Nokia, Warner in Online Music Deal

The world’s top mobile phone maker Nokia (NYSE: NOK) signed a deal with Warner Music Group to make Warner titles available through its Comes With Music service and online music store, Nokia said on Tuesday.

With the launch of Comes With Music, Nokia is the first mobile handset maker to push heavily into content. Unlike other packages on the market, the service would let users keep all the music they have downloaded during the year.

“[Comes With Music] is the first global initiative to fundamentally align the interests of music companies with telecommunications companies,” said Edgar Bronfman, group chief executive of Warner Music.

Nokia struck a deal with Universal in December and Sony BMG in April to offer tracks from their labels on the music service, to be launched in the second half of this year.

Having the three largest music labels on board looks to help Nokia attract smaller music companies and challenge the dominant pay-per-track sales model for digital music.

Such unlimited download models could offer a shot in the arm to the ailing music industry, which is struggling to find ways to make up for falling CD sales. The music download market totaled just $2.9 billion in 2007.

Nokia sold 146 million music phones last year. If all these had included the “Comes with Music” bundle, just an extra $20 per phone would make Nokia’s service bigger than the total market.

Record labels are looking to Nokia and others to challenge the dominance of Apple’s iTunes, as they have struggled to negotiate with the U.S. group on a level footing on issues such as pricing.

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