Top iPad Music Apps (a/o February 8th):
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Spiralfrog is now sitting on a sinking lily pad, according to executives close to the company. The ad-supported music service, once the focal-point of a massive media frenzy, is reportedly running out of cash and options. "Barring a serious event, Spiralfrog will have to wind it down," one source relayed. That includes a "Hail Mary bomb" in the form of an acquisition or continued funding. Spiralfrog did not respond to a pair of inquiries this week.
The Spiralfrog model remains a largely-hypothetical bet. Instead of requiring direct payments, Spiralfrog offers music alongside advertisements, a feels-like-free approach that mimics other successful forms of media like television. But alongside ad views, users are also being asked to deal with DRM, specifically protected WMAs from Microsoft. The songs are part of the now-obsolete PlaysforSure compatibility ecosystem, a solution loathed by previous adopters like Napster and Urge.
In fairness, Spiralfrog has skirted death before. In early 2007, a cadre of top-level executives departed, including Robin Kent, and future prospects seemed dim. But the lights kept flickering, despite ongoing questions surrounding the viability of ad-based music.
This time around, the backdrop is completely different, on both consumer and business levels. On the business front, nearly-frozen liquidity flows greatly reduce the chances of a monetary lifeline, and a softening advertising climate is certain to tighten revenues.
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