Nokia Breaks Ranks With Network Operators, Targets iPhone/iTunes

Individual tracks will cost 1 Euro, whereas albums start at 10 Euros. While a monthly subscription for streaming audio can be purchased for 10 Euros, the streaming is not available to phones, only to personal computers. According to the announcement, "users are allowed to pay by a variety of payment options, including credit cards, PayPal, and pre-paid vouchers."

Like Apple, Nokia plans DRM capabilities on its music system. Nokia has eschewed the use of the rapidly-adopted AAC format to instead deliver songs from the Nokia Music Store in the Windows Media Audio (WMA) format. It is unclear yet whether Nokia is using PlaysForSure or the newer Zune DRM scheme, but one this is certain: the songs downloaded from the Nokia Music Store won’t be able to play on an iPod or iPhone.

Also like Apple, Nokia doesn’t own the transport. But while Apple relies on a diversified public internet to deliver songs from the iTunes Store to the iTunes software, Nokia’s "walled garden" is reliant on network operators (such as Orange, Virgin, and Vodafone) to deliver the content from the Nokia Music Store to the handset. This led to several choice comments in the UK tech media press, including one from the wags at The Register.

"It brings Nokia into head-on competition with its biggest customers—and that's a place most businesses would prefer not be," wrote The Register’s Andrew Orlowski. "The last thing [network operators] want is a feisty supplier dictating the end user experience, and pocketing those hard-to-win data revenues. . . . Compared to Omnifone's Music Station—the carriers' great white hope—NMS offers a lot less, for a little more money, on far fewer handsets. . . . Music Station works on 70 per cent of the world's 2 billion handsets - rather than just four."

Interestingly, Nokia makes no mention in its press releases about the advent of a U.S.-based Nokia Music Store when it notes "the Nokia Music Store is opening across key European markets this fall with additional stores in Europe and Asia opening over the coming months." This is probably due to Nokia’s leverage over network operators in Europe, its home turf, a hesitation to try to compete against the iTunes juggernaut in the U.S., and a chance to go head-to-head with Apple in markets new to each company. (Or maybe Miss South Carolina’s recent comment about U.S. citizens lacking enough maps to successfully point out our country confused Nokia enough to shy away from the geography-challenged United States.)

At least one record label head is happy the Nokia Music Store is on the horizon. After playing coy with Apple in its recent renegotiation of its content on iTunes Store, Universal Music announced several initiatives to test the waters for other download options, including selling DRM-free content in locations other than the iTunes Store. The Nokia Music Store is yet another of those initiatives.

"It's obvious that innovation and imagination in the digital music download business are the keys to future growth," said Lucian Grainge, Chairman/CEO of Universal Music Group International. "It's good for music—and good for our artists—that consumers can easily find and buy the songs they want, when they want. That's why we welcome the Nokia Music Store."

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