SOURCE CNET
SpiralFrog, the pioneering ad-supported music service, quietly closed down on Thursday.
A source close to the company told CNET News that SpiralFrog has ceased operations and assets have been surrendered to the company's senior secured note holders. SpiralFrog's site went down about 4 p.m. PDT.
New York-based SpiralFrog made a splash in August 2006 by attempting to offer music free of charge to the public while supporting the site through ad sales. A licensing deal with Universal Music Group, the largest of the top four music companies, immediately gave the service credibility.
Media outlets such as The New York Times, Reuters, and USA Today speculated about whether SpiralFrog's business model was the answer to the music industry's problems and questioned whether the site could one day challenge Apple's iTunes.
SpiralFrog is the second one-time high-flying ad-supported music service to shut down in recent months. Ruckus, which catered to college-age music fans, earlier this year closed down. Both companies attempted to offer an alternative to illegal file-sharing sites.
SpiralFrog's managers called it quits at a time when executives at some of the top labels are questioning whether ad-supported sites can generate profits from ad sales and whether providing free streaming of music boosts sales or cuts into them.
In SpiralFrog's situation, the company couldn't overcome "a macro-economic perfect storm."
More to come
SpiralFrog, the pioneering ad-supported music service, quietly closed down on Thursday.
A source close to the company told CNET News that SpiralFrog has ceased operations and assets have been surrendered to the company's senior secured note holders. SpiralFrog's site went down about 4 p.m. PDT.
New York-based SpiralFrog made a splash in August 2006 by attempting to offer music free of charge to the public while supporting the site through ad sales. A licensing deal with Universal Music Group, the largest of the top four music companies, immediately gave the service credibility.
Media outlets such as The New York Times, Reuters, and USA Today speculated about whether SpiralFrog's business model was the answer to the music industry's problems and questioned whether the site could one day challenge Apple's iTunes.
SpiralFrog is the second one-time high-flying ad-supported music service to shut down in recent months. Ruckus, which catered to college-age music fans, earlier this year closed down. Both companies attempted to offer an alternative to illegal file-sharing sites.
SpiralFrog's managers called it quits at a time when executives at some of the top labels are questioning whether ad-supported sites can generate profits from ad sales and whether providing free streaming of music boosts sales or cuts into them.
In SpiralFrog's situation, the company couldn't overcome "a macro-economic perfect storm."
More to come