Nokia last week announced the closure of its Ovi Music Unlimited service across the majority of markets where it was available, prompting a number of reports pouring over the details of the failure – with plenty of “I told you so” in evidence. The company itself said that it has not been able to connect with the customer base in the way it thought it would when the service debuted. But as much as the service has been a failure in many markets, Nokia also feels the value in maintaining it to some degree in others, indicating that the picture is not entirely black.

During the heady years of consolidation in the market, there was much made of the benefits of scale across multiple markets, and the ability to offer products globally in order to deliver advanced services at a reduced cost.  But this ignores the fact that different countries have different preferences – even within regional groups – and that the “one size fits all” approach to services can equally translate to “one size fits none.”

Look at Vodafone Group’s aborted efforts in Japan as an example from history. While it is worth noting that by most metrics Vodafone does a sterling job globally, the company exited the Japanese market in 2006 with its tail between its legs. A number of reorganisations and restructures failed to turn-around a poor performance at what could have been the jewel in the operator’s crown. It was generally believed that by making its decisions in Japan with an international perspective, Vodafone ignored the unique needs of the market, and customers headed for the out door. And there was little evidence that its experience in Japan had benefitted customers in Vodafone’s core European markets.

At Mobile Asia Congress in November, executives from SINA Mobile and SK Telecom pointed out that their services outrank global players such as Twitter and Facebook in their home countries, while even the all-conquering Google sees its services losing out in some markets – in China, Baidu is the search provider of choice, for example. The fact of the matter is that however good a service is, there is no guarantee it will gain traction internationally if it is out of kilter with specific market demands.

Nokia’s music proposition was genuinely interesting, even if there were question marks over the economics of the service right from the start. The company has a portfolio of attractive music-oriented handsets for the mass-market, and bundling these with content seems to be a recipe for success. But the problem with launching a new service is that it takes time to grow the user base, while a lot of the cost of launch is up-front – in many markets Ovi Music Unlimited was promoted heavily. Nokia was unable to generate the “critical mass” that would have propelled the service forward, with reports indicating that customer take-up was lukewarm at best.

Nokia’s experience seems to fit with the perceived wisdom of subscription music services in general, which is that there is a large addressable market in certain APAC and Latin American countries, but not much elsewhere. Where Nokia had an audience familiar with the concept, it did all right. Where it was launching a new proposition to the market, it failed to lure users away from established alternatives that they already understood and used. So as a global proposition, Ovi Music Unlimited did not stand a chance: on a country-by-country basis, the outcome was very different.

Steve Costello

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