Music service looks set to cost Nokia

Nokia looks like it is heading for more trouble following the news that its 'Comes With Music' service seems set to severely damage its handset profit margins. According to the Hollywood Reporter, Nokia will be paying the world's biggest label, Universal Music Group, US$35 per handset to bundle access to the label's catalogue. The deal, which has met with astonishment by music industry veterans, is around seven times what some privately estimated the deal was worth. While this news was probably not relevant to Nokia's financial announcement--which knocked 13 per cent off its share price, this 'Comes With Music' deal with Universal does not look good for the future fortunes of Nokia.

For more on this story:
- read The Register and Arstechnica

Related stories:
Nokia: Comes With Music deals close. Nokia story 
EMI in talks to join Nokia's Comes With Music. EMI Story

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