WMG Bets On Bundled Music Handset Deals With Nokia, Others

At the moment, mobile revenues remained pretty minimal for Warner Music Group (NYSE: WMG) in Q2. But during the company's conference call with investors, Edgar Bronfman, Jr., WMG's chairman and CEO, said that although ringtone revenue lagged expectations in the U.S. and Europe, there is hope in future products and services. In particular, Bronfman pointed to Nokia's "Comes With Music" service, which includes unlimited music downloads for a year with the purchase of some Nokia phones. WMG signed on late last month. Comes With Music was unveiled last December and is slated to be launched on Nokia handsets sometime this year. Some of Bronfman's comments on the Nokia deal and mobile in general follow from the transcript on Seeking Alpha:

-- The leading example: Bronfman called the bundling access to songs and artists on phones is "an important step in the evolution of digital music. Nokia's Comes with Music is a leading example. We believe all stakeholders will benefit from the access model. It presents an attractive value proposition for consumers who want to achieve a richer, deeper, music experience. Artists have the opportunity to significantly broaden their fan base. Record companies, music publishers, and artists can monetize consumer behavior across vast networks and platforms. And device manufacturers can drive device purchases, customer retention, and data revenue by associating their devices with leading global and local artist brands and comprehensive music offerings." The advent of the access business will allow both the mobile industry and the music industry the ability to view the world through the same lens—namely though "average revenue per user."

-- Other access service deals: WMG isn't just betting on Nokia (NYSE: NOK). The company has signed access-based deals in France with Orange and with the Danish carrier, TVC. Bronfman hinted at "several" other access deals nearing completion.

Related

• WMG Call: Bronfman: We're Not Doing As Bad As The Rest Of The Music Industry
• Earnings: Warner Music Group Q2 Digital Revs Rise 39 Percent; Net Loss Reduced
• Thumbplay Partners With Warner Music To Mark Its Fourth Music Label Deal
• Nokia Signs On Warner Music For Its Flat Rate Music Service; EMI Only Major Holdout

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