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	<title>MediaMemo &#187; Comes With Music</title>
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	<description>by Peter Kafka</description>
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		<title>Nokia's Warning Sounds Bad for the Music Business</title>
		<link>http://mediamemo.allthingsd.com/20081114/nokias-warning-sounds-bad-for-the-music-business/</link>
		<comments>http://mediamemo.allthingsd.com/20081114/nokias-warning-sounds-bad-for-the-music-business/#comments</comments>
		<pubDate>Fri, 14 Nov 2008 19:22:25 +0000</pubDate>
		<dc:creator>Peter Kafka</dc:creator>
				<category><![CDATA[Apple]]></category>
		<category><![CDATA[MediaMemo]]></category>
		<category><![CDATA[Peter Kafka]]></category>
		<category><![CDATA[music]]></category>
		<category><![CDATA[Comes With Music]]></category>
		<category><![CDATA[EMI Music Group]]></category>
		<category><![CDATA[iTunes]]></category>
		<category><![CDATA[Nokia]]></category>
		<category><![CDATA[Sony]]></category>
		<category><![CDATA[Universal Music Group]]></category>
		<category><![CDATA[Warner Music Group]]></category>

		<guid isPermaLink="false">http://mediamemo.allthingsd.com/?p=1094</guid>
		<description><![CDATA[Mobile giant Nokia's dire warning today--its fourth-quarter sales will be below expectations, and it sees the overall industry contracting in 2009--didn't just scare investors in mobile/wireless stocks. It also discouraged beaten-down executives in the music industry, who have been hoping that the mobile business will help them crawl out of a very deep hole.]]></description>
			<content:encoded><![CDATA[<p><a href="http://mediamemo.allthingsd.com/files/2008/11/nokia.jpg"><img class="alignright size-medium wp-image-1097" title="nokia" src="http://mediamemo.allthingsd.com/files/2008/11/nokia-217x300.jpg" alt="" width="217" height="300" /></a>Mobile giant Nokia&#8217;s dire warning today&#8211;<a href="http://biz.yahoo.com/prnews/081114/ukf012.html?.v=83">its fourth-quarter sales will be below expectations, and it sees the overall industry contracting in 2009</a>&#8211;didn&#8217;t just scare investors in mobile/wireless stocks. It also discouraged beaten-down executives in the music industry, who have been hoping that the mobile business will help them crawl out of a very deep hole.</p>
<p>That seemed plausible a few years ago, when consumers embraced the ringtone trend and shelled out $2.50 to buy a couple seconds of music for their phones. But <em>trend</em> is the operative word here&#8211;ringtone sales have been flattening for some time. And hopes that consumers would use their phones to buy music over the air via iTunes-like stores haven&#8217;t panned out, either.</p>
<p>New plan: Tether music sales directly to the sale of mobile phones, via bundling plans like Nokia&#8217;s &#8220;Comes With Music.&#8221; That program, which just launched in the U.K. last month, makes an interesting proposition: Buy a $229 Nokia handset, and you can download as much music as you want from the big labels&#8211;Warner Music Group (WMG); Sony (SNE); Vivendi&#8217;s Universal Music Group and EMI Music Group&#8211;for a year.</p>
<p>If that works, it&#8217;s a double win for the business: It gets consumers to actually pay for digital music and it gets them to pay via an outlet that&#8217;s not Apple&#8217;s iTunes, which is a big deal for an industry trying to reduce its dependence on Steve Jobs and company.</p>
<p>But it only works if people are actually buying new phones, period. And Nokia (NOK) is now saying that looks a whole lot less likely for the foreseeable future.</p>
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