Ars Technica has dug up a few of the missing details on Nokia’s new “Comes With Music” offering, whereby customers who purchase a qualifying Nokia phone (due to go on sale in the second half of 2008) will have twelve month’s unlimited access to Universal’s entire music catalog.

According to Ars:

• While customers will be able to keep any downloaded tracks even after the “free” subscription period ends, the service employs Windows DRM, meaning that music can only be played on a PC or, presumably, a compatible Nokia device. If you own an iPod or Zune, you’re out of luck.
• Tracks can only be transfered to one PC and one registered Nokia device at a time.
• Music can be burned to CD but only after paying an additional upgrade fee per-track.
• As we suspected, Universal’s participation in Nokia’s “Comes With Music” offering is part of the label’s Total Music plan, whereby the cost of a music subscription is absorbed into the price of a supported device.
• One the twelve-month period ends, the only way to continue subscribing is to purchase a new “Comes With Music” Nokia device.

Ars Technica makes a big song and dance out of the fact that Nokia’s “Comes With Music” service will employ Windows DRM. But frankly, what did they expect? Despite a very welcome industry move away from DRM for download-to-own (DTO) music sales, there is no way on earth Universal (or any other major label) would offer unlimited DTO access to its entire catalog, in one go, and without any technological restrictions on how those tracks might be shared.

And for Nokia, the idea of going DRM-free also makes little sense. If users can transfer their “Comes With Music” collection to an iPod (or other competing device), then there seems little incentive to purchase a new Nokia phone as a way of renewing their subscription.

In fact, trying to work through the conflict of interests between the major labels, device manufacturers, ISPs/carriers, and, of course, consumers, that are inherent in Universal’s Total Music model, and I’m becoming increasingly convinced that the idea is doomed from the start.

“The single biggest issue that’s facing the music industry is there are huge waves of devices being sold and shipped to consumers on a daily basis. Very few of these devices are then subsequently used to subscribe [to] legitimate downloads,” says Universal Music executive Rob Wells.

Enter Nokia’s new “Comes With Music” devices.

Announced at the annual Nokia World conference today, “Comes With Music” will enable customers to buy a Nokia device with a year of unlimited access to “millions of tracks”, and, rather surprisingly, get to keep those tracks once the twelve month period ends. Of the four major labels, however, Universal Music is the only one to have signed on. Nokia gave no further details, such as the type of DRM employed (if any?), and the likely cost of “Comes With Music”-ready handsets. Nor in which regions the service will eventually be made available.

It looks like two of the Internet’s biggest Web radio services may be shutting down after being hit with a 38 percent increase in royalties to air the music they play.

Bloomberg reports that Yahoo! and AOL have stopped directing users to their radio sites after Sound Exchange, the Washington, D.C.-based group representing artists and record labels, began collecting higher fees in July. As a result, the number of people using Yahoo! Launchcast fell 11 percent to 5.1 million in October, and AOL users declined 10 percent to 2.7 million from 3 million, according to ComScore.

“We’re not going to stay in the business if cost is more than we can make long term,” Ian Rogers, general manager of Yahoo!’s music unit, told Bloomberg.

It may seem like an insignificant dot on the music industry landscape at the moment. But if EMI, one of the Big Four record labels, goes through with its plan to “substantially” reduce the amount of money it gives to trade organizations, maybe, just maybe, it will help force these groups to re-examine their legal strategies and continue the push for DRM-free music.

Guy Hands, Terra Firms’s chief executive officer, sent letters to the industry’s two largest trade groups — the Recording Industry Association of America (RIAA) and the International Federation of the Phonographic Industry (IFPI) — threatening to slash EMI’s annual funding to the organizations by at least half, The Financial Times and Reuters reported. Terra Firma, a private equity firm, bought the financially-troubled EMI in May for nearly $5 billion. Hands has been stripping costs since then and has been questioning the return on investment in supporting the RIAA and IFPI.

Now this would be one heck of an early present: The Entertainment Retailers Association (ERA), which represents retailers who sell entertainment products such as music, DVDs and games, has asked the music industry to end digital rights management by Christmas.

The ERA blames digital copy protection for the slow growth of digital music sales in the UK. ERA Director Kim Bayley told the the Financial Times that DRM is “stifling growth and working against the consumer interest.”

As evidence, pre-Christmas sales are not off to a bang-up start. The music industry makes at least 40 percent of its annual revenue in the fourth quarter culminating at Christmas. The traditional sales build up has started later than usual, and it has industry participants like the ERA nervous.

SpiralFrog, the ad-supported music download service that we reviewed back in September, is bleeding cash at a rate of $1 million per month over the last three months.

Marshal Kirkpatrick, over at our sister blog Read/WriteWeb writes:

According to financial filings required by the company’s investors and dug up by Joseph Weisenthal at PaidContent, the company reported a Q3 loss of $3.4 million on revenue of only $20,400, leaving only $2.3 million in the company’s bank account.

Such huge revenue losses based on a measly turnover of only $20,400 doesn’t seem to bode well for SpiralFrog’s business model. It’s hard to comprehend how the company has such high operational costs, although it’s a lot easier to decipher why there has been such low take-up of the service. Getting music for “free” sounds great until you factor in the inconvenience of having to log in regularly to sit through more ads and surveys in order to stop the music you’ve already downloaded from expiring so that it will continue to play. Couple this with the fact that the music only works on a Windows PC through Windows Media Player — no transferring to portable devices, let alone an iPod — and it’s clear that SpiralFrog is no competitor to piracy or other more traditional download services such as iTunes.

The company’s answer? Marketing, marketing and marketing — including ‘hiring’ bloggers.

From SpiralFrog’s SEC filing:

“Execute marketing campaign in the United States aimed at 13-34 year olds, through one or more of the following approaches: hire gorilla marketing firms for unconventional promotions; consumer targeted press releases; advertising on some of the youth community sites; or hiring ‘bloggers’ to attract attention to us on the internet.”

Also see: Music industry: five alternative business models

Two significant bits of music news this week: The Beatles are expected to release their catalog into the digital realm sometime in 2008, and U2 has given fans an unprecedented sneak preview of the unreleased song “Wave of Sorrow” through the Facebook app iLike.

We’ve been hearing about the Beatles making their music available for download off and on for the past year or so, but nothing was ever official. It’s now about as official as it can get as Sir Paul McCartney told Billboard that he’s “pretty sure” the band’s music will go digital in 2008, although he didn’t say when specifically.

“It’s happening soon,” McCartney said. “Most of us are all sort of ready. The whole thing is primed, ready to go — there’s just maybe one little sticking point left , and I think that it’s being cleared up as we speak, so it shouldn’t be too long.”

The Beatles are perhaps the highest-profile band not making their music available for purchase online. The solo catalogs of McCartney, John Lennon, George Harrison, and Ringo Starr are all now available for download.