Nokia announced Comes with Music that will provide for free music on Nokia’s music phones for up to one year. The company said that it has agreed with the Universal Music Group to offer free 12-month access to Universal artists’ music for buyers of Nokia’s music phones.

Once the year is complete, customers can keep all their music without having to worry about it disappearing when their subscription is over.

“We set out to create the music experience that people are telling us they are looking for - all the music they want in the form of unlimited downloads to their mobile device and PC,” said Anssi Vanjoki, Executive Vice President and General Manager, Multimedia, Nokia. “Even if you listened to music 24 hours a day, seven days a week, you would still only scratch the surface of the music that we’re making available. Comes with Music fulfils our dream to give consumers all the music they want, wherever they want it, while rewarding the artists who create it.”

The company is eyeing similar deals with other labels before the offer starts in the second half of 2008.

“We are in talks with all major labels. The response from labels has been very, very positive,” said Nokia spokesman Damian Stathonikos.

To my knowledge, there has been no announcement of cost or what limitations there will be on how much music you can hold on to.

This deal sounds like Total Music but rebranded and announced by Nokia. Under Total Music, Universal Music was working to allow people to use unlimited music bundled with devices. Speculation at the time was that the cost would be $90 added on to the device.

While Total Music was met with skepticism, Comes with Music seems like it’s getting a warmer reception. Maybe the outcry will come when we know how much it will cost.

Technorati Tags: Comes with Music, Music, Nokia, Universal, Total Music

Business Week is reporting that Universal chief Doug Morris is enlisting other big music players for a service to challenge iTunes and the iPod.

The world’s most powerful music executive aims to join forces with other record companies to launch an industry-owned subscription service. BusinessWeek has learned that Morris has already enlisted Sony BMG Music Entertainment as a potential partner and is talking to Warner Music Group. Together the three would control about 75% of the music sold in the U.S. Besides competing head-on with Apple Inc.’s (AAPL ) music store, Morris and his allies hope to move digital music beyond the iPod-iTunes universe by nurturing the likes of Microsoft’s Zune media player and Sony’s PlayStation and by working with the wireless carriers. The service, which is one of several initiatives the music majors are considering to help reverse sliding sales, will be called Total Music.

While I like the idea of a service that could compete effectively with iTunes and create a more compelling solution for the other device makers, it’s hard for me to see how they will get past the DOJ antitrust issues relating to companies who control 75% of the market joining together to offer a bundled product.

Even more problematic are the issues relating to the economics of the deal.

The big question is whether the makers of music players and phones can charge enough to cover the cost of baking in the subscription. Under one scenario industry insiders figure the cost per player would amount to about $90. They arrived at that number by assuming people hang on to a music player or phone for 18 months before upgrading. Eighteen times a $5 subscription fee equals $90.

Even if they can get past the DOJ anti-trust issues relating to Total Music, it does not seem to me that the economics of a bundled $90 subscription per player would work for either the device or recording industry. Adding $90 to the price of a player would surely depress player sales and probably still not be enough to cover the royalties required for a service that will let you play anything any time.

Is this idea destined for a pileup somewhere along the digital media highway?

Via Techmeme

Technorati Tags: Universal, UMG, TotalMusic, Total Music, iPod, iTunes