updated 10:40 am EDT, Wed April 30, 2008
Nokia Refutes CWM Bias
Nokia today rebuffed claims that its Comes With Music service will damage the company financially. The Finnish cellphone maker denies that the deal will force it to accept losses on music downloads and says instead that the service was created from the outset for profit rather than the unfair deal biased in favor of music labels, as suggested by earlier reports.
"I can assure you that we are looking out for everyone's interests in creating these new business models, including our own," says Nokia music head Liz Schimel.
Initial reports have circulated that labels would only compensate Nokia for the first $35 in music paid by customers buying CWM phones, requiring the company to pay for any further downloads. Nokia explains that its phone share is large enough to easily satisfy labels without incurring a loss. If one percent of Nokia phones are sold as CWM devices, the revenue is effectively the same for service partners Sony BMG and Universal.
The preference for a subscription-based but largely permanent music service contrasts sharply with Apple's iTunes Wi-Fi Music Store, which serves as one of Nokia's primary challengers in the mobile music space. Apple has so far insisted on maintaining the a-la-carte model for its downloads and has maintained identical pricing since the opening of its conventional online store in 2003 by limiting downloads to short range Wi-Fi rather than direct cellular downloads, which often carry an extra bandwidth cost on carriers.