Spiral Frog Woes Reflect Industry Shift

spiralfrog.jpgVia FMQB comes word that ad-supported music startup Spiral Frog has in the past month lost its CEO, three board members, and six of senior executives. All before posting a single song for download:

SpiralFrog was announced last year with an ad-supported model that would allow music to be downloaded for free by users. However, among the major labels, only Universal Music has signed on with the company thus far. SpiralFrog was expected to launch before the end of 2006, but no launch date has been officially announced yet.I won

Discussions at this year’s MEDEM conference in Cannes seem to indicate that for whatever value the ad-supported service may have, its complex DRM is out of sync with a growing mood in the industry, as reported by the International Herald Tribune:

Now that even digital music revenue growth is faltering amid rampant file-sharing by consumers, the major record labels are closer than ever to releasing music on the Internet with no copying restrictions — a step they once vowed never to take.

Executives of several technology companies meeting here at Midem, the annual global trade fair for the music industry, said this weekend that a move toward the sale of unrestricted digital files in the MP3 format from at least one of the four major record companies could come within months.

Indie labels have been doing this for some time on sites like eMusic. The straw that broke the camel’s back could be Microsoft’s decision to abandon its Plays for Sure partners with the Zune. It also could throw a spanner into iTunes’ works.