"Comes With Music" Plan Expected to Cost Nokia a Bundle
The latest round of rumors regarding the goings-on behind the scenes of Nokia's lofty Comes with Music paint a bleak picture for profitability -- but even scarier, they suggest that the company could be simply blown out if the initiative takes off. The Comes With Music plans to offer a year's worth of free music tracks to anyone who buys certain Nokia phones.The problem stems from the claim that Nokia's deals with labels represent a huge gamble: The deals assume that buyers of Comes with Music-compatible phones won't download more than a certain number of songs, believed to be 35. Above that, Nokia is no longer covered by a flat fee and has to pay the wholesale per-song rate for each downloaded song above 35 for each consumer.
Clearly, either the rumor's wrong or Nokia seems to be betting against its own success here -- but the recent departure of a key exec involved with Comes with Music lends some credence to the latter. Maybe we don't speak for everyone here, but if we're paying a premium on our phone to earn a full year of all-you-can-eat tracks, you'd best believe we're taking full advantage. [Source: The Register via mocoNews]
Filed under: Cell Phones
