I can’t say I’m surprised but it’s sad nonetheless. Ad-supported music download service SpiralFrog appears to be no more.
Unable to raise a further round of funding and crippled by debt, the service couldn’t overcome “a macro-economic perfect storm”, a source close to the company tells CNet.
Basically, any startup whose revenue is purely tied to advertising is facing tough times – last100 included – as the downturn means that brands are cutting their marketing budgets or at least being far less experimental in how they spend their money. That’s bound to make new business models like SpiralFrog’s particularly vulnerable.
However, there’s undoubtedly another side to the story. SpiralFrog’s offering just wasn’t compelling enough. Two deal breakers existed: support from only two of the four major record labels and a clunky DRM reliant system for downloading and playing back tracks from the service.
As we wrote back in November 2007 when SpiralFrog first looked to be in trouble:
Getting music for “free” sounds great until you factor in the inconvenience of having to log in regularly to sit through more ads and surveys in order to stop the music you’ve already downloaded from expiring so that it will continue to play. Couple this with the fact that the music only works on a Windows PC through Windows Media Player — no transferring to portable devices, let alone an iPod — and it’s clear that SpiralFrog is no competitor to piracy or other more traditional download services such as iTunes.
The company stated at the time that an agressive marketing plan, which even involved the possibility of paying bloggers, would help to overcome SpiralFrog’s lack of take up. Unfortunately, it rarely, if ever, works out that way.