I was happy to learn of Universal's recent deal with Nokia. Nokia calls it the “Comes With Music” program. Some Nokia cell phones will be bundled with the right to download any Universal recording for a year. All the songs will be free. Users will be able to download the songs to new Nokia phones or to their computers via mobile or fixed-line broadband connections.

Universal acknowledges in this deal that it's no longer about selling "units." Not about selling individual units of music anyway.  Instead, the record company will receive a portion of the monies Nokia receives from selling the hardware, that is, the phones. The digital age has made music freely accessible, and well ... free.  But if you package the music in a way that is attractive to consumers, they will pay. Perhaps not for the music, but for the means of receiving it.  As Mark Mulligan, an analyst at Jupiter Research, stated “[w]hat is bold and strategically important about this is that [Universal is] tacitly accepting that they will never get digital youth to pay for music.” 

The deal with Nokia is actually just one step toward a strategy that Universal calls "Total Music." Under this scheme a whole range of consumer products could include the right to download and listen to music: computers, phones, and MP3 players. I think Universal should be applauded for recognizing that digital transmission of music and the mass marketing of gadgets to capture that music is here to stay, and that the labels must develop new business models for making money. It is true that Universal's plan is not perfect because the cost of the royalty will be past on to the consumer of the gadgets. And many of those devices are not primarily used to get free music. For instance, Universal demanded Microsoft to pay a royalty for Zune players. But Zune purchasers also pay to download music from legit services such as the Zune online store, so it may be argued that it is unfair for a label to force a surcharge on the purchase price of a Zune player because the consumer will be paying twice for music.

In this case though, Nokia will be charging a specific premium just for this service.