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Nokia in free music pact with Universal

Nokia Oyj said on Tuesday it has agreed with the world’s largest music group Universal to offer free 12-month access to Universal artists’ music for buyers of Nokia’s music phones. The world’s top cellphone maker said it has signed up Universal Music Group International, owned by French media giant Vivendi, for its new “Comes With Music” offering and is eyeing similar deals with other labels before the offer starts in the second half of 2008.

“We are in talks with all major labels. The response from labels has been very, very positive,” said Nokia spokesman Damian Stathonikos.

Nokia said the new offering would differ from other packages on the market as consumers can keep all the music they have downloaded for free during the 12 month period.

“The financial barrier to try new music is completely removed. It fundamentally changes a lot of business logic in the music industry,” Stathonikos said.

The free access to new music could hurt peer-to-peer networking while also raising pressure on Apple Inc.

Nokia moved into the navigation industry in a similar manner earlier this year, offering free map data and routing, while charging for more detailed navigation information.