Nokia pulls plug on free music in most markets

Mon Jan 17, 2011 5:42am EST

Related Topics

* Ends music bundles in 27 markets out of 33

* Some licensing deals ran out at end 2010

* Continues in 6 growth markets, including China, India

* Music store not impacted, continues in 38 countries

By Tarmo Virki, European Technology Correspondent

HELSINKI, Jan 17 (Reuters) - The world's top cellphone maker, Nokia (NOK1V.HE), is ending its bundling of free music downloads with cellphones in 27 countries, where it has gained little traction since its 2008 launch.

Nokia will continue to sell phones with 12-month subscription to free music downloads in China, India and Indonesia and with 6-month subscriptions in Brazil, Turkey and South Africa.

All four major labels -- Vivendi's (VIV.PA) Universal Music, EMI, Warner Music Group WMG.N and the music arm of Sony (6758.T) -- signed up for the service, which was seen at start as a major challenger for Apple's (AAPL.O) iTunes.

Nokia unveiled the service in late 2008 in Britain -- seen as a test market for new mobile services in Europe -- but has lacked operator support and failed to attract many customers.

Reasons behind the lacklustre performance include use of older supporting handsets for the product at its launch, digital rights management (DRM) software that tied downloaded music to the device and a difficult to understand product offering.

"The markets clearly want a DRM-free music service," said a spokesman for Nokia, adding the firm continues to offer DRM-free tracks through its music store in 38 countries.

DRM software limits sharing of songs between different devices.

Consumers with the free music bundle in the 27 countries where the sale of the service have stopped will continue to have access until their subscriptions run out. (Editing by Louise Heavens)

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