Music startups sure don’t seem to have it easy these days. Lawsuit after lawsuit is raining down on some of them, and legal threats, fierce competition but evidently also the economic downturn and the decline in digital advertising spending is forcing some companies to shut down altogether. The latest company to suffer that fate is venture capital-backed SpiralFrog, which quietly hit the deadpool yesterday after 5 years of existence.
A source told CNET the service went under at about 4 p.m. PDT, and has been down ever since. The publication has been unable to reach anyone at SpiralFrog for comment, as have we, but claims the source said the startup issued secured notes in order to borrow at least $9 million from hedge funds and others last year to stay in business. Alas, it seems like all efforts to keep the company afloat have been in vain, causing another ad-supported free music download service to cease operations (recently a similar music service geared towards college students, Ruckus, pulled the plug).
Having raised as much as $12 million in VC and debt funding, the company made a splash in August 2006 (after 2 years in operations) when Universal Music made their entire music catalog available for free download through SpiralFrog, joined by EMI a month after. About a year after, SpiralFrog started handing out private beta invitations (what took them so long?), but we were already critical of the ad-supported digital DRM-tied music download strategy then:
“I don’t know if SpiralFrog will be able to sustain their business off of on-site advertising and affiliate music sales.”
We covered the company again in January 2008 when SpiralFrog seemed to be doing fine, but the scene was changing and the company had to fend off a lot of competitors, including HypeMachine, RadioBlogClub, Deezer, InTune.fm, Mog, Last.fm, Imeem, etc. It didn’t catch on enough with music fans, sinking the startup in a sea of debt obligations, which it was unable to repay in time.
We’d like to relay the question CNET asks at the end of the source article: is the ad-supported music business facing a shake-out?
It’s really a long lasting fight, but I believe one day business like that will stand up for long. As I believe the business model of music sector will be changed in the future.
Sad to see for the staff, but not exactly leaving a chasm in the market and millions of disappointed users.
From the outset- when they decided on WMA files and users having to go back and ‘top up’ on ads to keep a songs DRM from kicking in again- they were doomed.
As the article states- ad supported streaming models, for which you have to pay the major labels vast chunks of upfront cash, simply don’t work for anyone.
The upfront cash still isn’t enough to keep the labels in business, and the ad revenue’s aren’t enough to keep the business in business…
I’d say Spotify the only one with a shot at surviving- its such a sorted user experience that if they threaten to take it away, enough of us will probably jump to premium subscription models.
So, who’s next- imeem or Last.fm?
Good.
When Universal signed over their entire catalogue I was working in the music industry for an independent record label. I blogged my little heart out against free music downloads.
I know times have changed and so has my attitude, but it still feels a little sweet to see it fail. It’s a loss for the employees, but a win for good music.
Spam
Who the hell was SpiralFrog? No wonder they went under.
My point too. And what were those VC’s thinking giving them money just lat year? Ridiculous.
I use http://Jiwa.fm all the time.
Any info about Jango?
That´s sad, the German Version is still running but other core business http://www.spirofrog.de
That stinks for Spiral Frog. They had a good product, I guess legal peer to peer music download service did not work our properly for them. The evil greedy music business wants there cut, as always. They feed from these new start-ups trying to make a technological change. Another competitor Qtrax, I remember flew LL COOL J and other artists for their launch. They also were hit with many lawsuits and were crushed for a little time. I read that itunes is going to change format and become an ad network to offer P2P ad music. Good Luck Joe Mohen.
no way people are going to make money off the music anymore. all these companies need to think about revenue streams other than selling (or in this case renting) the music.
Google’s Gmail is down again…Another outage!!!!
With Last.fm, Songza, Seeqpod, MixTurtle and the many other free and very good streaming services out there, owning music is a has been model (even p2p).
I would of course include pandora and slacker in that mix, but they’re only available in the US.
Artists are making money from live performances, which was the original business model way back.
However, live music discovery is still a challenge, and that’s what http://www.HearWhere.com aims to solve.
I’m sure it is unintentional, but might not be in the best taste to have a picture of Rihanna over “deadpool” on the TC home page given recent events.
Does anyone know what happens to all the songs that I’ve downloaded over many months from Spiralfrog? I’ve had to log on to SpiralFrog every month to keep the songs in my MP3…. does Spiral’s end mean all of these great songs I’ve downloaded over many hours are history?
If so, that’s it for MP3’s.
If you right click on your spiral frog mp3 files and click on properties, it will tell you when the license is up on them. Mine say April 26th, so I’m guessing after that, my songs will be gone. I liked Spiral Frog – they had a lot of artists that I liked (Weezer, Lady GaGa, Taylor Swift, etc) and the ads were not annoying at all. I’ve been on paid sites that didn’t work as smoothly and had more junk on the screen. Very sad to see it go
you can always find a drm decoder online there are a few free good ones out there and then it wont matter
Just when I started using Spiralfrog again it goes bust! Selection was poor but free was good.
Does anyone have any information of whether iMeem will be next?
DRM doomed it from the beginning. No surprise here.
Cost doom it from the beginning. It had as much of a chance to take-off a safe with an anchor attached to it.
> is the ad-supported music business facing a shake-out?
OMG! What serious journalism! Where’s all the breathless coverage saying how ad supported is the only way to go?! Run a business with these blogger advice is like investing by listening to Cramer.
A real pity.
That the entire Universal & EMI catalogs were available was a fantastic boon to collectors, and especially to young listeners just starting to explore music. For between them, they commanded a huge fraction of the classical recordings made virtually since the dawn of recording, not to mention their extensive catalogs of jazz, popular music and Broadway.
Hopefully, some venue will emerge making available at least the back-catalogs of recordings no longer extant. Really, what skin is it off the noses of the labels? They’ve got untold thousands of recordings – many historic and truly great – unavailable, and won’t reissue them because there is only a very small world-wide market. And we’re all seeing first hand just how well the “free market” of capitalism works.
Oh god another person thinking free means you don’t have to pay. Free market means that the market decides. You guys, the listener.
You ALL pretty much have decided that it’s ok to DL songs for free and not pay for them. Now you are pissing and moaning because the company who owns the recording won’t release them. What incentive do they have. They are in business to make money not give it to you for free.
The changes you are seeing the music world is just the start. I presume that all bands will move to the net as the only means of distribution of their music. I also am willing to bet that they give it away free and just go on tour to make money. That will SIGNIFICANTLY reduce the number of bands. Bands are also businesses, they require money (though less today than in the past) to record, to write music, and to basically not have to go to a day job to eat.
You complain that they don’t release older music. Then be willing to realize that getting it for free isn’t going to stimulate someone to spend money. Oh and by the way. There are serious costs involved in setting up a site, paying the hosting costs bandwidth etc… That’s not free.
So what you are asking is for a business who has investors, oh like someones parent or grandparents or you, to pay good money to make the recording, put the recording up on the site that costs them money to build, and then pay monthly just so you all can have the music for free?
Granted it doesn’t cost as much as it used to for these things, but they aren’t free.
That makes as much sense as you paying for your home leaving the front door open and then having everyone come over and pay you nothing while they camp out in your house. Using the electricity you pay for, your food etc… Why would you do that? Then why would a music company give it away for nothing?
YOU figure out how to incent them to release old music for free? You figure that out and you will make a pile of money. You will need it to pay for that 24 hour party at your house with everyone living there for free.
Wake up and Smell the Coffee.
PS I think the old style music companies are dead. Mainly because the failed at embracing the internet, but also because everyone out there decided that it was ok in their world view to steal from them. In the end it will be interesting to see if real music continues to be made after there is no one to bankroll the band while they create that music.
You reap what you sow in this case…
Does anyone know any other good sites similar to Spiralfrog and Ruckus? Websites that allow you to download that music and listen to it in a player like Spiralfrog and Ruckus?
free.napster.com
grooveshark.com (kinda sucks tho)
Nice post! Check out my site as well at http://macmaniapodcast.com.
can we go one TC article without so much spam? we dont care about your websites guys.
First Ruckus now this?
Awwh welll!
Back to Frostwire!
And now my soundTaxi program is worthless!
Not even Roger Bumford could save it
AJNorth: Good comment. I found the service to be really amazing, for FREE. The ads were not obtrusive and the requirements on the user minimal. If you had told me when I was a teenager that you could download just about every Bowie album for FREE, I would have built a damn time machine. It frustrates me when I read that people just were not interested in the service because they had to log in here and there. I am almost angry that more people did not use the service because it was so good, and legal…no not perfect, but….FREE! Anyway, sure liked having that Coltrane catalog to listen to…Miles Davis. Every Who album. Almost every Radiohead recording. Sonic Youth, tons of SST stuff. Even pop crap! The list goes on. Ella Fitzgerald. Django Reinhardt. Thin Lizzy. Lionel Hampton. Sigh. Frog, you will be missed.
I used to use Ruckus… then I switched to Spiral Frog and now once again I can’t get free music. I really want to do it the legal way but it looks more and more like my friends who do it illegally have the better idea.
Do you know of any other free music providers like Ruckus and Sprial Frog that I can use?
I KNO EVERYTHING THATS GOOD HAS TO COME 2 AN END ONE DAY. SO IM JUS HELPING OUT, WHOMEVER MAY NEED SOMEWHERE ELSE TO GET THERE MUSIC. I DO RECOMMEND “UMUSICDOWNLOADS.COM” AND “beemp3.com”. AFTER A COUPLE DOWNLOADS FROM THESE SITES IT GETS EASIER. I HOPE THIS HELPS!!! R.I.P. SPIRALFROG!!!!! FROM ANOTHER LOYAL USER. U WILL B MISSED!!!!
The reason I personally don’t like streaming sites is simple- they’re not portable. I don’t have a laptop, and I want to be able to listen to music anywhere- at the gym, on a road trip- and not be tied to a computer by an umbilical-cord-like pair of earphones.
I also don’t want to pay for my music. Call me cheap, but when you’re a teen, money is limited.
So it’s definitely a pity Spiralfrog’s dead. Does anyone know about any other free (legal) sites?
I’m NOT looking for music search engines (beemp3, umusicdownloads, etc) whose quality is usually less than fantastic, and who also tend to have viruses!
This sucks! I downloaded the majority of my mp3’s from SpiralFrog and I turned so many friends and family on to the site. It’s a real shame they couldn’t last.
Oh well….se la vie.
I loved Sprial Frog… all the newest music, right on my computer. It made me want to go out and buy CDs that I might want to listen to somewhere other than my computer.
why would you go out and buy cd’s then. the one thing that made spiral frog better then other free legal music services was there support of drm enabled mobile devices
this sucks it was a good site the music companys should be ashamed of themselves but thay are not thx god for p2p programs thay will never stop those lol .
Everyone wants something for free on the Internet. They expect companies to figure out how to make money off of advertising. The truth of the matter is though that Google Ads might help pay salaries, but it’s not enough to keep any business going. The free music model is pretty much dead. Murdoch was right, the days of free content on the web are quickly coming to an end.
And in a final grasp at making money they sold their mailing list to the spammers!
While technically not against their privacy policy (http://web.arch...es/privacy.aspx) SpiralFrog sold their entire email list to spammers. Starting on June 7th I have now received over 250 spam emails at the address I used to register for them. I know they sold it since I used a unique email address when registering.
I hate spam!