At the London Calling music conference on Thursday, there was little doubt among the panel assembled to discuss the value of music on mobiles that cell phones would one day be the sole device that consumers used to access and listen to music. But what was in question was how to give consumers that access, and more importantly, if giving music away in bundled services—such as Nokia’s Comes With Music--led to its further commoditization, ironically stoking the consumer view that music was something to be had for “free”.

Bundled music services are here to stay. As Orange’s Head of Music Richard Wheeler noted, music is being paid for on mobile, but by a higher end demographic. The challenge for operators is reaching the younger, low-spending, usually pay-as-you go customers, who don’t typically pay for music off mobile if they can help it.

According to Wheeler, content on Orange “has been rated zero” for at least a year now, meaning that the operator does not make a penny from the actual content it sells (though may make money on the data download depending on the consumer’s tariff).

“This is the fundamental difference between operators and [record labels],” said Wheeler. “Let’s be clear, the reason [operators] are involved in music is because we see music as valuable property that can attract and keep customers. It’s a retention device, where as labels are looking to build a retail business.” To this end, Wheeler said the operator would be offering more services such as Musique Max, its recently launched music offering in France that bundles music with monthly tariffs.

Wheeler’s point, meanwhile, that a higher demographic is willing to pay for music on mobile raises yet another question over Comes With Music. By all accounts, Nokia’s deals with Universal and Sony (NYSE: SNE) BMG, the two labels signed to the service, haven’t come cheap, despite their denials. The handset maker hasn’t yet announced pricing for its CWM phones, but if they price them high, they are targeting a audience who have already showed a willingness to pay. If they price them low, however, they will be heavily subsidizing the handsets. 

More from Motorola (NYSE: MOT), Sony Ericsson (NSDQ: ERIC) on Nokia’s (NYSE: NOK) Comes with Music service at mocoNews

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