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.

SpiralFrog – Big (But Not That Big) Developments

spiralfrog.jpgSpiralFrog, the free music service viewed (by some) as the last best hope for the struggling music business, yesterday announced a distribution deal with BMI. The song publisher will make their entire catalog available for ad-supported free download in WMA protected format. The catalog comprises nearly half of all recorded music, including the entire Beatles discography, a fact that induces much irrational exhuberence at Wired Magazine:

The irony of The Beatles refusing all online music stores but accepting (or being forced to accept) this free, ad-based service is a little much. I have a call and email in to SpiralFrog to confirm that The Beatles are included in this deal. I have to assume they are, but I just can’t believe it, so I need to make sure. More on this soon.

Not so fast. No word yet on whether Neil Aspinall got back to Wired, but rest assured that the Fab Four’s Luddite stance won’t be changed by this deal. There’s rumors afoot that the recent “Love” songscape could be made available to Apple (the computer company) iTunes, and reports of Steve Jobs using his reservoirs of charm on all interested parties to bring that to bear.

I don’t think Beatles product is going to be digitized until Apple (the music company) is damn good and ready. It will happen when the audio quality is there and not a day sooner – at least that’s what Aspinall said in court earlier this year.

SpiralFrog Developments

spiralfrog.jpgYesterday, the anticipated agreeement between EMI and SpiralFrog was announced. Coming on the heels of UMG’s acquisition of BMG, this gives the not-quite-free download service more critical mass. Tucked into the announcement was a nugget that I consider more important to the evolution of digital music, free or otherwise:

In addition, SpiralFrog has also obtained a worldwide license to enable users of the service to search for and display the lyrics of EMI Music Publishing’s English language repertoire.

When records were king, album covers provided the visceral kick missing from simply listening to the songs. The CD diminished this experience signficantly (particular as baby boomers’ vision waned and microscopic liner notes got harder to read); the download age eliminated it completely.

That’s sad, because the digital music experience has the potential to provide all kinds of rich content, with the cooperation of copyright holders of course. That’s why this announcement is big. Here’s a challenge to EMI (and UMG): why not include the lyrics in the ID3 placeholder, where they rightfully belong? In the media player, offer an option to stream them, news-crawl style, on the screen?

Really, that’s only the beginning. Musical credits open up a whole other realm of possibilities. And don’t get me started about what could happen when WiFi MP3 players become the norm. Ticket pre-sales, track previews, street team swag – the sky’s the limit, guys.

Wake up from your petulant, lawyer-enabled fog and create the future.

SpiralFrog – Control, Not Ownership

spiralfrog.jpgThough I don’t completely share his view of who stands to benefit, I enjoyed Perpetual Motion’s thoughtful take on the SpiralFrog debate. He says the issue isn’t one of rent versus own:

I believe that consumers want to “control” their music, while “ownership” of the music is not that significant. This may seem like a subtle distinction, but I see it as critically important to charting future business models in the digital music arena. As music consumers, we want to listen to the right music, on the right device, at the right time. In a market increasingly dominated by consumers seeking instant gratification and endless diversity of choice, I believe that models favoring selection over ownership will gain traction. In many areas, I believe that consumers are becoming less attached to owning physical content, yet even more attached to owning their preferences.

In this context, he continues, the hurdles presented by SpiralFrog’s not-quite-free model will ultimately doom it. He goes on to say that this problem will benefit Pandora, but I disagree with him on that point. Though Pandora’s “Oracle of Music” concept is appealing, its’ endless free stream is still tethered to the desktop. My qualified endorsement of SpiralFrog is mostly centered on the fact that their free content can be played on a portable device.

Pandora is intriguing, but still requires spending a buck before a track can be moved to an iPod. Most of the songs on the average iPod weren’t bought at digital music stores, and probably never will be.

I think PM and I mostly agree on the value of subscription services like Rhapsody (To Go) and AOL Music Now Premium. While fans love music, they tend to move quickly from one fad to the next, particularly with hip hop, the most popular (and pirated) genre. With a good subscription service, we can fill our players with whatever we want and never pay more that the monthly fee.

Ultimately, SpiralFrog’s success will come down to whether or not it’s worth 15 bucks a month to bypass the adverts and have greater control over the listening experience.

SpiralFrog Gets Gigged

The SpiralFrog announcement is but two days old, and the for/against camp is shaking out. UMG’s new free download partnership doesn’t have a whole lot of fans, and that’s fine. What bothers me is the insistence that record companies not only give away their wares, but do it without any restrictions.

It’s sort of like, thanks for the free meal, but it’s a little, y’know, under-seasoned.

We’ll take your free music, the critics are saying, but only with no DRM and unrestricted playtime on an unlimited number of devices. While you’re at it, get those nasty adverts away from me as well.

It’s not much different from the long-standing industry position in terms of extremity.

Every time I want to read Salon magazine, I have to sit through an ad first, or pay for an annual subscription. Without a paid subscription, I can’t move it via AvantGo down to my Treo. The New York Times wants 50 bucks a year if I’m to read Maureen Dowd.

I love Comedy Central’s full-disclosure, tongue-in-cheek ad box that everyone looking for Daily Show or South Park reruns has to sit though. “Payin’ the Billz” is what it says.

So why should free music content be different?

Fortunately, there are a few moderate, albeit skeptical, viewpoints about SpiralFrog. The most provocative observation comes from an editorial in the Financial Times online edition. A free, ad-supported service can move people away from illegal download sites and bump revenue up for the industry, but it has some pretty scary dangers:

A service like SpiralFrog has to be sufficiently attractive to win back illegal music users, while not proving so compelling that legal customers decide they no longer need to pay.

Exactly. I’m generally enthusiastic about SpiralFrog, but I wonder how long the model will sustain itself. I remember the original incarnation of EMusic, which allowed “all you can eat” downloading for a monthly fee. I enjoyed it immensely, downloading unrestricted copies of the Creedence Clearwater Revival catalog, among others (it was mostly oldies then). The scheme lasted about one year before they started limiting tracks. Now, they’ve found a nice balance, selling 90 tracks for 20 bucks from a re-vamped lineup packed with indie bands like the Demonz, Neko Case and eels.

Another thing SpiralFrog doesn’t address is the plight of smaller bands from indie labels who likely won’t appear there, free or otherwise. For them, the future lies beyond the majors. I got an interesting email from Craig Hamilton of the folk-rock U.K. band Friends of the Stars, who proposed a scheme that’s as fraught with peril in its own way as SpiralFrog:

If you give us $10, we’ll send you 5 tracks from our forthcoming album. You can then distribute these 5 tracks to your small but dedicated group of customers free of charge, free of DRM and with our absolute permission.

You can send these songs as a goodwill gesture to existing clients, or use them as part of an offer for a new product. It’s your $10, so it’s your call.

Please feel free to tell your small but dedicated group of customers they can do with the music what they wish. They can share it, they can burn it to CD, and they can even ignore and delete it should they wish.

It sounds like a wonderfully egalitarian approach, but it is a lot like buying and ripping a CD, then emailing the tracks to all your friends. What’s different is that FotS is relatively unknown and looking for exposure. Once successful, what will happen to their policy? I don’t mean to criticize, just wondering.

Tamago is a more realistic marketplace model. It allows content owners to license their works to individuals, who then price and sell it over the Internet for whatever price is appropriate. The one problem I’ve always had with iTunes and their ilk is uniform pricing, though some smaller bands offer full albums for a low price (like Damone, a GREAT band from Boston, who sold their debut for 6 bucks on ITMS). Tamago isn’t limited to audio and video, either, with photos and written work available though the exchange.

In the case of Friends of the Stars, I’d suggest that rather than selling a blanket license for 10 dollars that allows for unlimited free distribution, they either limit it or build in a royalty system. The payout might even mirror the very successful “street team” approach used by a lot of bands, which rewards amateur, unpaid guerilla marketers with choice concert seats and other assorted swag.

The under-discussed message in all of this SpiralFrog hoopla is that it spells the gradual irrelevancy of record companies in the first place. The Internet has made a world where they aren’t really necessary, at least not until they start actually developing bands again, which probably won’t happen.

If the industry can’t make money from free music, what’s left?

Local Rhythms – SpiralFrog is a Leap Forward

free-music.jpgAppears in the August 31, 2006 Claremont Eagle Times:

Partially adapted from an earlier post
Watching the record industry come to grips with the new realities of the music business is a bit like watching Sam I Am’s evil twin at work. You remember the Dr. Seuss character? Sam tried to force an unwanted breakfast on a poor guy who was probably studying for his cholesterol test.

“Would you eat them with a fox, would you eat them in a box?” Well, now it’s music instead of green eggs and ham. “Would you buy it in a stream, a cell phone beam with an encryption scheme?”

But the cute little music business muffin-head has now turned mean and ugly: “How about if I sue your spouse, lien your house and smash your mouse?”

I do not like this, Sam I Am….

SpiralFrog, announced Tuesday by Universal Music Group, is the industry’s first credible attempt to confront the new economic order. In an unprecedented move, the service plans to make UMG’s entire catalog available for free online – with restrictions.

Tracks can’t be burned to a CD, but can be copied to a Microsoft-sanctioned portable music player, which also has to be re-docked to the computer periodically. Plus, you’ll have to look at ads before you download. It’s Windows-only, which makes perfect sense. They’re trying to slow down the Apple digital music juggernaut, which means no iPods, no iBooks, no iNothing.

Some, most notably Bob Lefsetz, consider SpiralFrog another big dud by the usual suspects. Much as I love Lefsetz, I think he misses an important point. Magazines, papers, and now television have all latched onto web-based advertising as to pay for making free content available online. Now, here comes the music business – can Hollywood be far behind?

For Lefsetz, it’s the restrictions that kill the deal. People want to own music, the argument goes, and this scheme makes them rent it. Well, something that’s free can’t be rented. In this case, it also can’t be owned. But it also won’t get you arrested.

Besides, stealing music online is a huge pain. For every quick track pulled from LimeWire, there are five more stuck waiting for available hosts, or completely dead on the vine. Spiral Frog, at the very least, will behave more like iTunes and less like Kazaa.

Claremont’s last record store closed months ago, but there’s more music to be had, and at better prices, than ever before. That’s a reason why a column called “Local Rhythms” is so often about the world beyond the Twin State Valley. Here are my local music picks:

Thursday: Matt McCabe, Canoe Club – A quiet storm in downtown Hanover. McCabe’s piano playing has been known to liven up records, as a sideman to Roomful of Blues and Duke Robillard. At Canoe, he settles into a jazzy space, with sophisticated music that inspires dinner conversation, not booty-shaking.

Friday: Pete Merrigan, Sophie & Zeke’s – Sadly, the season’s nearing a close for my favorite ex-pat, with just a few appearances before an Irish vacation and a return to his Florida home. Fortunately, two of them are in downtown Claremont, consecutive Fridays at a venue that’s building a following for music as well as food.

Saturday: Stonewall, Royal Flush Diner – Vermont’s grittiest power trio takes over Springfield’s new hot spot tonight. Stonewall’s been laying down tracks for an album of late, at former Ingrid’s Ruse drummer Shamus Martin’s Exsubel Records studio. Check out their MySpace site for a taste of things to come, or see them live. They always bring out my inner headbanger.

Sunday: Josh Maiocco, Front Porch Series – Speaking of the now-defunct Ruse, their excellent lead guitarist showcases his solo work at this, the final installment of the Bellows Falls Front Porch Series. It’s a movable “Picnic Potluck” feast held today at the Village Guest Suite, 6 Hapgood Street. Josh has a nice bluesy singing voice, and great taste in covers to go with his own stuff.

Monday: Bread & Roses Folk Music Festival – In 1912, Lawrence, Massachusetts became an international focus for the debate on child labor, workplace safety and subsistence wages. On Labor Day, that legacy is celebrated in music. It’s as much about learning as listening, with Phoebe Legere and Anne Feeney carrying on the Woody Guthrie tradition, and Corey “The Singing Lecturer” Dolgon (a full-time Worcester State College professor) playing historical songs. The roots rocking Mammals headline.

Tuesday: Irish Sessions, Salt Hill – Blue Monday is dark this week, as the Tuohy brothers get into the Labor Day spirit. But Tuesdays will once again burst forth with sounds of the old country, with Dave Loney and whatever friends happen to drop by. They always play in a circle at the center of the room, like a heartbeat. It’s lovely, and even better with a pint.

Why SpiralFrog’s Free Music Plan Will Work

spiralfrog.jpgWatching the record industry trying to come to grips with the new realities of the music business is a bit like watching Sam I Am’s evil twin at work. You remember the Dr. Seuss character, haranguing that poor guy, who’ s probably studying for his chloresterol test.

Trying to force an unwanted breakfast on him – “would you eat them with a fox, would you eat them in a box?”

Well, now it’s music instead of green eggs and ham.

“Would you buy it in a stream, a cell phone beam with an encryption scheme?”

But RIAA’s cute little muffin-head has now turned mean and ugly: “How about if I sue your spouse, lien your house and smash your mouse?”

I do not like this, Sam I Am….

SpiralFrog, announced by Universal Music Group on Tuesday, is the industry’s first credible attempt to confront the new economic order. In an unprecedented move, the service plans to make UMG’s entire catalog available for free download – with restrictions. They’re working to bring other companies on board.

With SpiralFrog, tracks can’t be burned to a CD, but can be copied to a Microsoft-sanctioned portable music player, which also has to be re-docked to the computer periodically.

It’s obviously Windows-only, which makes perfect sense. They’re trying to slow down the Apple digital music juggernaut, which means no iPods, no iBooks, no iNothing.

Some, most notably Bob Lefsetz, consider SpiralFrog another big swing and a miss by the usual suspects:

These are the same guys who came up with Farm Club and PressPlay. Literally the same guys, Doug Morris and Jimmy Iovine. Doug’s a sexagenarian song guy. Jimmy? He’s an opportunist. Believing these guys have the digital answer is akin to believing the guys who did the Mentos movie are going to eclipse Paramount.

Much as I love the guy, I think Lefsetz is missing an important point. Magazines, papers, and now television have all latched onto web-based advertising as the key to making content available for free online. Now, here comes the music business – can Hollywood be far behind?

For Lefsetz, it’s the restrictions that kill the deal. People want to own music, the argument goes, and this scheme makes them rent it. Well, something that’s free can’t be rented. In this case, it also can’t be owned.

Every time I hear him make this argument I wonder – how many promo CDs are in his collection? How many concert tickets has he actually PAID for in the past 30 years? What’s the ratio of free (as in you didn’t buy it, the record company gave it to you) music to the stuff he truly owns?

One more thing, Bob. LPs don’t count.

Regular people buy one or two albums a month, and a year later they’re tired of them. Online mavens steal a lot more music than that, but I’d be surprised if their listening habits are much different. They just don’t have anything to sell back to the used record store.

Here’s another news flash – downloading music is a huge pain. For every quick track pulled from LimeWire, there are five more stuck waiting for available hosts, or completely dead on the vine. Spiral Frog, at the very least, will behave more like iTunes and less like Kazaa, which is a very good thing.

I think this is a revolutionary move.

Like the New York Times, I’m sure Spiral Frog will eventually offer a paid premium content component, sooner rather than later. But with the tectonic shift in advertising, something impacted by Tivo on the one hand and the Long Tail of business on the other, the time is ripe for a model that doesn’t force cosumers to buy music when they’re convinced it’s their right to have it for free.

Let ’em have it – right after this word from E-Trade.