Mobile service questioned as Comes With Music bombs

With infrastructure and handset vendors claiming their profitability could be greatly improved by boosting their services' revenues, the revelation that Nokia's flagship Comes With Music (CWM) service has attracted just over 100,000 users worldwide must be more than worrying.

The service, positioned as a direct competitor to Apple's iTunes, launched first in the UK one year ago, backed by a multi-million pound pre-Christmas marketing campaign. Since then it has only gained 33,000 active users--a pitiful amount given the hype and hopes that Nokia had built around CWM, albeit that Nokia might argue that the UK figure is good when compared to the 691 in Italy and 560 in Switzerland that have subscribed to the service.

Having launched a handset tailored to supporting CWM--the Nokia 5800, which has been successful as a standalone low-mid tier smartphone--Nokia has since reemphasised its determination to push forward and has recently claimed it would improve and widen the scope of CWM. Staking an element of his increasingly lacklustre performance on achieving this, Olli-Pekka Kallasvuo, chief executive of Nokia, said that he wanted the company to have 300 million users of its mobile services by the end of 2011.

Perhaps he shouldn't rely too heavily on CWM, but with the Ovi Store only now stumbling its way into being a near-commercial service, it is difficult to see where these 300 million users will magically appear from within the next two years.

However, mobile services are a new and difficult game for all involved. Operators have been naturally reluctant to promote a music service whereby the revenues are markedly less than a service they have built themselves. This has especially been the case with mobile music with Vodafone, Orange and others, albeit that their in-house developed music services might lack the gloss of something like CWM.

The lack of success of CWM keenly illustrates the multitude of issues that need to be understood and resolved prior to launching mobile services. In its case, CWM has chiefly suffered because the consumer didn't (and still doesn't) understand the proposition. Also, the service has been hampered by the challenges presented by DRM-locked tracks, localising content, a limited range of CWM compatible phones and free music streaming offered by other companies.

Nokia has since conceded that when first launched in the UK the two CWM handsets supporting the service were ‘slightly out of date', but remains blind to the other issues, in particular the dramatic rise of alternative solutions like 7digital or Spotify.

The ongoing troubles of CWM must provide clear pointers to operators and vendors wanting to enter the mobile service market. The expertise required is manifestly outside their traditional skills and the opportunities for failure are high.

But for those that succeed, the rewards will be transforming.-Paul