Next session at today’s MidemNet conference is Nokia’s Dr Tero Ojanpera, EVP of entertainment and communities. He’s promised that his on-stage interview today will be “hard-hitting” apparently, so he has our rapt attention. As long as he addresses those reports of disappointing Comes With Music sales too, of course.Interviewer Bill Werde from Billboard kicks off by asking him about Comes With Music. Ojanpera says that within the next ten weeks, Nokia will roll out CWM to Australia and Singapore – i.e. in the first quarter.Why those? “They are great markets for Nokia, and we have been able to do a lot of the agreements that we need to run. It’s not just about getting licences from the labels, it’s the publishers, the operators, the retailers… We are also looking now at a European rollout.”He doesn’t say who and when though, on that latter point. “2009 will be a very big investment on our part,” he says. “it’s not just about putting the service out there. Marketing will be a critical element.”What about the US? “We have said we are looking at the US also in 2009, and also in Latin America. So it’s about looking in the whole world, more or less.”On how Comes With Music fits into the wider strategy at Nokia. “We want it to provide not only revenues, but also profits,” he says. “It’s a business for us.”So is there an opportunity for new models – ad-supported models for example? “Currently the consumer buys the device that Comes With Music, and during one year can download all the music you like, and out of the price they pay, we pay a revenue share to the different rights-holders.”We know that. What about other business models? “Advertising is something that we have been looking at. We are providing some content – not the music tracks – but videos or content from music magazines that can be monetised through advertising. But streaming or downloading, that’s the big bet we are making with Comes With Music.”How has the initial response from the labels and the publishers been in the UK, and how has it gone? Ojanpera says that once Nokia went to negotiate the deals – “in the end we got everything lined up for the UK launch, but now we are working especially on the pan-European plan, and we have got a breakthrough on the pan-European side – we have signed pan-European terms with the major publishing companies and publishing collecting societies.”What about that process and terms? The latter, natch, are confidential. “The main point for us is to have terms that we can live with from an economic point of view, and the major rights-holders have to have terms they can live with. We are coming to a very positive resolution. The faster we can get these new models in the marketplace, the bigger chance we have to expand the market. The digital business is where the growth is coming from, how can we accelerate that?”Werde suggests that the music industry has a tendency to anoint saviours – who can save the music business. How big can Comes With Music be? “Can the idea of subscription models on mobile phones, how big can that be, and what is the timeline?” he asks.Ojanpera says that “we are not talking about this being hundreds of millions – it has to be a bigger thing”. And timelines? “We always overestimate the impact in the short-term, and underestimate it in the long term,” he says. “We continue to invest. We went to the UK, we got some learnings, and in the new countries we will have the new 5800 device with the touchscreen capabilities and video. It’s an exciting device, and connecting that with unlimited downloads will be even more exciting.”Also: “It’s not about hey, I tried this here and it didn’t work so I will stop.”So, the UK then. The price point of the 5310 has lowered, and reports suggest sales aren’t good. Why? “I don’t want to put you on the spot” says Werde. Why not?!Anyway, Ojanpera’s response, pointing out that Nokia has been expanding the device base for CWM in the UK. “Our target is not any more about ‘this is a few specific devices’, but going forward we will have this in all price points, and make this a mass-market phenomenon.”Other learnings: “What we are seeing three months in in the UK is that the consumption pattern is like a bell curve. There are certain users that don’t activate, and then a really nice bell curve where we are seeing good downloads in the middle and…”Werde interjects – why are some people not activating? Ojanpera says some simply missed the offer. Bizarre. But back to the bell curve.”We are seeing some people downloading hundreds of tracks a month initially, but when the base expands this will be even more like a bell curve. There were some bloggers who went and downloaded a lot, but once they noticed Nokia was not doing anything, they gave up! We are not really seeing anybody who is abusing the service. It’s validating all the research that was done before – this is how people will use it – some will use a lot, some will use a little, and it will average out.”He says that on average, “it’s going to be a good, healthy business”, while stressing that people are downloading regularly, rather than going in once and downloading a lot of tunes, then not going back. “People are engaged, they like the service, and they will come back and download,” he says.Is the offer simple enough, asks Werde? “One thing is of course, this comes back to the marketing, and that needs to be fine-tuned all the time. The actual product is so simple – one year of music, unlimited downloads in your phone and your PC. That’s simple enough, and a great offer.”But he says that the message needs to be kept simple. “We need to make sure that as an industry we don’t confuse the consumer with a lot of new offers out there.”Now onto what else Nokia is up to on the music side of things. It’s running an unsigned artists club in Asia, and is looking at how to incorporate concert venues and ticketing within Nokia’s Maps technology – “You come to Cannes, and you will see through the map what venues are there and be able to buy tickets,” he says. Nokia is also working with music media like Rolling Stone, and also video tech firm Kyte.Questions from the audience: first about competition with operators. That old chestnut. Nokia is, of course, “planning to collaborate with the operators”, with Ojanpera citing 3 UK as one example. He says Nokia has a couple of operator deals in place for Australia and Singapore though.Another question – will Nokia build a music community or leverage existing social networks? And will it do anything in the music recognition area? “I don’t think there is one community out there – there are many,” replies Ojanpera to the first of those. “MySpace and Facebook only account for 30% of the consumers using communities worldwide – it was a big surprise to me – so we will be working with the existing communities, integrating them into the offer. This is a world of mash-ups, and we have a good discussion going on…”He says Nokia is also looking at building its own communities – it has a “simple” service with its N-Gage gaming platform where players can register and post their high scores. “That will also link to the music. We announced a couple of months ago a dance game that will link later on to the Nokia Music Store.”What about Shazam-style music recognition? “Yes, we are working of course, but not announcing any news here on that front. We are looking at third-party services, and anybody with that service can bring it to Nokia phones. But there will be a number of different applications.”
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