Nokia is experiencing ups and downs in the long process of launching the mobile music services that it contemplated when it acquired the OD2 online music retail infrastructure from Loudeye in 2006.  The good news is that it has finally answered the big question of which carriers will support the Nokia Music Store by signing up two big ones, Telefonica and now Vodafone.  The bad news is that Warner Music Group (WMG) has decided to withhold licensing from the service.

WMG is apparently doing this because another of the Internet services that Nokia has been launching under the Ovi brand name is a file-sharing service called Mosh, which is being used to share copyrighted music.  The Nokia Music Store uses Windows Media Audio and Windows Media DRM.

Ever since 2002, when Rhapsody became the first Internet music service to obtain licenses from all of the (then five) major music companies (predating iTunes in this respect), it has become an article of faith that copyright-respecting music services will only launch -- or only be taken seriously -- if they get licenses to all major-label content.  Yet as more large companies move into the online content arena, the collective influence of the majors is being tested in new ways. 

For example, Amazon's AmazonMP3 service features content from Universal Music Group (UMG) and EMI, as well as many independent labels, but not (so far) from WMG or SonyBMG Music.  Yet Amazon's global clout and household-word status guarantees it some momentum, which may induce the latter two majors to join in despite AmazonMP3's lack of DRM.

The case with WMG and Nokia is a converse one.  Nokia Music Store is using DRM, but Nokia's retail footprint includes a service that WMG asserts does not respect copyright; therefore WMG is withholding licensing in an attempt to force Nokia to crack down on misuse on Mosh (e.g., through use of audio fingerprinting).  In effect, WMG is gambling that Nokia will acquiesce in order to make its service more attractive in a mobile music market that is getting more and more crowded with more multinational players -- such as Omnifone, which also launched a service in the UK over Vodafone last week -- even as it heats up.  It is somewhat ironic that the type of leverage that WMG seeks against Nokia, whose service can potentially attract a large audience worldwide, is irrelevant against a smaller player.

In the end, the majors hurt themselves if they squelch too many opportunities to make their music convenient to obtain legally, thereby pushing more users towards illegal sources... like Mosh.  The easy solution would be for the majors to create uniform licensing terms, which could include requirements for DRM or other digital rights technologies.  But that's impossible under antitrust law.  In fact, WMG's move against Nokia could even be useful to WMG as evidence against accusations of collusion with the other three majors that are simmering in the background, such as in the counterclaims that Lime Wire is making in its legal battle with the music industry. 

In any case, it will be interesting to see whether WMG's move will embolden the other majors to assert similar leverage against the other big players that are moving into the online and mobile music markets.

Story Courtesy of internetnews.com