Warner is withholding its music from the Nokia Music Store in part because of concerns its music is being traded illegally on Mosh, reports the WSJ. This was covered a couple of months ago, at which time Nokia (NYSE: NOK) emphasised it is going out of its way to prevent copyright material being traded. Nokia spokesman Kari Tuutti said Nokia could only remove content at the request of the content owners, although it does use automated software to monitor the site for copyrighted material. Any and all social networks have problems with people trading copyrighted material, but keeping the content from a paying site doesn’t seem like an intelligent way to compensate for revenue loss. Warner is the third largest music label by revenue behind Universal and Sony (NYSE: SNE) BMG, but the those two labels and EMI have their music on the Nokia Music Store. So who loses the most from this? Well, the Nokia Music Store only works with a couple of handsets at the moment, so sales won’t be significant for a while—It’s possible Nokia needs the range to attract customers more than Warner needs the extra sales. But from a branding point of view it doesn’t make Warner look good, and it’s probably not the best way to approach digital distribution in general.

Update: It’s been brought to my attention that the Nokia Music Store is embedded on two handsets, but if people want to download to their PC and sideload to their phone it work on any handset that supports Windows Media DRM. 

• Nokia Launches UK Music Store
• Updated: Nokia’s Mosh Allowing Copyright-Infringing Sharing? Nokia Responds
• Mosh: Distribution Network For Long-Tail Content