HIGHLIGHT: The mind behind the mobile phone manufacturer’s Internet moves spells out Nokia’s latest music initiative, and how the U.S. and record labels fit into its plans. Anssi Vanjoki, executive VP/GM of multimedia at Nokia, is the visionary force behind the company’s efforts to converge mobile phones with the Internet, including Nokia’s N series of multimedia smart phones… This week, Nokia unveiled a new initiative called Comes With Music. The program offers anyone buying select Nokia phones a full year’s worth of free music as a sort of subsidized subscription plan. The service, which won’t be publicly available until sometime in the first half of next year, works like this: Those buying certain Nokia phones will be able to download as many songs as they like, at no additional charge, for a year. The cost of the music is built into the device, and Nokia will pay record labels the appropriate licensing fees. Users will then be able to keep all the music they’ve downloaded even after the year is up. There are restrictions. Like other subscription tracks, any music downloaded via the service can’t be burned onto a CD unless the user buys the track à la carte (which the user will have the opportunity to do).

The tracks will also contain digital rights management technology that will limit their compatibility with other devices.  Universal Music Group is the first label to sign on to the program, and Nokia says it is in discussions with others as well. Nokia’s effort closely resembles the Total Music strategy UMG has quietly been promoting in recent months, which seeks to provide various devices with similar unlimited music; the cost of around a year’s worth of music licensing is included in the price of the device. The Comes With Music news comes on the heels of a much broader Nokia effort to expand its influence beyond simply making phones to operating a suite of Internet services focused on entertainment. Its new Ovi service includes, among other things, a music service that will let users subscribing to participating operators buy and download full songs. It also includes games, video and social networking services. Other music efforts include a recommendation and discovery service overseen by David Bowie and a line of multimedia and music phones spearheaded by the N95. The company bought digital music service provider Loudeye last year for $60 million.

The acquisition remains at the core of every music-related service Nokia has, including Comes With Music. But Nokia’s stab at mobile social networking — MOSH — has angered some labels. Warner Music Group (WMG), for instance, has refused to license its catalog to the Ovi music store because the MOSH service allows users to share copyrighted content.Vanjoki took a few moments at the Nokia World conference — where the Comes With Music service was announced — to tell Billboard how music in general fits into Nokia’s broader digital entertainment future.What are you trying to accomplish with the Comes With Music initiative?Comes With Music is part of a bigger plan that Nokia has. For a number of years, Nokia has developed the software know-how to become an Internet company. Digital and the Internet has shaped many industries that have been based on a more analog world. Music is just one. So new business models are necessary for the industry to take a different turn and prosper in the digital age.When we look at how people are turning their mobile phones into small computers, these phones are becoming the access point for how people are going to live their digital lives. This kind of functionality follows people everywhere. Music is everywhere and is very important to almost everybody. So we wanted to offer an alternative to getting it that is legal, that is making music consumption normal and easy to use, and at the same time obey the business rules that exist.Is the price of the year’s subscription included in the cost of the device, and do you pay the labels from that?We’re not giving any of the details of the setup behind Comes With Music between us and the music labels. The only thing we’re saying is that both ourselves and Universal, and the other music companies who join in, will find this a profitable venture for all parties.What about users?Users will not have to pay anything extra.

It’s embedded in the total price in the product. Can they transfer Comes With Music files to a computer?Yes, all the music that you get you can download directly to your mobile [phone] or your PC — and the music is residing on either or both. We also keep a vault for you where all the music that you have purchased is kept for the record should you lose any of it. We’ll hold this vault for you even after your [subscription] comes to an end. Can I play Comes With Music tracks on other portable devices?Yes. You have rights to transport those songs to five additional devices.And I can keep the music even after the year is up even if I don’t buy a new phone?It doesn’t matter. The music you get is yours to keep for as long as you want, regardless of what device you own.How does it work with the Ovi à la carte music service?From a functional standpoint, the Comes With Music service is built on the platform of our Ovi music service. When you get the device that comes with music, the way you download the music you want to the device is done through the Ovi music store. Should the music you want not be available from the labels that are part of Comes With Music, you can still buy any music under the normal business conditions, as in single downloads.Your Ovi music service and the Comes With Music plan seems limited to the European market. Why not a stronger music presence in the United States?Our Ovi music store we started in the U.K. We’re rolling it out to major European and Asian markets next. We have not announced our plans for North and South America yet, but it will be there as well. The same will go for Comes With Music. We have not given any territorial information at this time. It’ll be a surprise.

But is there anything that keeps you from having a stronger U.S. presence?No, there is nothing that keeps us from it. The very simple reason is the very low population of devices that Nokia has in the U.S. market at the moment. We are in the process of improving our distribution methods in the U.S.WMG is one label voicing concern about MOSH and the ability for users to share content, which led to it not licensing music for the Ovi service. How do you intend to alleviate those concerns?We are in very constructive and very warm-spirited discussions with all the labels, including Warner.