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Rory Cellan-Jones

Digital music - you can't give it away...

  • Rory Cellan-Jones
  • 25 Jan 08, 16:01 GMT

鈥 just the kind of daft name you expect from a digital start-up 鈥 and eye-catching enough to be spread across the world鈥檚 media back in April 2006. It was a service offering free downloads supported by advertising. And it wasn鈥檛 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 鈥 launched to North American customers last September. There are no figures yet on advertising revenue or downloads 鈥 but they鈥檙e 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: 鈥淭hey barely show up on the radar,鈥 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鈥檛 download a thing, they get to see the adverts and earn SpiralFrog some cash every time they click on them.

But that won鈥檛 cheer anyone up in the music business. The record labels and the artists get paid (and presumably it鈥檚 a tiny amount) when someone plays a track 鈥 SpiralFrog can detect how many times you鈥檝e 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 鈥 and the record labels aren鈥檛 that happy about Apple鈥檚 terms 鈥 so right now SpiralFrog doesn鈥檛 look like the answer to the industry鈥檚 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 鈥 but that鈥檚 a real slowdown after previous years saw sales double. What鈥檚 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 鈥 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鈥檚 paid for. This is where SpiralFrog claims it can make a difference. Joe Mohen says he isn鈥檛 taking on Apple: 鈥淥ur competition is piracy.鈥 He describes the 鈥渃an鈥檛 pay, won鈥檛 pay generation鈥 of 15 to 25-year-olds. 鈥淔or them, content has always been free.鈥 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鈥檚 only the last option which is capturing the imagination of music fans.

Comments

This is something I have been watching quite closely and when I first heard the story, got very excited about.

Being in the UK, I can't access the website, but it has really made very little impact on the various technology sites I use and blogs I read.

I am quite happy with how I do things now. I have an iPod, I have iTunes on my Mac, I open iTunes and pay 79p for every song I want, and I listen to the Radio while I am doing work, It's only really while I am travelling that I use my iPod.

I like nothing online less than excessive, obtrusive advertising, I really can't stand it! For the amount of music I actually decide to buy, I am prepared to have the iTunes Plus high quality guaranteed, the portability of being able to instantly stick it on my iPod, the instant, reliable download and nothing getting in my way offering me things I don't want, for 79p, sooner than fight my way through pages of banners, pop-ups, "free screensavers" and goodness knows what else, to download a single song, probably in a lower quality than I could get elsewhere (although that point is unverified) and not be able to put it on my iPod easily!

I am not one of these people who is rolling in cash, and I certainly fit the profile of the "can't pay, won't pay generation of 15-25 year olds" mentioned, but I try to be sensible, and only but a small number of songs, particularly given I sit here with the radio on.

Well, it doesn't look like a very enticing site. You can't find out anything about how it works without registering, and you can't click the play buttons on the site without WMP11 (I'm sticking to 10 thanks - it's better!). And one other thing, from your review it sounds like the music is DRMed to the hilt - no thank you!

Well, it doesn't look like a very enticing site. You can't find out anything about how it works without registering, and you can't click the play buttons on the site without WMP11 (I'm sticking to 10 thanks - it's better!). And one other thing, from your review it sounds like the music is DRMed to the hilt - no thank you!

  • 4.
  • At 03:52 PM on 26 Jan 2008,
  • Tim Vanhoof wrote:

Let's see now. If your target market is people who don't want to pay for music, what do they gain from using this service rather than a P2P network? Nothing. Moreover, why would anyone want to pay to advertise goods and services to people who are too cheap to pay for music? Is this likely to represent a group who like spending their money?

Hi Rory,
I'm CEO of We7 www.we7.com the UK Music Download service which is ad funded which launched last year and is supportd by Peter Gabriel.

Digital music delivery whether paid or ad funded has far more potential going forward but the traditional music industry has to remove the shackles for this to happen. For example Spiralfrog's music cannot play on a ipod, Last.fm's new streaming facility will only allow 3 plays, Pandora cannot broadcast in the UK because of the fixed rates imposed by the MCPS which has no reference to emerging economics for digital plays. These are all due to restrictions the music industry is imposing which make very little rational sense to the consumer.

Despite all these restrictions, new models keep trying to break through and now there are some good people in the majors who are starting to understand that digital music delivery (like all successful internet models) is about scale. Its no longer about a single delivery model but about a matrix of services which meet the consumers needs in different ways. All the potential models have to be nutured and given the chance to flourish, many will die but the ones that do scale will make up for the shortfall in traditional sales and then some.

We7 from humble beginings of 30 tracks only a few months ago now has access to 500k tracks of good music from great independents with 1m tracks downloaded already and very rapid growth and some exciting announcements in the coming weeks.

Cheer
Steve Purdham
CEO We7
www.we7.com

@Tim - absolutely right; the constituency of such a site is logically not likely to be of much material value to advertisers - it is a marketing model that doesn't seem to make a lot of sense.

One advantage you probably get though, is one of speed - most P2P systems I have come across require rather slow torrent downloads (and simultaneous uploads) - but then, I don't pretend to be an expert on such nefarious stuff!

  • 7.
  • At 09:55 PM on 27 Jan 2008,
  • Matt Taylor wrote:

For me, the biggest surprise is that this company is still going. When it was launched I just could not see the logic of their business model and the numbers show that its really not a workable solution.

The iTunes model doe not work for me either.

I will not buy DRM music on line at all. This is something I will not compromise on ever. I want to be able to play my music on whatever device I want without any restrictions and currently the DRM model causes restrictions.

Its a big shame the Amazon music store is USA only as its the only online store that offers what I want. DRM free high quality downloads. Until Amazon see the light and launch in the UK I will continue to buy CDs and rip them myself.

  • 8.
  • At 08:30 AM on 28 Jan 2008,
  • Rich Buck wrote:

Been using Last.FM for the last few years and enjoyed it until CBS bought it! Now I find that a lot of the more obscure stuff is bloated with more commercial stuff(can not figure out how Beastie Boys and rap are in my Samba).
Heard about SpiralFrog and tried it>and tried it>and tried it> and after about an hour I still had only been able to download one song. My time is worth so much more than what they think is a reasonable time to navigate, I'll just be listening to either the radio or discs. I do'nt mind the advertising but if you waste my time I will go elsewhere and your business model will spiral down the drain!

  • 9.
  • At 09:35 AM on 28 Jan 2008,
  • wolfie wrote:

mp3s are worthless for the music industry and they should focus on using a better platform "something that can be held in your hand again" if i buy a tune in mp3 format i cant sell it again to a friend etc because it has no resale value its worthless, so why would i want to waste my money on mp3s which are basicly like blank cassette tapes that cost nothing, so far i still perfer cds and vinyl however i do see a benifit for mp3 or wavs being locked on read only memory cards like the nintendo ds uses as a future but maybe to expensive to produce for now

  • 10.
  • At 12:11 PM on 28 Jan 2008,
  • toby stewart wrote:

They try and they try, but the owners of corporations have not yet worked out how to make sharing by poor people illegal. Or rather, they know how to make it illegal (control the "democratic process"), but they can't make their law stick.

So sad. My heart bleeds for people who think they can own a sound.

  • 11.
  • At 04:49 PM on 28 Jan 2008,
  • wrote:

The problem facing SpiralFrog is that its downloads are protected wma and will only play on a limited number of mp3 players (an ironic name for the device). I can listen to something if I'm at my PC, but the majority of my devices aren't on the approved list and can't play the downloads. And it's not worth buring to disk and seeing if the car can play them.

  • 12.
  • At 07:59 AM on 30 Jan 2008,
  • wrote:

My mp3 player (actually, a Nokia N91 - best music phone ever!) can play copy protected wma files, but to do so I have to sync files onto the device with windows media player, because then it copies the licences too. I much prefer to drag and drop files in mass storage mode, which works great without DRM (and thus on the majority of my self ripped from my own CD collection mp3s), but not with DRM.

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