Death Spiral

Interesting news from Universal and a new startup called SpiralFrog ...

A new online music company said today that it would make a huge catalog of songs from the world’s largest record company, the Universal Music Group, available for consumers to download free.

The company, called SpiralFrog, said its intention was to wean music fans, especially young people, away from illegal downloads and pirate music sites by offering a legitimate source that is supported by advertising instead of download fees.

SpiralFrog is the latest to offer a challenge to Apple Computer’s hugely successful iTunes service, which allows consumers to download songs legally for 99 cents apiece, and its many smaller imitators. Though the venture is not the first to try a free, ad-supported approach, the backing of Universal, with millions of songs in its catalog from thousands of artists like Eminem and Gwen Stefani, Elton John and Gloria Estefan, Count Basie and Hank Williams, promises to give it instant credibilty and scale.

Will SpiralFrog spell the end of iTunes? Definitely not. SpiralFrog only permits users to download music to one computer and one handheld device (it will not work with iPods, and consumers cannot use "their" music to make mixed CDs); ads are an integral part of the SprialFrog experience; and to date SprialFrog only includes content from Universal.

Consumers want to own their music - period. The labels have devised many different scenarios in which consumers rent music (SpiralFrog among them), but these are nothing more than a music industry conceit. Until the "hit men" grasp this fact, the world will continue to gravitate towards peer-to-peer downloads and iTunes.

We are betting that SNOCAP will play an important role in reinvigorating the music industry. SNOCAP allows consumers to purchase music without having to worry about downloading an incomplete file or a computer virus; it also gives artists the flexibility to determine their own pricing and DRM (if any). Our other music play - Pandora - helps people to discover new songs and artists and share their channels with their friends.

SNOCAP and Pandora are gaining traction because they provide as much benefit to consumers as labels. By contrast, SpriralFrog is trying to convince consumers that its music is "free" when it really isn't.

The only sound I hear coming from SpiralFrog is "croak."