- 25 Jan 08, 16:01 GMT
SpiralFrog – just the kind of daft name you expect from a digital start-up – and eye-catching enough to be spread across the world’s media back in April 2006. It was a service offering free downloads supported by advertising. And it wasn’t just the name that caused all the excitement but the promise of a new business model for an industry desperate to find a way to make money in the digital age.
Then everything went quiet - but today SpiralFrog is making a noise again. It has unveiled the first figures for its service – launched to North American customers last September. There are no figures yet on advertising revenue or downloads – but they’re jumping up and down with excitement over their 400,000 registered users. To my untutored eye that seems pretty unimpressive for a service offering completely free, no strings (apart from the ads) all-you-can-eat music. Someone from a ratings firm confirmed that view: “They barely show up on the radar,” he told me.
But the founder of the firm Joe Mohen was in very confident mood when he came on the phone, forecasting that SpiralFrog will be second only to iTunes in the United States by the end of the year. The company says that it is visitor numbers that really matter (they are getting a million or so a month) because even if they don’t download a thing, they get to see the adverts and earn SpiralFrog some cash every time they click on them.
But that won’t cheer anyone up in the music business. The record labels and the artists get paid (and presumably it’s a tiny amount) when someone plays a track – SpiralFrog can detect how many times you’ve done that on your MP3 player (iPods not supported, by the way). I would be surprised if the money flowing back to the industry was even a fraction of that generated by iTunes – and the record labels aren’t that happy about Apple’s terms – so right now SpiralFrog doesn’t look like the answer to the industry’s prayers.
And new figures from the global music trade body, the IFPI, show just how much it needs a saviour. In its digital music report it trumpets a 40% growth in digital music sales to $2.8 billion in 2007 – but that’s a real slowdown after previous years saw sales double. What’s more, the IFPI reckons the overall music market fell another 10% last year. So the $800 million extra digital sales are on one side of the scale – with a $2.9 billion fall in shop sales on the other.
What the IFPI also ruefully points out is that there are twenty illegal downloads for every one that’s paid for. This is where SpiralFrog claims it can make a difference. Joe Mohen says he isn’t taking on Apple: “Our competition is piracy.” He describes the “can’t pay, won’t pay generation” of 15 to 25-year-olds. “For them, content has always been free.” He believes they will be willing to trade some of their time looking at adverts if they can get free music in return.
So now there are so many ways of getting hold of digital music. You can pay per track to download, you can pay a subscription, you can sign up to one of the mobile music services, you can stream it for free (Last.fm launched its free service this week) or you can download it for nothing. Or of course you can grab it for nothing using file-sharing sites. Right now, it’s only the last option which is capturing the imagination of music fans.
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