Why Verizon's not ready for unlimited mobile music

Liz Schimel, vice president of music at Nokia, stressed that both consumer and carrier reception has thus far been overwhelmingly positive. She described the rollout as having been collaborative with the key stakeholders – music labels, consumers and the wireless operators themselves. Unannounced carrier partners have been secured in Australia and Singapore, where it will roll out next, but this warm reception hasn’t just been in these markets. Schimel said carriers have also been encouraging in the U.S. where Nokia traditionally hasn’t had much luck with its line of smartphones. Without releasing any names, Schimel said Nokia has all the major operators in the territories they are entering participating with the service.

“We’re bringing them a very differentiated proposition,” Schimel said. “Many operators see it as a very collaborative effort and also recognize that, over the long-term, the value proposition in music is shifting and we’re bringing something very unique and in tune with where the consumer is going. There are some operators that have different offerings they’re focused on, but we are generally getting good response.”

Nokia has cracked the code on being simple and unique for its typically younger or family-centric consumers, but also potentially complicated for carriers. The handset manufacturer is more than willing to work with carriers, even crafting new service plans based on the carrier’s needs, Schimel said. And, with the mobile device quickly rivaling the MP3 player for consumers’ music device of choice, the service may even give carriers cause to rethink their business models. In today’s mobile music market, Apple’s iTunes a la carte purchasing strategy has been successful, but subscriptions remain challenged or often come with catches, as Schimel noted.

“A couple of key insights that are very differentiating for us are number one, consumers love the idea of having access to all the music they want to listen to without having to pass a tollbooth and pay a certain amount per time,” Schimel said. “Number two, subscriptions where when you stop paying, your music goes away are a big turn off for music owners. If they take the time to pick the songs they love, make a collection and put their personal stamp on a music subscription, they don’t want to feel that the minute they stop paying a subscription fee, all that disappears or most of it does.”

CWM: FRIEND OR FOE?

Although Comes With Music is not officially in the U.S. yet, Ruth said VZW does view them as the competition. As a new and unique business model, the carrier is constantly evaluating if it is working for the handset maker. So far, he isn’t convinced that it is he said, citing concerns that Nokia has overcommitted itself to the space. Schimel, however, is convinced of the long-term viability of the service and, business-first minded like VZW, of its long-term profitability.

“All I would say is that we have gone into this business in a big way because we see it as an important business for us, and we’ve crafted our business model to drive revenue for ourselves, for labels, for artist, for operators, for everyone in the value chain,” Schimel said. “This is absolutely about being in the services businesses; it is not a device marketing tool per se. It’s about solution selling and services, and that is how we’ve crafted our model and how we are moving forward.”