 is £129.99 and, with high street retailers like Marks & Spencer dropping its prices on average by 20% in an effort to boost Christmas sales, this £30 price drop is not particularly shocking.
However, one Nokia spokesperson tells Mobile: ‘In terms of the success to date, we are only one month into the service after launching in the UK market, and the initial feedback from consumers and reviewers has been very positive.
‘We will continue to track the progress of our sales through the holiday season and we will make an initial analysis at the end of Q4 2008.
‘New Comes With Music stores are scheduled to open in early Q1 2009, where the service will launch with the new Nokia 5800 XpressMusic touch-screen device. We are looking forward to bringing this compelling new proposition to market.’
Nokia says its Comes With Music service will be supported by a multimillion-pound campaign, which started in November with ads shown during the The X Factor. These were supported by Carphone bumper ads. The Nokia ads do not appear to have had the desired effect on viewers.
Pescatore says: ‘My gut feeling is that the public just don’t get the proposition. It sounds too good to be true. Nobody has really seen this type of bundle before, so they don’t understand it yet.’
Nokia claims its Comes With Music promotion will run until Christmas and will also focus on building Carphone and 3’s in-store traffic ‘through high-profile ambient and store events in key high streets across the UK’. One of those events will be a street performance Nokia has dubbed the Human Jukebox.
Will Harris, marketing director at Nokia, says: ‘The Nokia Human Jukebox is a great way for people to hear a mix of their favourite songs both old and new.’
While Carphone has an exclusive on the 5310, which is £25 per month on contract, 3 has an exclusive on the Nokia N95 8GB Comes With Music edition, which is available on a £35-per-month contract. Nokia sells the N95 8GB Sim-free for £395. A 3 spokesman says: ‘For 3, Comes With Music sits alongside our own 3 MusicStore offer, which is available on all handsets.’
So, Comes With Music is restricted to Nokia whereas 3 offers a wide range of handsets to its subscribers including the recently launched INQ1 device, which has full music capability.
There is a big difference between 3’s Comes With Music offering on the N95 and the Apple iPhone’s relationship with the iTunes Music Store. It is not possible to access iTunes music directly via an O2 3G connection, although it is possible via Wi-Fi. This over the air (OTA) direct to handset download capability is important because it encourages music fans to sign up for a suitable data plan. This is an area where MusicStation (offered over Vodafone’s network) scores heavily. Vodafone offers data tariffs whereas MusicStation downloads are ‘free’.
One additional advantage of MusicStation, which is provided by Omnifone, is its download speeds. The industry standard file format, MP3, is not best suited to downloading over mobile networks. Luckily, MusicStation can identify the type of handset that is accessing its service and provides the most suitable format.
A spokesperson for Omnifone, says: ‘Our preferred file format is eAAC+. Sony Ericsson has tested it and found that tracks can be downloaded in just 10 seconds.’ This speed requires the network to offer HSDPA (high-speed 3G); however, even over GPRS, MusicStation is capable of downloading a music track in just two minutes. An MP3 download over GPRS would be significantly longer.
There is also a dark horse waiting to compete in this market – Sony Ericsson has a service called PlayNow Plus. So far this service has only been launched in Sweden in conjunction with local operator, Telenor. Once again, Omnifone is behind PlayNow Plus just like MusicStation. Most observers think Sony Ericsson could announce a tie-up with a UK operator in mid-2009, and PlayNow Plus was launched with a special edition W902 Walkman handset with the service built-in.
Additionally, up to 1,000 ‘recent popular tracks’ were being pre-loaded onto each PlayNow Plus handset. Although one negative with the service is subscribers that download tracks direct to their phones and pay for them (much like iTunes) cannot keep them if they change handsets.
Another one to watch is Amazon. It has just launched its MP3 music service in the UK just in time for Christmas. The service is attractive because its cheapest songs are 59p each, which undercuts Apple’s iTunes Music Store by 20p. Other song price points are 69p, 79p and 89p, and top-selling albums cost £3. The crucial point here is that all of Amazon’s tracks are DRM-free. That means that there is no copy protection (digital rights management), that would prevent users from copying the tracks anywhere they like, including to mobile phones.
It will be interesting to see how T-Mobile reacts to Amazon’s UK launch, because in the US its G1 Google phone is shipped with support for the Amazon MP3 store built in. Existing UK G1 owners should not find it difficult to go on the Amazon online site themselves. So the G1 handset is a viable alternative to Comes With Music.
Independent mobile phone retailers could also be interested in offering the Datz Music Lounge. Michael Richardson, managing director of the recently collapsed distributor Comment Retail Services, is also behind Datz. To get into retail stores, the company has created a limited-edition Datz Music Lounge gift box. This contains a one-year subscription for £99.99 and provides access to millions of DRM-free (MP3) music tracks.
Subscribers can download the tracks to any device, which boasts an MP3 player. A Datz spokesman says MP3-enabled handset owners are a major target for this new service.
At present Datz has struck deals with Sainsbury’s and WHSmith but no mobile specialist stores. Datz also did not rule out deals with handset vendors that do not have their own music sites.
However, Datz users have to download the tracks directly to a PC and then transfer them to a handset via a USB cable or Bluetooth. The biggest advantage to Datz is that subscribers never lose their tracks – unlike MusicStation, PlayNow or Comes With Music. They can happily reload their music when they upgrade their handset.
To fully enjoy the music on a Nokia handset, it is best to use a wired stereo headset like the recently introduced Nokia WH-500, as Bluetooth headsets are not entirely suitable. Th