Nokia's "free" Comes with Music... and DRM and hidden fees

If mama taught us one thing about free offers, it's read the fine print. Unfortunately, it was missing from Nokia's unusually tight-lipped "Comes with Music" announcement yesterday. Fortunately, Ars Technica unearthed the dirty details for us. Nokia's service is actually a first to fit under Universal's Total Music plan whereby carriers or device manufacturers tithe Universal a fee of about $5 per month for each device sold. While it appears free to end users, the cost is baked into the handset and/or data plans from your friendly neighborhood carriers. Oh, and it's slathered in DRM -- PlaysForSure DRM in fact making your tracks incompatible with both Zunes and iPods. Burning a CD will require an "upgrade purchase" for the tracks you received for free. Look, we don't mind paying for tracks, in fact, we expect to. But all this underhanded sneakiness is just silly. This is not the future (at least we hope not).

[rumblerjon @ Dec 5th 2007 1:49AM]

I vow to remove that DRM!

[Doc @ Dec 5th 2007 4:38PM]

Rumbler, no need to work on that, there's plenty of software out there that can handle that already.

[skhawaja @ Dec 5th 2007 1:50AM]

if it sounds too good to be true

it probably is :[

[amby @ Dec 5th 2007 11:02AM]

I could be brainwashed... (seriously), but I still see it as a good deal. Unlimited (well, 2 million?) songs to my PC and phone (also via WiFi/PC sideload, no carrier data charges).

I've read these details yesterday already, extracted from the Nokia webcast: http://www.allaboutsymbian.com/news/item/6357_Comes_with_Music-devices_with_.php

I guess it did make better news for Engadget this way. (Fall in love big time, then fall out big time. Two sensational entries instead of one normal.)

[thef1re @ Dec 5th 2007 2:06AM]

What were you expecting?
I mean not even Apple is that nice. (e.g pay for ring tones from songs you already bought). I mean come on! Its all consumerism.

[Jon @ Dec 5th 2007 2:18AM]

$5 per month and DRM isn't bad when you think about it. It's cheaper than a bloody McDonalds meal. And how much can $5 get you at Itunes? A couple of tracks or two music videos.

[paul34 @ Dec 5th 2007 2:19AM]

At least I can eat my McDonalds meal wherever I please, and not only in approved McDonalds locations an approved number of times. In addition, I may take it outside the restaurant and share it with my friends.

As we can plainly see, $5 McDonalds meal >> DRMed music.

[Jon @ Dec 5th 2007 2:25AM]

Don't get me wrong. I hate DRM. I never bought a single music track from any online stores ever. Only CDs for me mate. But I think $5 for music subscription is better than most. You guys in America pay $17 for satellite radio and you can't even use whatever device you have.

This isn't the future, but as far as subscription music goes it is moving into the right direction.

[L @ Dec 5th 2007 2:59AM]

@Jon

That's how I see it too...

Would this service have been better without the DRM - hell yeah! Is it bad, because of the DRM - hell, no!

I mostly hate DRM for per-track based music stores - you pay for a specific track, and can't use it on every device like you want? That's a joke.
But for a subscription service (and especially for a subscription service that's somewhat free), it's to be expected and tolerable imho.

And why is it so crucial that I can playback the tracks coming from this service on an iPod or a Zune? After all, I bought a music-centric device in the first place to even get that subscription

Somehow I bet Engadget and Gizmodo would go gaga if Apple offered a "free", DRM-ed iTunes subscription model with every iPhone.

[Andrew @ Dec 5th 2007 2:18AM]

This is exactly why fair4use was made. I am not the type who illegally downloads a ton of music but if I get something that is full of DRM crap (and in WMA format) then screw them. I'll use Fair4Use and what do ya know, all of a sudden NO DRM! A**holes, engadget is right. This is NOT the future. People will pay for music if it is a fair and honest fee, none of this secret BS.

[apw76006 @ Dec 5th 2007 4:41AM]

Wow! That sounds like an awesome deal and by "awesome deal", I do mean I would rather sell my soul to Michael Eisner or Dick Cheney. Do the record labels even bother to do any consumer focus group testing before they plop ideas into the toilet and pick out the one that survives the flush? How many people actually want to listen to music that is married to their phone anyway? I can only imagine Sony's version of this.

[contreras @ Dec 5th 2007 7:53AM]

"...While it appears free to end users, the cost is baked into the handset and/or data plans from your friendly neighborhood carriers. Oh, and it's slathered in DRM -- PlaysForSure DRM in fact making your tracks incompatible with both Zunes and iPods. ... "

There is no 5USD per month fee. read carefully. You buy the phone and the 1 year fee (60USD?)is supposed to be embedded in the price of the phone. What does this mean? Phone_price + 60USD??? of course not. Nokia is investing in this first year in order to get into the content market. It is "comes with music" not "comes with music, if you agree to pay and additional fee..." Guys, please READ.

Do you really think Nokia is "adding" 60USD to all his portfolio? Nokia has 40% market share in mobile phones worldwide, and sells more than ONE MILLION phones a day... that means that between today and tomorrow, they oversold Apple's iPhone in terms of quantity... Of course it is DRM, and has to be, otherwise, there is no business case, they need to be present as an end-to-end service, and may move to non-DRM in the future, but of course payed. Otherwise what is the point?

[Jakob H @ Dec 5th 2007 8:29AM]

That's right, and of course you have to pay for the data, unless Nokia makes deals with carriers all around the world.

At least data is very cheap in my country - about $0,28/MB (Denmark)

[Randomness @ Dec 5th 2007 8:49AM]

Are you implying that Nokia is just taking the fee as a loss? I don't think so. The cost is included in the price you are paying for the handset. There is no choice whether to pay or not pay the fee, all the comes with music phones already have the price of the service included in the price of the handset.

[contreras @ Dec 5th 2007 9:20AM]

@Randomness

It is a deal between Nokia and Universal. We cannot know what is the profit sharing, if at all. In any case, as Universal is getting tons of publicity with this deal, and the fact that millions will browse through its content in the fist year, I'd say that it's a pretty good business for both, in terms of market positioning.

[L @ Dec 5th 2007 10:22AM]

Nokia said that EVERY Nseries phone will have WiFi from here on. And even if not, you can also simply download your tunes on your PC and sync them to the phone...

The mobile operators don't gain anything from this unless you want to download stuff via their network...

[Jah @ Dec 5th 2007 8:28AM]

Hopefully Nokia will have a 8GB phone with a Micro SD card facility - which means I will be able to download 16GB of music for free! Given that I only listen to music on my E90 at the moment, this deal from Nokia is just fantastic.

Probably also trying to make the iPhone + iTunes look expensive - which it is!

[Scott @ Dec 5th 2007 2:03PM]

I'm listening to mp3s on my iPhone right now that didn't come from iTunes. Imagine that!

[sjdurfey @ Dec 5th 2007 12:59PM]

i think this new pricing model for music corporations is clearly indicative of the fact that the effect piracy has on the industry is very over-rated. say they sell 1mil phones, the music corporation receives $5mil, no matter how many songs are downloaded. say the average phone owner downloads 50 songs over the course of the year (probably low), thats 50 mil songs downloaded. now if the same 50mil songs are downloaded via iTunes, the music corporations would make $35mil, assuming they make $.70 per track sold. to break even at $5mil in tracks sold through iTunes, they would have to make $.10 per track, which is undoubtedly low. so for every 50mil songs downloaded from this service, rather than through iTunes or Amazon, they lose $30mil, how much sense does that make? if they're so willing to give up such profits from these downloads, how much can piracy really be hurting them?

[contreras @ Dec 5th 2007 3:13PM]

@sjdurfey

...now imagine millions of kids downloading millions of tunes everyday for free, how much is that? you have no idea, right?

[sjdurfey @ Dec 5th 2007 3:42PM]

@contreras: my point is that if the record companies are so willing to allow downloaded music which could easily run up into the the hundreds of millions every year, and are willing to settle for $5mil in sub costs for those 1mil phones and hundreds of millions of subsequent downloads, can piracy really be hurting them that bad?

[contreras @ Dec 6th 2007 1:48AM]

@sjdurfey

I understand your point. The fact is that you need to consider the millions of pirate copies of tunes availabel in the web.

Having this in mind, the companies are not giving away earnings giving this kind of "offers" (IMO), but investing in convincing people to follow the right way. Which is to pay for someone else's property in high quality (or at least better than mp3). IF they don't try to do something, they will just dissapear.

[Constable Odo @ Dec 5th 2007 2:53PM]

Nokia + Nokia Music Store = shyte.
iPhone + iTunes Media Store = the shizzle.

Too bad for those that don't know shyte from the shizzle.

Anyway, all this FREE stuff is a nice way for Nokia to say you have to pay for music through your nose. Seems more like twisted generosity for fools.

Some of you should try running a business model and see how far it gets you by giving your product away for free and expecting nothing in return.

[contreras @ Dec 5th 2007 3:09PM]

@Constable Odo

Nokia must have awful business models... Their share only grew 100% in the last year, and they just hit the biggest market share ever in mobile phones worldwide... too bad, ah?

... I think you should try to learn how to read business reviews, it's as much fun as business modeling!

[sjdurfey @ Dec 5th 2007 3:45PM]

@constable

i think it may be foolish to assume this music is free for us. that $5 per month fee is going to be prorated and tacked onto the final price of the phone. it only gives the illusion its free.

[Doc @ Dec 5th 2007 4:31PM]

Pathetic Flame. You must like paying more for less.

[ugg.tryptophan @ Dec 5th 2007 8:56PM]

Nokia and Apple selling DRM music=both colossal FAIL

[AndrewNeo @ Dec 17th 2007 8:23PM]

iPhone + iTunes Media Store = shyte.
Moving from (removable) DRM that I can play on just about any phone or MP3 player -other- than a Zune or iPod, to something that only works on Apple's Own? How 'bout no?

[adrian @ Dec 5th 2007 7:46PM]

Nokia need to take a good look at the competition. That DRM nonsense their supporting won't last.

[cyuzna @ Dec 5th 2007 9:05PM]

I am completely mystified by the attitudes of 95% of the people providing comments on this thread.

Perhaps it's because I'm not a huge music enthusiast, but I've never understood why so many people view pop music as some kind of essential public good to which they have a right to obtain on terms they deem acceptable and if they don't find the terms acceptable then they theft is justified.

I understand stealing music. Personally, I haven't bought music in years and have torrented dozens of albums during that time. But that doesn't mean that it's right for me to do it.

[Brazza @ Dec 6th 2007 4:44AM]

Thanks to the editor for this important clarification. However ... one can get music for free on one's phone. Please see www.wauw.fm/en/music and try it! I look forward to reading whether I'm the only one who thinks this is awesome.

[Morty @ Dec 6th 2007 9:23AM]

I find it funny how no one has even mentioned that you only have access to Universal tracks (at the moment) with this deal. I don’t know about anyone else but I had a look at the artists on Universal, I’d overestimate that I’d listen to around 5% of them! Would that be really good value? I think not!

There seems to be this bizarre obsession with being able to download millions of tunes? Come on how many are you going to listen to and how many of the artists on Universal’s books would you actually want to? Just because you can download them all doesn’t mean you’re going to.

[Malina Kirn @ Dec 6th 2007 4:57PM]

IMHO, this is another attempt to bring music to the digital age under complete RIAA control. Once the music industry feels that consumers have latched onto digital music, they will ratchet the price. This can be seen in the repeated attempts by the RIAA to increase the price of downloads every time they show major growth (iTunes made RIAA positively drool). They also attempted to increase the cost to online radio stations once 1.FM obtained the largest market share. RIAA is biding its time, waiting for the music industry to switch to digital, before it increases its currently reasonable digital prices to something unreasonable.

RIAA has squashed the competition from the little guys for years and is attempting to do the same with digital music. DRM & exclusive contracts will allow them to keep their musical monopoly. Some economic scholars think this will come to an end - just as the French button industry collapsed after attempting absolute control over the manufacturing of buttons. The consumer will determine the future of digital music. Do you want to purchase a device that will allow only one provider of music to dictate every aspect of your use of that music?